The Hindu : National : Farming, rural development may keep the economy afloat

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Farming, rural development may keep the economy afloat

K. Balchand

NEW DELHI: The 2009-10 budget could see the integration of agricultural activities and rural development schemes not only because they helped to prevent the global slowdown from hitting the rural economy but also because the two sectors appear more likely to lift the country out of the rut.

Both the departments proclaim their roles in insulating the economy from the impact of the meltdown and delivering the goods, despite adversities. The United Progressive Alliance government seems to cherish the idea that its action on these two fronts had paid dividends in the Lok Sabha elections. The Rs.70,000-crore bailout package for indebted farmers and jobs for rural workers below the poverty line under the National Rural Employment Guarantee Act (NREGA) were among the measures.

The government’s objective is to drive home the advantage. The Ministry of Agriculture is now talking about piloting the Food Security Act, under which the government intends to make available 25 kg of rice to each below the poverty line family at Rs. 3 a kg every month. When the government mooted the idea, things were rosy: it had a good grain reserve. But the situation has changed now, with the delay in the onset of monsoon and sowing. The Department of Agriculture and Cooperation is confident that the monsoon will be more than kind in July and August, and farming will pick up, resulting in a production similar to last year’s quantum.

Should the monsoon play truant, the government may find it a daunting task to provide grain at such subsidised rates.

The impression in the department is that passing the law and implementing it after formulating the rules will take a long time. The earliest the government can roll out the scheme is the last quarter of the current fiscal. Hence, only a token gesture is in the offing.

Below normal rainfall also threatens to hit farm credit off-take, which has been pegged at Rs.3.25 lakh crore during the current fiscal. This will not only affect the rural economy but will also impact the economy in general and the demand for consumer goods in particular.

Despite the government’s claim, experts fear the delayed monsoon has already derailed the sowing process, and this will tell upon production.

With agriculture being at the crossroads, there are calls for a second green revolution to ensure a climate-resilient agriculture, with 60 per cent of the acreage still being dependent on the rain and all agro-related activities requiring reforms.

Aware of the limitations, the government is taking action through the programmes of the Rural Development Department to boost agriculture. The Department is set to enlarge the scope of works to be undertaken under the NREGA.

One of the most significant departures from the present format that is that the Rural Development Department intends making marginal and small farmers eligible for NREGA works. The programme was hitherto limited to the below poverty line families and manual labourers. The government wants to help marginal and small farmers to earn more income and improve land productivity.

The budget may well see a massive increase in the allocation under the NREGA, from Rs.30,000 crore in 2008-09 to Rs.40,000 crore.

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