UNION BUDGET

2020-2021

ANALYSIS ON:-
AGRICULTURE,IRRIGATION AND
RURAL DEVELOPMENT SECTOR
 16 ACTION PLAN POINTS TO REVIVE AGRICULTURAL SECTOR

1. Krishi Udan scheme to boost agricultural exports in both international as well as domestic
routes
2. Target for Agricultural credit has been increased to Rs 15 lakh crore from Rs 12 lakh crore
3. Agriculture and irrigation has been allotted Rs 2.83 lakh crore for FY21
4. Rural Development and Panchayati Raj have been allotted Rs 1.23 lakh crore
5. Expansion of NABARD Refinancing Scheme while MGNREGS to be used to develop fodder farm
6. Fish production to be raised to 200 lakh tonnes by 2022-23
7. By 2025, milk processing capacity to be doubled to 108 MT
8. Government proposes measures to improve situation in 100 water-stressed districts
9. Government to set up 20 lakh to benefit farmers
10. Kisan Rail to be setup in PPP mode for perishable goods
11. One product for one district, so that focus is given at district level for horticulture to gain
momentum
12. Government to focus on Zero Budget farming
13. e-NAM to be integrated with financing of negotiable warehousing recipts
14. Farm markets to be liberalised
15. Balanced use of fertilizers in the farm lands
16. In a bid to liberalise agricultural markets, the govt plans handhold farmers
 GROWTH RATE FOR SECTORAL GROSS
VALUE ADDED

The agriculture sector is estimated to grow at 2.8% in FY20, compared to 2.4% in the previous
FY. However, growth in the first two quarters of FY20 has been 2% and 2.1%, respectively, which
is significantly lower than 5.1% and 4.9% growth witnessed in the first two quarters of FY19. As
per Economic Survey, the growth in real wages for agricultural workers has been negative during
Q4 FY19 – Q3 FY20.
 UNION BUDGET 2020-21: NOT ONE TO DOUBLE FARMERS' INCOME
• Finance minister Nirmala Sitharaman
allocated Rs 1,34,399.77 crore to the
Department of Agriculture, Cooperation and
Farmers Welfare on February 1, 2020.
• Of the Rs 1,30,485.21 crore allocated in 2019-
20, the Union government may be able
to spend only Rs 101,904 crore, according to
revised estimates.
• The largest chunk — Rs75,000 crore — of the
farm budget for 2020-21 went to Pradhan
Mantri Kisan Samman Nidhi (PM-Kisan), the
scheme for providing cash support to farmers. 
• Narendra Modi government announced PM-
Kisan, under which the central government
would provide Rs 6,000 per year to small and
marginal farmers in three equated
instalments.
• The budget for agriculture insurance schemes
was increased from to Rs15,695 crore from Rs
13,640 crore (revised estimate for 2019-20). 
 UNION BUDGET 2020-21: TOTAL RURAL BUDGETARY ALLOCATION, INCLUDING MGNREGA
SLASHED

• This comes even as rural India is suffering

its worst unemployment crisis in 45 years.
• The Union government slashed budgetary
allocation for its flagship Mahatma Gandhi
National Rural Employment Generation
Act (MGNREGA) in the Budget 2020-21, at
a time when rural India is facing all sorts of
crises including rising food bills and highest
unemployment in the last five decades.
• MGNREGA’s budgetary allocation for the
current year is just Rs 61,500 crore. The •The allocation of Indira Gandhi National Old
revised estimates for 2019-20 was Rs Age Pension Scheme was 6,259 crore — a
71,001.81 crore.  deduction by Rs 42 crore from revised
• The Pradhan Mantri Gramin Sadak Yojana estimates. The budgetary allocation for the
received Rs 19,500 crore in budgetary National Family Benefit Scheme remained the
allocation whereas the revised estimate of same as the revised estimate of Rs 622 crore.
2019-20 shows it received Rs 14,070 crore.
The budgetary allocation to the scheme •The budget of the Indira Gandhi National
last year was Rs 19,000 crore. Widow Pension Scheme also remained the
same — Rs 1,938.79 crore
 ECONOMIC SURVEY 2019-20: AGRICULTURE GROWTH STAGNANT IN LAST 6 YEARS

• The average annual growth rate in real terms in agriculture as well as its allied sectors has
remained static in the last six years, in turn impacting farmers’ income, the Economic Survey
2019-20, released on January 31, 2020, has said.
• The annual growth rate in real terms in agriculture and its allied sectors was 2.88 per cent
from 2014-15 to 2018-19, according to the Survey. The estimated growth rate in 2019-20 is
2.9 per cent.
DECLINING FERTILISER RESPONSE RATIO
 BUDGET 2020-21: EXPECT DIRECT BENEFIT TRANSFER FOR UREA
• The move aims at controlling excessive urea
usage and promoting zero-budget farming
• The Union government is likely to announce a
direct benefit transfer scheme for urea
subsidy in the 2020-21 Budget on February 1,
a highly-placed source has told Down To Earth
(DTE).
• A 45-kg sack of urea currently retails for Rs
266.50, after subsidy. Without it, the price is
Rs 450
• The government has decided to transfer Rs
183.50 directly to farmers’ accounts that are
linked with their biometric Aadhar numbers.
• The arrangement will be similar to the LPG
subsidy system where consumers first pay the
whole amount while the subsidy amount is
returned to them by the government after a
few months
• The Centre had provided Rs 73,000 crore as
fertiliser subsidy to the urea-based companies
for 2018-19.