Agriculture ministry surrendered Rs 44,000 crore in 3 years

The Agriculture Ministry has surrendered a massive amount of its budget in the last three years, totaling Rs 44,015.81 crore. The information was revealed in a Parliamentary Standing Committee report titled “Demand for Grants (2023-24) of the Department of Agriculture and Farmers’ Welfare”, released recently.

The Standing Committee on Agriculture, Animal Husbandry and Food Processing, headed by P C Gaddigoudar stated that the Department of Agriculture and Farmers’ Welfare was responsible for the surrendering of funds due to an incomplete utilization of its budget in some schemes, and requested the government to "avoid"  the "practice" of surrendering funds, in its Demand for Grants (2023) report.

The Agriculture Ministry surrendered Rs 23,824.54 crore, Rs 429.22 crore, and Rs 19,762.05 crore during 2020-’21, 2021-’22, and 2022-’23 (tentative), respectively, the report stated. “The Committee feels that the practice of surrender of funds must be avoided by all means henceforth so that the tangible benefits accrued from the schemes are allowed to percolate to the ground level in an optimum manner,” it stated.

Challenges for farmers

The farm production sector contributes only 13% of the country's GDP, and a good proportion of farmers want to leave agriculture today.

Agriculture in India provides a livelihood to more than 70% of the country’s population and remains the backbone of its economy, but the farmers still struggle with low income and poor welfare. Despite engaging more than 44 per cent of the workforce, the farm production sector contributes only 13 per cent of GDP. The farmers still languish for want of genuine welfare, with a measly average income of Rs 10,218/month, as estimated by NSSO (2019), for rural households.

The Agricultural Census 2015-16 classifies about 86 per cent farmers as small and marginal having less than one hectare of land and relatively low income than their consumption expenditure. A good proportion of farmers want to leave agriculture today, with the share of agricultural households in rural India falling from 57.8% in 2013 to 54% in 2019 as per NSSO. Climate change, erratic weather, unseasonal rainfall, pests, etc., worry the farmer less than the unjust prices at the market.

Climate change, erratic weather, unseasonal rainfall, pests, and unjust market prices are major challenges faced by farmers.

The budgetary allocation for the Department of Agriculture and Farmers’ Welfare has decreased from 4.41% of the Union Budget in 2020-’21 to 2.57% in 2023-’24. 

Also, public spending in the agricultural sector has fallen sharply to 4% in 2022–23 (Economic Review, 2023–24). The share of the agricultural sector has decreased by 4.8% compared to last year. Among all programmes, MGNERGS experienced its most significant decrease of Rs 13,000 crore (17.8% decrease in 2023-2024 from the previous year), followed by the PM-Kisan grant, which declined by Rs 8000 crore (17.8%), and the Rashtriya Krishi Vikas Yojana allocation, which decreased by Rs 3,283 crore (31%).

Need for customised schemes

According to the ministry, the funds were surrendered due to fewer requirements in schemes for benefiting those in the northeastern states, Schedule Caste Sub-Plan, and Tribal Area Sub-Plan. 

The report highlights the need for better budgetary allocation and the importance of targeted and customized schemes that cater to the specific needs of different regions and communities in the country. The government needs to increase its investment in research and development, infrastructure, and human capital to address the challenges and seize opportunities in the agricultural sector.

To aid farmers in solving the marketing challenges, interventions such as MSP and government procurement, Agricultural Produce & Livestock Market Committees (APMC), Price Deficiency Payments, National Agriculture Market (eNAM), alternative marketing channels, etc., are in place. Despite all these measures, the benefits of these interventions are yet to reach every farmer. The report highlights the need for better budgetary allocation and the importance of targeted and customized schemes that cater to the specific needs of different regions and communities in the country.

The government needs to increase its investment in research and development, infrastructure, and human capital to address the challenges and seize opportunities in the agricultural sector.

The committee recommended the department to identify the reasons leading to the surrender of funds and take corrective measures to ensure that the funds are utilised fully and efficiently.

Tech & innovation

The report also recommended the department to take up the issue of budgetary allocation in percentage terms out of the Central Pool with the Ministry of Finance and ensure that the trend is reversed from the next Budget onwards. 

Meanwhile, Union minister for Agriculture and Farmers Welfare Narendra Singh Tomar recently said that if small farmers are empowered, it will boost India’s GDP. He said that small farmers constitute 85% of the farming community and they face the challenge of a lack of private investment. The central government has undertaken an ambitious programme of forming 10,000 Farmers Producers Organizations (FPOs) with an outlay of ₹6,865 crore to boost the economic capacity of small farmers.

Technology and innovative finance tools can also go a long way in addressing challenges plaguing Indian agriculture. Recently, during the G20 meet, delegates discussed various areas of strengthening the value chain in agriculture. G20 members discussed improving the ‘farm to folk’ value chain in agriculture, agriculture secretary Manoj Ahuja told media. India also shared about the Agristack project that will help issue farm advisories specific to the region and help adoption of precision farming. For creating Agristack, the agriculture ministry is in the process of finalising ‘India Digital Ecosystem of Agriculture (IDEA) which will lay down a framework for Agristack.