Gujarat scare may sow seeds of farm-focused policy in Budget
, ET Bureau|
Dec 19, 2017, 06.18 AM IST
NEW DELHI: The BJP's victory in the Gujarat elections, hard-fought as it was, points clearly to the possible direction of the Budget that finance minister Arun Jaitley will present in February. Given its setbacks in non-urban areas, the big focus of the ruling party will be on agriculture and the rural economy, apart from a likely boost in minimum support prices (MSP).
FM Arun Jaitley told ET the results in a handful of Gujarat districts highlighted farmers' issues that the government will "analyse" and "address". He said higher spending on rural India and agriculture isn't populism. "Spending more is a necessity as far as rural India is concerned."
The FM said the victories in Gujarat and Himachal reflected public approval of GST. "Post-GST I think this was very important because there was no place better than Gujaratto test it, because it's a trade centre," he said. "And, I think most of the important trading centres of Gujarat we have won. Traders and business people have been very kind to us... they voted for us."
With Prime Minister Narendra Modi calling the result a win for reforms and development over the "poison of caste-ism", those themes will also be sustained through upcoming state polls to 2019's general elections.
Agriculture minister Radha Mohan Singh said the government will intensify farmer welfare schemes and ensure their effective implementation as well as the payment of MSP. "Our initiatives to double farmer income and increase production will gain more speed," he told ET. "Some states are not doing enough for procurement and giving support prices. The Centre will keep putting pressure that farmers should get MSP."
The February Budget will be the last full-fledged one that will be presented by FM Jaitley before the next election and is likely to be influenced by that fact. This could also mean a reset of the fiscal consolidation road map to give the government more spending room in the next fiscal.
The government is forging ahead with measures to increase farmer income such as major initiatives in dairy development, bee keeping, cold chains and food processing, agriculture minister Singh said. He agreed that rural India was distressed but said policies of the past seven decades were to blame. He insisted that farmers had backed the BJP in Gujarat.
"Farmers support us, otherwise we wouldn't have won. There is an 8 percentage point difference in the vote share (between BJP and Congress)," he said. A senior government official said disaffection in rural areas was the only key worry for the BJP that retained power with a lower number of seats in Gujarat. Initiatives such as increasing the spread of irrigation, doubling farmers' incomes by 2022 and higher MSP for farm produce would be intensified, he said.
Farm modernisation is critical to improving agricultural incomes, said Niti Aayog vicechairman Rajiv Kumar. "It implies that going forward we need radical and urgent steps in agriculture to double farmers' income," he said.
"This can happen only if they become part of entire value chain and don't remain confined as producers of commodities. We at the Niti Aayog are focusing on it and working extensively towards replicating and scaling successful practices in this regard. With the modernisation of agriculture and its transformation to high-value products, MSPs could well become inconsequential over time. That is a surer means to addressing farmers' distress."
Mohini Mohan Mishra, secretary of the Bhartiya Kisan Sangh, which is affiliated with the Sangh Parivar, said the vote reflected the ire of Gujarat's farmers. "There was anger among Gujarat farmers as they didn't get good prices in the kharif crop or even compensation during the adverse monsoon," he told ET.
"In 2018, the government will have to give profitable price to farmers in terms of MSP. It will also have to improve the procurement system with government to ensure it buys farmers' crops." BJP workers shared that concern.
"It was not PAAS (Patidar Anamat Andolan Samiti), but kapaas (cotton)," said one senior party leader, seemingly debunking the notion that caste equations played a role and pointing out that it was largely the state's cotton growers who had voted against the party.
Patel leader Hardik Patel's PAAS was allied with the Congress. Another top government official said rural incomes had suffered.
"Rural farmers have not got money for their produce since commodity prices have gone down," he said. "Globally, agriculture prices are down... government could do something for the farmer community now as they have suffered... We will have to see what they can do for this sector."
HDFC Bank chief economist Abheek Barua said, "Increase in MSP, higher allocations for MGNREGS (Mahatma Gandhi National Rural Employment Scheme), PMGSY (Pradhan Mantri Gram Sadak Yojana), loan waivers in states could dominate the economic policy landscape going forward if the rural Gujarat election results are taken as representative." GST and demonetisation didn't have any impact on the vote, he added.
