Government plans $19 billion fertilizer subsidy in Union Budget FY23
India is likely to earmark nearly $19 billion in the Union Budget 2022 to compensate fertilizer companies for selling their products to farmers at lower than market prices, according to people with knowledge of the matter.
The finance ministry has penciled in Rs 1.4 lakh crore ($18.8 billion) as fertilizer subsidy in the budget due February 1, up from Rs 1.3 lakh crore in the year ending March 31, due to higher raw material costs, the people said, asking not to be identified as the information is not public. Discussions are still going on and a final decision is yet to be taken.
The increased spending comes ahead of crucial local polls and amid efforts by the ruling Bhartiya Janata Party to win over farmers after facing massive protests against new laws that have since been scrapped. Nearly 60% percent of India’s 1.4 billion population depends on farming directly or indirectly for their livelihood and their support is key for winning elections.
India needs Green Revolution 2.0 to make agri more climate-resistant, sustainable: RBI
India needs a second green revolution along with the next generation of reforms with a view to make agriculture more climate-resistant and environmentally sustainable, said an RBI article on farm sector challenges. Observing that Indian agriculture has exhibited remarkable resilience during the COVID-19 period, the article said “new emerging challenges warrant a second green revolution along with next-generation reforms”.
Despite the success in terms of production that has ensured food security in the country, food inflation and its volatility remain a challenge, which requires supply-side interventions such as higher public investment, storage infrastructure and promotion of food processing, said the article titled ‘Indian Agriculture: Achievements and Challenges’.
The article said Indian agriculture scaled new heights with record production of various foodgrains, commercial and horticultural crops, exhibiting resilience and ensuring food security during the COVID-19 period.
Sops in Budget 2022 for agri value addition on cards
The government is drawing up a plan to incentivise value addition in agriculture that can boost farmers’ incomes, as it looks to ensure development of the sector even after the withdrawal of farm laws late last year.
The broad thrust of the strategy is to encourage backward linkages to the farm, officials said. The details are expected to be announced in the February 1 budget.
“The whole idea is to provide support for investments to promote value addition and backward linkages,” a government official said.