Allocation under Rashtriya Krishi Vikas Yojana Nearly Triples to 10,433 crore for 2022-23

Reorientation of 18 schemes under ten broad subjects, as well as increased freedom for states to implement their own agricultural plans, as well as a nearly 74% increase for fisheries and increased allocation for fertilizer subsidy amid a call to shift to natural farming, show a clear blueprint for the farm sector for next year.

Even though there were no specific new announcements as expected by stakeholders, the Budget document provides sufficient indications of what steps are likely to be taken over the next year.

After a long gap, the allocation under Rashtriya Krishi Vikas Yojana (RKVY) has nearly tripled to 10,433 crore for 2022-23, up from 3,712.44 crore (BE) in the current fiscal, and the increase is more than five times the revised estimate. The scheme, which began during the UPA administration, received support from Madhya Pradesh Chief Minister Shivraj Singh Chouhan, who even advocated for all Central schemes to be structured in this manner because it allowed states to develop and implement their own plans.

"There is a lot of emphasis on paddy and wheat procurement, but bulk allocation should shift to pulses and millets," former Union Agriculture Secretary SK Pattanayak said. More RKVY funding will allow states to shape the funds in any way they see fit, he says. However, he added, one must look at the total allocation for the farm sector after deducting PM-Kisan, crop insurance, and interest subsidies.

The allocation to PM-Kisan, Pradhan Mantri Fasal Bima Yojana (PMFBY), and crop loan interest subsidy account for 83% of the total 1,24,000 crore allocated to the Department of Agriculture and Farmers Welfare. In the current fiscal year (BE), these three schemes accounted for nearly 82% of the department's budget.

No Separate Programmes

The Budget has bundled all major activities in a 50:50 fund-sharing plan with states under a new Krishionnati Yojana divided into ten areas such as Agri extension, integrated development of horticulture, and seed and planting material. Separate programmes such as the National Project on Soil Health and Fertility, Rainfed Area Development and Climate Change, Paramparagat Krishi Vikas Yojana, and National Project on Agro-Forestry will no longer exist.

Previously, there was no allocation under extension, and a separate allocation of 1,000 crore to it will take care of many activities, with a micro-focus on this key activity that is crucial for raising farmers' income, whether it is technology adoption or reduction in input costs, according to an agriculture ministry official. The details of fund utilization will be worked out in consultation with states because the extension is within their purview, and they will also be required to deposit the matching share, according to the official.

According to the Economic Survey, the need to focus more on non-farm businesses, animal husbandry, dairy, and fisheries sectors to boost farmers' income has prompted Finance Minister Nirmala Sitharaman to increase allocation for the Department of Fisheries by 73.5 percent to 2,118.47 crore and for the Department of Animal Husbandry and Dairying by 26.3 percent to 3,918.84 crore.

Lower Allocation

However, there is no clear indication on chemical fertilizers, despite the fact that the Budget mentioned the need to shift towards chemical-free natural farming, as the urea subsidy has been kept at 67,186.78 crore, 7% more than the current year (BE), while it has been more than doubled to 42,000 crore in the case of phosphorous (P) and potash (K) (K). However, the allocation is lower in all three nutrients when compared to revised allocations for the current year.

"The emphasis on start-ups and AgriTech will be beneficial to the development of a digital ecosystem and the inclusion of technology in the farm sector." Most industry aspirations, however, remain unfulfilled," said Ajay Kakra, Leader – Food and Agriculture, PwC India.

The silver lining is that it has prioritized technology and logistics, both of which will benefit the agriculture sector. "Because the Budget was so cryptic and brief, we don't know the outlines of the actual proposals that will be revealed in the coming days," Pattanayak said.