Govt proposes modest hike in farm and rural sector, contrary to expectation

It had allocated Rs 19,000 crore for the scheme to build houses for the rural poor in 2019-20 but had slightly lowered it to Rs 18,475 crore in the Revised Estimate of 2019-20

The Government has proposed a modest hike in the allocation for agriculture and rural development sector in the Union Budget 2020-21 – notwithstanding expectation of a substantial increase, to give a big boost to the village economy and help end the economic slowdown.

Finance Minister Nirmala Sitharaman on Saturday proposed to raise the allocation for agriculture and rural development sector by just Rs 6,822 crore – from Rs 2.76 lakh crore in 2019-20 to Rs 2.83 lakh crore in 2020-21. She proposed to earmark Rs 1.23 lakh crore for rural development and Rs 1.60 lakh crore for agriculture, irrigation and allied activities.

She also proposed to earmark Rs 61,500 crore for the Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS) for 2020-21 – just Rs 1,500 crore more than the Budget Estimate of 2019-20, but almost Rs 10,000 crore less than the Revised Estimate of 2019-20.

Though the Government had earmarked Rs 60,000 crore for the MGNREGS in the Union Budget 2019-20, a higher demand for employment under the programme due to rural distress had prompted it to raise the allocation for the demand-driven scheme to Rs 71,001.81 crore in the Revised Estimate of 2019-20. Still, fund crunch hit implementation of the scheme in some states in recent months.

The modest hike in allocation for the MGNREGS in particular or for the agriculture and rural development sector in general ran contrary to the speculation that the government might seek to provide more funds in order to boost village economy.

“Our Government is committed to the goal of doubling farmers’ incomes by 2022,” Finance Minister said, presenting the Union Budget 2020-21 in the Lok Sabha. “Prosperity to farmers can be ensured by making farming competitive. For this, farm markets need to be liberalised.”

She proposed to earmark Rs 19,500 crore for the Pradhan Mantri Gram Sadak Yojana (PMGSY) in 2020-21 – just Rs 500 crore more than the allocation in Budget Estimate of 2019-20. Though the government had earmarked Rs 19,000 crore to build rural roads in 2019-20, it had later slashed the allocation by Rs 4,929.30 crore in the Revised Estimate.

The Union Budget 2020-21 proposed to earmark Rs 19,500 crore for the Pradhan Mantri Awas Yojana (Gramin) or PMAY (G).