Discussing Budget 2016-17 | Agriculture and Farmer’s Welfare

Amidst global and domestic headwinds, Finance Minister presented a growth and development-oriented Budget that seeks to transform india for the benefit of farmers and the vulnerable. We will take a look at the budget in terms of various sectors.

In this section, we will deal with the sector which received a lot of attention in this budget – Agriculture and Farmer’s Welfare

Take a look at basic statistics, which will not be useful for memorizing, but certainly will help you in analyzing the shifting focus of govt. towards agriculture.

  • Total allocation for Agriculture and Farmers’ welfare is 35,984 crore
  • 28.5 lakh heactares of land will be brought under irrigation
  • 5 lakh acres to be brought under organic farming over a 3-year period
  • Rs 6,000 crore for recharging of ground water recharging
  • Dedicated irrigation fund in NABARD of Rs.20.000 crore



Focus Areas

#1. Food Security to Income Security

Govt. is targeting to double the farmers’ income in 5 years. Govt. will re-orient its efforts both in farm and non-farm sectors. The access to markets becomes critical in this respect, so govt. will implement a Unified Agriculture Marketing Scheme which envisages a common e-market platform that will be deployed in selected 585 regulated wholesale markets.

#2. Irrigation

Irrigation is a critical input for increasing agriculture production and productivity. Out of 141 million hectares of net cultivated area in the country, only 46% is covered with irrigation. A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about `20,000 crore.

The ‘Pradhan Mantri Krishi Sinchai Yojana has been strengthened and will be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation under this scheme. Govt. is taking efforts to fast track 89 irrigation projects languishing under AIBP, which will help to irrigate 80.6 lakh hectares.

Under the sustainable management of ground water resources, at least 5 lakh farm ponds and dug wells in rain fed areas will be created and 10 lakh compost pits for production of organic manure will be taken up by making productive use of the allocations under MGNREGA.

#3. Conserve Soil Health and Fertility

There is a National Project on Soil Health and Fertility and govt. is implementing Soil Health Card Scheme. It enables farmers to get information about nutrient level of the soil and can make judicious use of fertilizers. The target is to cover all 14 crore farm holdings by March 2017.

#4. Credit Availability

Govt. is making special efforts to ensure adequate and timely flow of credit to farm sector. The target for agricultural credit in 2016-17 will be at an all-time high of Rs. 9 lakh crore, as against the target of Rs. 8.5 lakh crore in 2015-16.

Govt. has made the provision of Rs. 15,000 crore towards interest subvention, in order to reduce the burden of loan repayment on farmers

#5. Food Processing Industry

100% FDI will be allowed through FIPB route in marketing of food products produced and manufactured in India. It will benefit farmers as fruits and vegetables will fetch right prices and also reduce their wastage. It will also give impetus to food processing industry and create vast employment opportunities.

New Initiatives


A  Krishi Kalyan Cess will be imposed at 0.5% on all taxable services, proceeds of which would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. To know more about basics of cess – Read more.

Broadening MSP

Govt. will make efforts to ensure that the benefit of MSP reaches farmers in all parts of the country. Govt. will encourage remaining states to take up decentralized procurement. An online procurement system will be undertaken through the Food Corporation of India. Govt has also made effective arrangements  for pulses procurement.

Dairy Development

Govt. will bring four new projects to make dairying more remunerative to the farmers:

  • Pashudhan Sanjivani – An animal wellness programme and provision of Animal Health Cards (‘Nakul Swasthya Patra’)
  • An advanced breeding technology
  • Creation of ‘E-Pashudhan Haat’ – An e-market portal for connecting breeders and farmers
  • A National Genomic Centre for indigenous breeds

Agriculture Insurance

In order to protect the farmer from the adverse consequences of nature, govt. has recently announced PM Fasal Bima Yojna, which will have nominal premium and highest ever compensation in case of crop loss.

PS: Please click on the green hyperlinked text to read more about the concepts. Revise and revise & feel free to ask pertinent questions.

Published with inputs from Pushpendra | Image: Finmin
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