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Karnataka budget 2017

March 15, 2017 | Expert Insights

Will Budget help the farmers’ income?

On 15 March 2017, the Karnataka Budget for 2017-18 was released and has proposed a number of measures to reduce the price of wine & cinema tickets. Karnataka Chief Minister Siddaramaiah announced in the State Budget on Wednesday that value-added tax (VAT) on liquor will be removed from April 1. This includes beer, fenny, liqueur and wine.

Highlights from his budget speech?

  • Siddaramaiah announces 'Namma Canteen' on the lines of Tamil Nadu's 'Amma Canteen'
  • New airports to be built in Karwara, Madikeri and Chikkamagaluru.
  • New scheme of Yuva Yuga to train 1.10 lakh people in IT, electronics, animation and other sectors proposed.
  • Budget proposes widening of Hebbal flyover and construction of an under bridge at a cost of Rs 88 crore.
  • High end motorbikes, above Rs 1 lakh, to become expensive as MVT increased to 18 per cent from 12 per cent.
  • Government to regulate multiplexes by making the maximum entry fee at Rs 200.
  • Rs 5080 crore allotted for agricultural sector. Industrial growth expected at 2.2%.
  • BMTC to induct 3000 more buses, out of which 150 will be run on electricity, 50 electric buses for Mysuru.
  • Siddaramaiah lifts VAT on wine, beer, wine and hard liquor.
  • Opening balance: Rs -176.04cr. Total Receipts: Rs 1,44,891.54cr. Total Expenditure: Rs 1,44,755cr. Surplus: Rs 136cr.
  • One ambulance service will be provided for a radius of 10 to 15 km.
  • Free laptops for 1st year engineering, medical, polytechnic and first grade colleges proposed.
  • Heath care services

 

Analysis

Arun Jaitley, Finance Minister announced in the Union Budget 2017 to boost the agriculture sector. Higher agricultural credit, higher allocation for irrigation projects, a crop insurance scheme and increased allocations for MGNREGA to dig farm ponds were among the measures announced on February 1. But will these help attain the goal of doubling the farmer’s income by 2022?

The average monthly income of the Indian farm household was estimated to be about ₹6,426 by the Situation Assessment Survey of Agricultural Households in its NSS 70th round. During the same period, the average monthly consumption expenditure per agricultural household was ₹6223. For cultivation-related expenses, the farmer is mostly dependent on loans and the NSSO survey revealed that half of the farm households were neck-deep in debt.

Commodity pricing

For any real increase in income, farmers require higher returns for their produce. The recommendations of the National Commission on Farmers - to provide the minimum price of the total cost of production plus 50% - are implemented.

Assessment

The recent 2017-18 budget is good for agriculture but clearly not enough. No single budget can be enough any way for the revitalization of a large sector like Agriculture which supports nearly 50% of India's work force.

The government must take a decisive step to transforming agriculture and other land uses using a Natural Resource Management Framework that will conserve natural resources and make agriculture more productive supporting Hon PM's goal of Doubling Farmer Incomes by 2022.