(With inputs from Ruchika Chitravanshi)
FM Arun Jaitley told ET the results in a handful of Gujarat districts highlighted farmers' issues that the government will "analyse" and "address". He said higher spending on rural India and agriculture isn't populism. "Spending more is a necessity as far as rural India is concerned."
The FM said the victories in Gujarat and Himachal reflected public approval of GST. "Post-GST I think this was very important because there was no place better than Gujaratto test it, because it's a trade centre," he said. "And, I think most of the important trading centres of Gujarat we have won. Traders and business people have been very kind to us... they voted for us."
With Prime Minister Narendra Modi calling the result a win for reforms and development over the "poison of caste-ism", those themes will also be sustained through upcoming state polls to 2019's general elections.
Agriculture minister Radha Mohan Singh said the government will intensify farmer welfare schemes and ensure their effective implementation as well as the payment of MSP. "Our initiatives to double farmer income and increase production will gain more speed," he told ET. "Some states are not doing enough for procurement and giving support prices. The Centre will keep putting pressure that farmers should get MSP."
The February Budget will be the last full-fledged one that will be presented by FM Jaitley before the next election and is likely to be influenced by that fact. This could also mean a reset of the fiscal consolidation road map to give the government more spending room in the next fiscal.
The government is forging ahead with measures to increase farmer income such as major initiatives in dairy development, bee keeping, cold chains and food processing, agriculture minister Singh said. He agreed that rural India was distressed but said policies of the past seven decades were to blame. He insisted that farmers had backed the BJP in Gujarat.
"Farmers support us, otherwise we wouldn't have won. There is an 8 percentage point difference in the vote share (between BJP and Congress)," he said. A senior government official said disaffection in rural areas was the only key worry for the BJP that retained power with a lower number of seats in Gujarat. Initiatives such as increasing the spread of irrigation, doubling farmers' incomes by 2022 and higher MSP for farm produce would be intensified, he said.
Farm modernisation is critical to improving agricultural incomes, said Niti Aayog vicechairman Rajiv Kumar. "It implies that going forward we need radical and urgent steps in agriculture to double farmers' income," he said.
"This can happen only if they become part of entire value chain and don't remain confined as producers of commodities. We at the Niti Aayog are focusing on it and working extensively towards replicating and scaling successful practices in this regard. With the modernisation of agriculture and its transformation to high-value products, MSPs could well become inconsequential over time. That is a surer means to addressing farmers' distress."
Mohini Mohan Mishra, secretary of the Bhartiya Kisan Sangh, which is affiliated with the Sangh Parivar, said the vote reflected the ire of Gujarat's farmers. "There was anger among Gujarat farmers as they didn't get good prices in the kharif crop or even compensation during the adverse monsoon," he told ET.
"In 2018, the government will have to give profitable price to farmers in terms of MSP. It will also have to improve the procurement system with government to ensure it buys farmers' crops." BJP workers shared that concern.
"It was not PAAS (Patidar Anamat Andolan Samiti), but kapaas (cotton)," said one senior party leader, seemingly debunking the notion that caste equations played a role and pointing out that it was largely the state's cotton growers who had voted against the party.
Patel leader Hardik Patel's PAAS was allied with the Congress. Another top government official said rural incomes had suffered.
"Rural farmers have not got money for their produce since commodity prices have gone down," he said. "Globally, agriculture prices are down... government could do something for the farmer community now as they have suffered... We will have to see what they can do for this sector."
HDFC Bank chief economist Abheek Barua said, "Increase in MSP, higher allocations for MGNREGS (Mahatma Gandhi National Rural Employment Scheme), PMGSY (Pradhan Mantri Gram Sadak Yojana), loan waivers in states could dominate the economic policy landscape going forward if the rural Gujarat election results are taken as representative." GST and demonetisation didn't have any impact on the vote, he added.
(With inputs from Ruchika Chitravanshi)
