AGRICULTURE SECTOR

GOVERNMENT
BUDGET
Made by- Shakshi Yadav
Course- BBA (SEM1)
Roll No.-08035101720
Faculty’s Name- NEHA SHIVANI
CLASS- SECTION-D
SUBJECT- BUSINESS ECONOMICS
INTRODUCTION
Agricultural is the most important sector of Indian economy. Indian
agriculture sector accounts for 18 per cent of india’s gross domestic
product (GDP) and provides employment to 50 % of the countries
workforce. India is the world’s largest producer of pulses, rice, wheat,
spices and spice products. The agriculture sectors comprises
establishments primarily engaged in growing crops, raising animals,
and harvesting fish and other animals from a farm, ranch or their
natural habitats. The country’s agriculture sector is made up of 4 sub-
sectors: farming, fisheries, livestock, and forestry ( the latter 2 sectors
are very small), which together employ 39.8 percent of the labour
force and contribute 20 percent of GDP. Agricultural commodities
produced have to undergo a series of operations such as harvesting,
threshing, transportation, storage and exchange before they reach the
market. Essential agricultural commodities export for the April-
September period of 2020 increased by 43 % to Rs53626 crore (US$
7.3 billion) over Rs 37397 crore (US$ 5.1 billion) in the same period
last year. It contributes about 17 % to the total GDP and provide
employment to over 60 % of the population.

Indian food and grocery market is the world’s sixth largest, with retail
contributing 70 % of the sales. The Indian food processing industry
accounts for 32 % of the country’s total food market, During 2019-20
crop year, food grain production was estimated to reach a record
295.67 million tonnes (MT). In 2020-21, government of India is
targeting food grain production of 298 MT. Production of horiculture
crops of India was estimated at a record 320.48 million metric tonnes
(MMT) in FY20 as per second advance estimates. India has the
largest livestock population of around 535.78 million, which translate
to around 31 % of the world population. The organic food segment in
India is expected to grow at a CAGR of 10 % during 2015-25 and it
estimated to reach Rs 75000 crore by 2025 from Rs 2700 crore in
2015.
IMPORTANCE OF AGRICULTURE SECTOR
1. Increase in per capita income :- Per capita income is the annual
average income of the individuals of a nation. We derive it by
dividing national income on total population. Agricultural sector
provides more jobs to unemployed people. It increases the
individuals as well as national income.

2. Major source of employment :- Agriculture sector provides

employment to major portion of our labour force. More than 43.0
% of our labour force is directly involved in agricultural sector,
while 66.7 % of our rural population is dependent on agriculture.

3. Reduction in poverty:- Africulture department has significant

impact on rural development. It productivity increases in
agriculture it reduces poverty and stimulates non- farm
employment, too. They are able to get basic services of life such as
water supply, sanitation, provision of health and educational
facilities.

4.Supply of food:- Food is the first in basic necessities of the life. The
agriculture sector is the sole provider of all type of food like wheat,
rice, vegetables and fruits etc. to the population engaged in various
sectors of the economy.

5.Supply of Raw Materials:- Agriculture sector provides not only

food but also provides cotton, sugarcane, tabacco, rice and milk to
various agro- based, small scale and large scale industries as a raw
material.

6. Controlling inflation:- Inflation refers to the increase in general

price level. It may be due to increase in demand and shortage in
supply. Agricultural sector is very helpful to control the inflation. It
produces more goods and maintains the equilibrium in demand and
supply.

GOVERNMENT BUDGET 2018-19

The union budget 2018-19 was presented on feb 01,2018. The
budget encompasses higher minimum support prices and
increased from credit targets.

Overview of Budget- 2018-19

The union budget 2018-19 was presented on February 01, 2018.
Government called the budget farmer friendly, common man friendly,
but there are always criticisms from oppositions and experts. The
budget encompasses higher minimum support prices and increased
farm credit targets. This is an assessment of the impact of the budget
on farmers which is crucial to our work.

Agriculture and Farmers Welfare:  Overall 2.3 % of the overall

budget
The Highlights are : – 
 To raise minimum support price for kharif season crops to 1.5
times of agri production cost—that is cost plus 50 percent
 Institutional credit for agri-sector increased to 11 lakh crore for
FY19 from 10 lakhs crore last year
 A Rs. 10,000 crore fund has been set up for fisheries and animal
husbandries
 Strengthening the e-National Agricultural Market network
 In all, 470 APMCs have been connected to e-NAM, which
connects farmers with mandis for price discovery
  Around 22,000 rural haats, GrAMs ( Gramin Agricultural
Markets) would be developed as agro hubs with NITI Aayog to
allow farmers to get better price realisation. Rs 2,000 crore fund
has been set up for the same
 Operation Green’ will be launched for agriculture and allocated
Rs. 500 crore for it. This is to address the price volatility of the
perishable commodities like Potato, Onion and Tomato
 To increase agriculture exports to $100 billion, linkages with 42
food parks will be created.
 The government will also facilitate a futures and options market
for agriculture, along with improved warehousing facilities,
agri-logistics and processing facilities
 It will encourage organic farms that are 10,000 hectares in size
 The crop insurance scheme has been allotted Rs 13,000 crore
compared to Rs 10,698 crore in the revised estimates of 2017-18
 Allocation for Ministry of Food Processing doubled to Rs.1400
crore
 Loans to Self Help Groups (SHG) of women to increase to
Rs.75,000 crore by March 2019
 Increased allocation of National Rural Livelihood Mission to Rs
5750 crore
 Cluster-based approach for horticulture farming

GOVERNMENT BUDGET 2019-20 

Budget 2019-20. Agriculture, cooperation and farmer’s welfare has

been allocated Rs 130485 crore in 2019-20.

