Acknowledging the importance of the agriculture sector,
which contributes around 25% to the country's GDP and employs around 65% of the
workforce, the Finance Minister has announced a number of steps to boost the sector's
fortunes.
Agricultural Produce Marketing Acts have been
amended thereby enabling farmers to sell directly to processors. This is expected
to lead to a reduction in intermediaries involved, which in turn will lead
to higher disposable income in the farmers' hands.
Considering that a large proportion of the farm
produce is wasted due to lack of appropriate storage facilities, the additional
allocation of Rs 700 mn to Credit-linked Subsidy scheme for the construction
of cold storages and rural godown schemes is a welcome step.
Another important development has been the removal
of barriers to interstate trade. This will help farmers obtain remunerative
returns for their produce.
Decanalization of agricultural commodity exports
and phasing out of remaining export controls will also enable the farmers
to explore a wider market.
Apart from this the Finance Minister also announced
a number of steps for improvement of rural employment and infrastructure.
On the flip side, in order to reduce the Government's
subsidy burden, there has been an increase in issue price of fertilizers like
Urea, DAP and MOP by 5%.
However, the important point to note is that
the performance of the agriculture sector in India is still highly dependent on
the monsoon. Although the Government has increased the allocation for Accelerated
Irrigation Benefit Programme (AIPB) from Rs 200 bn in the current year to Rs 280
bn in 2002-03, much more needs to be done to reduce the dependence of agriculture
on the vagaries of nature.
