From Special Flights to Solar Plants: India Turns to Distressed Farmers to Halt Sinking Economy

Indian Finance Minister Nirmala Sitharaman on Saturday laid out three themes for the 2020 budget – aspirational India, economic development, and a caring society – while focusing on enhancing the income of people living in rural parts of the country.

Presenting her second budget, the minister said that government is proposing 16 measures to double the income of farmers by 2022.

The measures come against the backdrop of dwindling consumer spending in rural areas, which is currently at a four-decade low.

She announced around $40 billion in funds for the rural sector including agriculture and related activities for the 2020 fiscal year which is a mere 4.54 percent hike in allocation as compared to last year's budget.

“This is a budget to boost incomes and enhance purchasing power… The government is committed to doubling farmers’ income by 2022. Farm markets need to be liberalised, farming needs to be made more competitive, hand-holding of farm-based activities need to be provided, sustainable cropping patterns and more tech needed”, Sitharaman said in the Parliament’s lower house Lok Sabha on Saturday.

The minister requested states to consider implementing model agriculture laws that promote contractual farming.

She proposed to launch comprehensive measures for 100 water-stressed districts while setting up a $211 billion credit target for the agriculture sector.

To achieve zero budget farming goal, the Narendra Modi government has encouraged the balanced use of all kinds of fertilisers to curb the use of excessive chemical fertilisers by farmers. The government claimed that India had lifted 271 million people out of poverty between 2006-2016.

Special Flight for Farmers

The government announced a Krishi (Agriculture) UDAN scheme which provides special flights on international and national routes to improve value realisation in northeastern Indian states near the Chinese border and tribal districts.

These special flights will transport agriculture produce to domestic and international markets from those areas known as major producers of horticulture and fruits.

Special Railway for Farm Produce

The government in this year’s budget has also proposed to set up a “Farmer Train” under a public-private partnership model to transport perishable items. It said there shall be refrigerated coaches in express trains and freight trains as well so that perishable goods can be quickly and easily transported within the country and benefit will accrue to the farmers.

Export-Based Farming

For better marketing and export, the government has suggested that around 28 states and 9 union territories focus on one product for one district (the country has around 700 districts), so that high focus is given at the district level for horticulture to gain momentum.

Solar Plant by Farmers

Trying to cash in on the successful national solar mission, the government has likewise set a target to help 20 lakh (2 million) farmers set up standalone solar pumps. Finance Minister Sitharaman said that the federal government will help farmers with barren lands to set up solar power generation plants so that they can earn a living by selling the electricity generated.

“A scheme to enable farmers to set up solar power generation capacity on their fallow and barren lands, and to send it to grid would be operationalised", Sitharaman said during the budget speech.

The Indian government has aimed to set up 175 GigaWatt clean power by 2022.

Dairy Products and Fisheries

The government hopes that more dairy products and fishery items will boost incomes in rural areas, thereby increasing purchasing power. In the new budget, Modi's government has proposed doubling milk processing capacity by 2025 while it will also put in place a new framework for development, management, and conservation of marine fishery resources in a bid to increase fish production to 20 million tonnes by 2022-23.

Agriculture constitutes 14% percent of India’s annual national income but government data suggests that 44 percent of people in the country are employed in this sector, making agriculture the backbone of the rural economy. The annual budget was announced at a time when, as per official estimates, the overall economy will grow at an 11-year-low of 5 percent and its agriculture and allied sector at 2.8 percent.