1. Farmer’s income doubled: All 22 crops have been put under

minimum support price. The various pro-farmer policies have
led to the production of agricultural commodities in record
quantities.
2. Launched “pradhan mantri kisan samman nidhi (PM-KISAN)”,
under which, vulnerable landholding farmer families, having
cultivable land up to 2 hectares, will be provided direct income
support at the rate of Rs 6000 per year. This programme will
entail an annual expenditure of Rs 75000 crore.
3. Increased the allocation for Rashtriya Gokul Mission to Rs 750
crore in the current year itself. Announced setting up “Rashtriya
Kamdhenu Aayog” to up scale sustainable genetic up- gradation
of cow resources and to enhance production and productivity of
cows.
4. It is good to see the impetus given to start ups, MSMEs and
FPOs- which form the backbone of our economy and also to
electronic vehicles. Further, by setting up a national research
foundation, addressing challenges faced by start-ups and
committing to transforming the education system, the budget is
set to boost innovation in the country. Innovation will from the
bedrock of the digital economy in india.
Reforms announced by the finance minister

 Fertilisers subsidy:- The budget allocation has been increased

by approximately Rs 5000 crore for the subsidy programme
over the last year. Urea-based subsidy was increased while
nutrients -based subsidy largely remained the same.
 Income Support Scheme:- A structed income support scheme
was announced for farmers with land holding that are less than
two hectores called the Pradhan mantri kissan samaan nidhi,
rural and poor farmers will receive Rs 6000 per year. This will
be transformed in instalments of Rs 2000 to the bank accounts
of the farmers directly the centre.
 Dairy development:- Rs 750 core was allocated to the Rashtriya
Gokul Mission, which is a reduction from the budget of last
year.
 Crop insurance scheme:- The problem mantri fasal bima yojana
saw an increase in allocation to Rs 14000 crore which is Rs
1000 crore more than last year.
 Crop husbandry:- The allocation for crop husbandry has
increased to Rs 86600 crore in 2019-20 from Rs 14700 in 2018-
19.
Minimum support price:- The allocation for market intervention
schemes has increased to Rs 300 crore from Rs200 crore with a
revision in allocation for FY19 to Rs 2000 crore.

GOVERNMENT BUDGET 2020-21

The department of agriculture, cooperation and farmer’s
welfare has been allocated Rs 134400 crores in 2020-21.

1. 16- Point action plan includes: Krishi udan scheme to

boost agricultural expots in both international as well as
domestic routes.
2. Committed to goal of doubling farmers income by 2022.
3. Model agricultural produce and livestock contract
farming and services Act, 2018.
4. Provide 20 lakh farmers for setting up stand alone solar
pumps.
5. Propose creating warehousing, in line with warehouse
department and Regulatory Authority (WDRA) norms.
6. A village storage scheme is proposed to be run by the
SHGs.
 7. MNREGs would be dovetailed to develop fodder farms.
Further, facilitate doubling of milk processing capacity
from 53.5 million MT to 108 million MT by 2025.
8. PM-KISAN accounts scheme was launched in feb, 2019
to provide income support to Rs 6000 per year to farmer
families with the aim of supplementing their financial
needs in producing inputs.
 Implimentation:- The scheme was expected to
cover 12.5 crore beneficiaries are estimated to be
14.5 crore. As on feb 11, 2019, 8.9 crore
beneficiaries have been covered under the scheme.
 PM KISAN accounts for 53 % of the allocation to
the ministry in 2020-21. Other expenditure items of
the ministry, including subsidy for short-term credit
to farmers and Pradhan mantri fasal bima yojana
have been allocated Rs 67762 crore in 2020-21, a
22 % increase over the previous year.

GOVERNMENT BUDGET 2021-22

1. Focus on ensuring increased credit flows to animal

husbandry, dairy, and fisheries.
2. Enhancing the allocation to the rural infrastructure
development food from Rs 30000 crores to Rs 40000
crores.
3. Propose to double the Micro Irrigation fund corpus by
another Rs 5000 crores.
 4. “Operation Green Scheme” that is presently applicable to
tomatoes, onions and potatoes will be enlarged to include
22 perishable products.
5. 1000 more mandis will be integrated with e-NAM.
6. The agriculture infrastructure food would be made
available to APMCs for augmenting their infrastructure
facilities.

COMPARISON ANALYSIS
 Comparison previous three year data with current year
data.

Allocation to the Ministry for last three years 2018-19,

2019-20, 2020-21 (in Rs. Crores)

% change in
2018-19 2019-20 2020-21
Department 2020-21 over
Actuals Revised Budgeted
2019-20

Agriculture,
Cooperation
46,076 1,01,904 1,34,400 31.9%
and Farmers’
Welfare

Agricultural
Research and 7,544 7,846 8,363 6.6%
Education

Total 53,620 1,09,750 1,42,762 30.1%

This above table shows that in year 2020-21 there is
allocation of Rs 134400 crore in agriculture, cooperation and
farmer’s welfare. In 2020-21, Agricultural Research and
education has been allocated Rs 8363 crore, a 7 % increase
over the revised estimate of 2019-20.
Development pf Agriculture, cooperation and farmer’s
welfare was launched 8.5 % in 2021-22.
This allocation is 30 % higher than the revised estimate for
2019-20, primarily due to a higher allocation of Rs 7500 crore
to PM-KISAN for 2020-21. The PM-KISAN scheme meant to
provide income support to farmers, a 13 % drop in budget,
which is Rs 10000 crore lower than last year’s initial
allocation.