Vol. XLI No. 07 February 12, 2017

Union Budget 2017-18: A Betrayal of the Peasantry

THE union budget presented by the finance minister in days of acute agrarian crisis compounded by the adverse impact of demonetisation on agriculture is a betrayal of the peasantry. The disruptive consequences of demonetisation has led to a further fall in incomes, threatened agricultural production and created uncertainty about any revival of agricultural growth. The All India Kisan Sabha, in a statement issued on February 7, has condemned the insensitive and inhuman attitude of the BJP-led government towards the suffering of the peasants and agricultural workers as well as the toiling masses. Ironically, the budget has been presented with great hype by the finance minister and corporate media as a pro-farmer budget that will give a boost to agriculture while actually working to the detriment of farmers and agricultural workers.


The BJP government has gone back on its promise of ensuring Minimum Support Price (MSP) for crops according to the recommendations of the Swaminathan Commission ie, at least 50 percent above cost of production. MSP of most crops are far below even the cost of production. If we take arhar/tur the MSP announced is Rs 5050/Qtl. The costs of production according to state governments were Rs 5722/Qtl in AP, Rs 6841/Qtl in Telangana and Rs 5,100/Qtl in Karnataka. Farmers are not even getting Rs 4,500/Qtl as there is no effective procurement. The government however has assured MSP along with seeds and technical knowhow and also agreed to bear transport costs from farmers in Mozambique while refusing to pay Indian farmers. Similarly the decision to import wheat at zero import duty is leading to dumping of wheat at rates ranging from Rs 1329/Qtl to Rs 1431/Qtl which is far below even the MSP which will be Rs 1625/Qtl. This will lead to a further crash in prices as the incompetent government has no effective procurement plans. The talk of price stabilisation fund and protection of interests of the farmers with remunerative prices have been dumped.


On the MGNREGS, the BJP government claims that it has allocated a record Rs 48,000 crores. The budgeted rise in allocation for MGNREGS is just 1.1 percent. Actually this is only around Rs 500 crores over the revised expenditure of 2016-17. The increase over the 2016-17 (BE) was arrived at due to the intervention of the Supreme Court. However, the actual requirement for the programme is estimated to be over Rs 80,000 crores. Huge arrears of wages for work done remain unpaid and is according to reports around Rs 14,000 crores. The centre is systematically dismantling this programme and starving it of funds in a deliberate manner. While fertiliser prices are sharply rising, fertiliser subsidy stands still at Rs 70,000 crore in 2016-17(RE) and 2017-18(BE).


The budget announced micro irrigation fund with initial corpus of Rs 5000 crore and enhancement of long term irrigation corpus from the existing corpus of Rs 20,000 crore by Rs 20,000 crore to Rs 40,000 crore. The finance minister has not explained the funds invested and the irrigational infrastructure developed during the last financial year. It is notable that the 11th Five Year Plan had set aside Rs 67,477 crore for irrigating 9.4 million hectares. When we consider the fact that 47 million hectares of cultivable land is unirrigated, the present allocation will not even mean Rs 10,000 per hectare. On the Pradhan Mantri Fazal Bima Yojana while claiming to increase its cover to 40 percent of the farmers the allocation has been cut by Rs 4,240 crores from Rs 13,240 crores last year to merely Rs 9000 crores. Even this allocation has overwhelmingly gone to pay private insurance companies rather than to the benefit of farmers. It has through the demonetisation and ban on currency exchange imposed for cooperative banks crippled the widest network for disbursal of rural credit. The much hyped Rs 10 lakh crores of agricultural credit is misleading and instead of announcing a loan waiver for the distressed farmers the BJP government is merely playing with words. Most of this credit goes to agribusinesses and to urban areas and is in no way addressing credit needs of poor, landless farmers and agricultural workers.


AIKS calls upon its units to expose the lies of the BJP government and rise up in protest against the anti-peasant union budget.