Despite severe political challenges, Prime Minister Narendra Modi has signalled through the Budget that his government%u2019s push on reforms in key sectors including agriculture remains unchanged.
Secondly, he is not letting the current stalemate over the three farm bills dampen the government%u2019s overall enthusiasm for much needed changes that are seen as must in other sectors %u2014like banks and other financial institutions, which are over burdened with unrecoverable loans.
Finance Minister Nirmala Sitharaman announced the most ambitious plan to privatise central public sector enterprises (CPSEs). The government will maintain a bare minimum presence in only four strategic sectors, as part of the Atmanirbhar package.
The four sectors are atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services. %u201CAll CPSEs in other sectors will be privatised,%u201D she said. %u201CIn four areas, a bare minimum number of firms will be retained and the rest will be privatised. In other sectors, all firms will be privatised in tune with a clear roadmap for disinvestment in strategic and non-strategic sectors.”
The firms that will be privatised in 2021-22 include Bharat Petroleum Corp Ltd, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, Bharat Earth Movers Ltd, and Pawan Hans.
In fact, the PM%u2019s decision to go ahead with the sale of two public sector banks and one insurance company in the next fiscal is by all means seen as a %u201Cbold decision%u201D in the current political environment.
The government thinks that strategic disinvestment is needed for the hour despite the Opposition, particularly Rahul Gandhi, constantly accusing it of trying to sell %u201Cthe family silver%u201D to %u201CModi%u2019s crony capitalist friends.%u201D
Thirdly, the Budget also gave a clear message that the government would go ahead with big spending on health following the pandemic, human capital and infrastructure even if it means revising the fiscal deficit limits and going in for a massive public borrowing for the objective of creating jobs and national assets.
The focus of Budget 2021 is to boost public expenditure, declared Finance Minister Nirmala Sitharaman. “An infrastructure project may take 5 years to be completed. But job creation will take place now,” she said.
The overall political message from the Budget was outlined by the PM himself soon after Nirmala Sitharaman ended her speech in Parliament.
Modi chose to underline that, while the Budget has the “vision of self-reliance%u201D and features every section of the society, it has at heart the concern about increasing the farmers‘ income.
%u201CFarmers will be able to get loans easily. Provisions have been made to strengthen APMC markets with the help of the Agriculture Infrastructure Fund,%u201D said the PM.
He was countering criticism  that his government is weakening the mandis by allowing new platforms to farmers to sell their produce.
The Finance Minister sought to outline that the budget stands on six pillars%u2014health and wellness, physical and financial capital and infrastructure, inclusive development for aspiring India, To infuse new life into human capital, innovation and R&D, and minimum government and maximum governance.
In her speech, she did not mince words. She mentioned ‘privatisation’ several times, which is being seen as a departure from the general practice as the government shies away from mentioning the word.
As opening up of the agriculture sector is top priority for the government in keeping with the new farm laws, Sitharaman enhanced the agricultural credit target to Rs 16.5 lakh crore in FY-22 by ensuring increased credit flows to animal husbandry, dairy, and fisheries.
Sitharaman also announced the enhancement of the allocation to the Rural Infrastructure Development Fund from Rs 30,000 crore to Rs 40,000 crore. She proposed to double Micro Irrigation Fund, started with a corpus of Rs 5,000 crore under NABARD, by augmenting it by another Rs 5,000 crore.
In response to the barrage of criticism since the farm bills, the Finance Minister dwelt at length about how the Minimum Support Price regime had gone through “sea change” to assure prices at least 1.5 times the production cost.
She gave details of procurement and amount paid to farmers over the years. In the case of wheat, the total amount paid to farmers in 2013-2014 was Rs 33,874 crore. In 2019-2020, it was Rs 62,802 crore, and even better, in 2020-2021, this amount, paid to farmers, was Rs  75,060 crore.  The number of wheat growing farmers who were benefited increased in 2020-21 to 43.36 lakh as compared to 35.57 lakh in 2019-20.
For paddy, the amount paid in 2013-14 was Rs 63,928 crore. In 2019-2020, this increased Rs 1,41,930 crore. This is further estimated to increase to Rs 172,752 crore in 2020-2021. The number of farmers benefitted increased from 1.24 crore in 2019-20 to 1.54 crore in 2020-21. In the case of pulses, the amount paid in 2013-2014 was Rs 236 crore. In 2019-20 it increased Rs 8,285 crore. It is at Rs 10,530 crore in 2020-21, a hike of  40 times since 2013-14.
The payments to cotton farmers under MSP had seen an increase from Rs 90 crore in 2013-14 to Rs 25,974 crore (as on January 27, 2021).
More than 1,000 new mandis would be integrated with e-NAM (National Agricultural Market). Around 1.68 crore farmers are currently registered with e-NAM. So far, Rs 1.14 lakh crore of trade value has been carried out through e-NAMs.
At the risk of being seen as adopting  protectionist measures, Sitharaman, in her Budget 2021-2022 speech, said the government will impose an Agriculture Infrastructure and Development Cess (AIDC) on specified goods — including alcoholic beverages, gold, silver, cotton, peas, apple, petrol, and diesel.
Agricultural infrastructure cess of 100 per cent has been proposed on alcoholic beverages, while on gold and silver, it’s 2.5 per cent.
On apples, it’s 35 per cent, while on cotton it’s 5 per cent. The idea is to make the imports of these items prohibitive in terms of cost while benefiting local farmers who are engaged in cotton, oil seed cultivation and horticulture. “To benefit farmers, we are raising customs duty on cotton from nil to 10 per cent and on raw silk and silk yarn from 10 per cent to 15 per cent. We are also withdrawing end-use based concessions on denatured ethyl alcohol. Currently, rates are being uniformly calibrated to 15 per cent on items like maize bran, rice bran oil cake, and animal feed additives,” a statement by the government said.
It was not surprising that the four-poll bound states of Assam, Tamil Nadu, Kerala and West Bengal found special mention as Sitharaman announced several measures to augment the road infrastructure.

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