Budget 2024 balances fiscal prudence with growth and sets the tone for the next wave of reforms for the growth of the country. It facilitates all the key elements to sustain high growth of Viksit Bharat and primarily that of the agri economy. With an increase in allocation for rural development and a 5 per cent YoY increase in allocation for agriculture and allied sectors, this budget will strengthen the ‘Annadata’ – our farmers, the backbone of our nation, while providing a much-needed fillip for the overall economy’s growth. With a series of targeted initiatives, this budget aims to boost agricultural productivity and envisions a sustainable and resilient future with a thrust towards ‘digital’ for Indian farming.
Significant Investment in Agriculture: The government has allocated a healthy amount of ₹1.52 lakh crore to agriculture and allied sectors. This significant investment underlines the importance of agriculture in India’s growth story and sets the stage for transformative changes across the farming landscape. The budget’s focus is clear: enhance productivity, embrace sustainable practices, and strengthen market connectivity to improve the incomes and livelihoods of millions of farmers.
Boosting Productivity with the Rising Risks from Climate Change: A standout initiative is the introduction of 109 new high-yielding and climate-resilient crop varieties. This move addresses a critical need: As climate change increasingly disrupts traditional farming patterns, these new varieties will help farmers adapt to changing conditions, ensuring steady crop yields across diverse agro-climatic zones. These seeds, engineered for short growth cycles and resistance to floods and droughts, are crucial in closing the productivity gap between India and global standards.
Revolutionising Natural Farming: In a bold step towards natural farming, the budget set a goal of engaging one crore farmers in organic practices over the next two years. Establishing 10,000 bio-input resource centres will be pivotal in this transition, supporting farmers to move away from chemical fertilisers. This focus on natural farming is not just an environmental necessity but also a strategic move to improve soil health and reduce the long-term costs of farming.
Strengthening Value Chains and Reducing Losses: Post-harvest losses have long plagued Indian agriculture, with approximately 20-30 per cent of fruits and vegetables wasted annually (ICAR, 2023)[1]. The development of large-scale vegetable production clusters near major consumption centres is a targeted solution to this issue. By bringing production closer to markets, the government aims to minimise these losses, thereby increasing farmers’ incomes.
The budget also extends support to shrimp farming, processing, and exports through NABARD, offering new opportunities for coastal communities and further diversifying the agricultural economy.
A Leap Towards Digital Agriculture: The government’s push for Digital Public Infrastructure (DPI) in agriculture is set to be a game-changer. DPI will empower farmers with real-time access to crucial data—weather forecasts, market prices, and best practices—enabling them to make informed decisions and optimise their farming practices. This digital transformation is expected to enhance efficiency and productivity across the agricultural sector, bridging the gap between traditional farming methods and modern technology.
While the budget lays out a promising vision, the road to success will require concerted government and private sector efforts.
Key areas demand further attention:
Water Conservation and Management: India’s water resources are stretched, and the allocation for soil and water conservation remains low, accounting for just 2 per cent of the budget. There is an urgent need to accelerate capacity building in water conservation with improved irrigation systems, water harvesting, and efficient drainage. States like Andhra Pradesh, Telangana, and Punjab have shown how year-round water availability can significantly boost agricultural productivity. Expanding such models across India could ensure that the water needs of farming are met, even in drought-prone areas.
Private Investment in Agricultural Infrastructure: The private sector has a critical role in building resilience in agriculture. With food storage accounting for a mere 8 per cent of India’s total agricultural outlay, private investments in climate-resilient storage systems and infrastructure could reduce post-harvest losses and boost farm profitability. By developing advanced storage solutions and value chains, India could emerge as a net exporter of grains, driving higher revenues for the agricultural sector.
Mechanisation for Enhanced Productivity: Despite being a global leader in tractor production, India’s farms remain under-mechanized, with only 40-45 per cent mechanisation compared to 97 per cent in the US and 95 per cent in Western Europe. The adoption of farm mechanisation is essential to counter labour scarcity and escalating costs. Local R&D and manufacturing tailored to Indian conditions and rental entrepreneurship for equipment could make mechanisation affordable and accessible to small farmers. For instance, rice transplanters that automate paddy sowing could revolutionise rice cultivation, making it less labour-intensive and more efficient. Programs like Women Tractor Driving and Drone Didi demonstrate the potential of skill development initiatives in transforming rural livelihoods.
Conclusion: A Promising Yet Challenging Road Ahead
The Union Budget 2024 sets a strong foundation for transforming Indian agriculture, but the journey from policy to practice will require relentless effort. Effective implementation, coupled with support from both the public and private sectors, is crucial to realising the full potential of these initiatives. With a strategic focus on productivity, sustainability, and resilience, this budget could usher in a new era of prosperity for India’s farmers and the agricultural sector.
The author isCo-Chair, FICCI National Agriculture Committee
[1] ICAR (2023), “Post Harvest Losses of Fruits and Vegetables in India”
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