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Sharad Joshi

THE Finance Minister, Mr Yashwant Sinha, had said that the Budget 2002 would focus on agriculture, and it certainly did. The time the Finance Minister devoted to agriculture in Part A of his Budget speech was the longest in recent memory. There is also a difference in quality. Mr Sinha appears to have quietly shelved the National Agricultural Policy document and put before Parliament a whole new mindset and approach.

In a Doordarshan telecast on February 27, I had expressed a wish list for agriculture. The list tallies, though one could not have expected the Finance Minister to go the whole hog: "All restrictions on transport, storage and marketing must go." That was the first point Mr Sinha made. He has set for the Government the objective of a National Integrated Agricultural Market — something the farmers' movement has been demanding for 20 years. In fact, the theme of the Budget is `Freedom for Farmers', which is in accordance with `Freedom for Bharat.'

A moratorium was recommended on coercive recoveries of arrears of debt-repayments and electricity bills. The Finance Minister announced one-time settlement schemes on both these scores.

Also recommended was the setting up of a nationwide network of laboratories that would certify the grade and the quality of farmers' produce. Mr Sinha proposes to make Krishi Vigyan Kendras (KVKs) the nodal points for this activity.

It was hoped that the hackneyed Agricultural Produce Market Committees (APMCs) would be replaced by a retail network that would bring closer together the consumer and the producer. The Budget stipulates direct access for farmers, at least to processing units, without having to go through the APMCs, whose monopoly is finally broken. It is heartening that the Finance Minister is determined to continue the progress towards convertibility of rupee on capital accounts. Openness on this point might help India's competitive status in the world market.

The happy note continues even in Part B of the Budget speech:

The Customs duties have been limited to two rates — 20 per cent and 30 per cent. But, Mr Sinha refers specifically to the exceptions required by the bound tariff rates under the WTO Agreement on Agriculture.

The product of the agro-processing unit is exempted from excise duties.

The Customs duty on agro-processing machinery has been reduced.

A provision on direct tax provides for an exemption on amounts spent on afforestation.

It is unfortunate that the Finance Minister considered it necessary to increase the prices of urea and complex fertilisers by 5 per cent. Given the din of protest this point provoked, one may expect a rollback, at least partially, on this score.

Rationalisation of the subsidy scheme itself would bring down the subsidy amount without the imposition of additional burden on the farmers. It is difficult to understand why the Government cannot follow the same roadmap as for the oil-pool and simply let the market forces prevail.

The Finance Minister made telling points on what could be achieved by deft use of food stocks. He might as well have gone into the possibility of replacing the FCI operations by a system of certified warehouses that issue warehousing receipts under the Negotiable Instruments Act.

Finally, Mr Sinha did not permit the bogey of agricultural income-tax to raise its head. He has held that agricultural income-tax is a State matter, and passed the buck to the States, more than half of which are controlled by Opposition, in any case.

(The author is Founder, Shetkari Sanghatana. Feedback may be sent to {lt}sharad@mah.nic.in{gt}.)

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