Budget tilted against farm sector

Sandeep Dikshit

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Tribune News Service

New Delhi, February 2

The Union Budget’s altruistic motives have come under a cloud after the warnings about unrealistic targets for the last year’s Budget have proved prescient.

Countering the Opposition’s charge that the targets for tax collection and disinvestment were unrealistic, Union Finance Minister Nirmala Sitharaman had in 2019 said, “Every estimate of receipts and the projections that we have given are realistic, (after) applying our mind to the points…. (will) fully finance expenditure commitments, necessary resource mobilisation from tax and non-tax revenues have all been envisaged.”

None of that came to a pass. The shortfall in direct and indirect tax revenue, along with the missing of the disinvestment target, brought expenditure under pressure, leading to a reduction in the areas that the government had stated were its priorities—the farm sector and the poor—making a bridge too far Sitharaman’s promise in this Budget to double milk and fish production which is part of a 16-point action programme to rejuvenate the rural sector.

As against the promises for the agriculture sector, the gains for the corporate have been here and now. Given a Rs 1,46,000 crore bonanza before the Budget in the form of tax cuts, corporates have seen their bond limits raised to 15 per cent, government paper opened up entirely to non-resident capital, relief from dividend distribution tax and extension of concessional 5 per cent withholding tax for interest payments on debt.

If this year’s whammy for the farm sector in the revised estimates for 2019-20 is any indication, next year’s actual outlay becomes uncertain if the government is again unable to meet the tax collection and disinvestment targets. The main scheme for rural areas, PM Grameen Sadak Yojna was reduced in this fiscal by nearly Rs 5,000 crore and the scheme for irrigation by about Rs 2,000 crore. Outlay for midday meal had to be pared down by about Rs 1,000 crore and the integrated child development scheme by over Rs 2,500 crore.

This year’s fiscal deficit is at a high of 3.8 per cent, yet the additional borrowings were not enough to fully finance even the Skill Development and Ayushman Bharat schemes this year. Both have suffered cuts of about Rs 1,511 crore and Rs 3,200 crore, respectively.

The government would have to be mindful of its revenue collection targets in the next fiscal in order to guard against the balance tilting unfavourably towards the poor and the rural folk.