Our Indian Economy despite having many industries and factories and many technological advancements is considered an Agrarian Economy. In such an economy the farmers who play the vital role are helped by the Government through various subsidies. Majority of these subsidies are for Irrigation, Power supply, Provision of fertilisers, Plant varieties, etc. The Indian government is now considering a plan to club all these subsidies into one and pay the farmers in cash.
Transfer of cash to the farmers instead of offering such varied subsidies is what the plan is in the making. The fertilise cost subsidies, good quality plant seed subsidy etc., are made to combine and the farmers are to be paid in cash. These discussions of such plans are still not official, and hence the ones who have spoken about it did not want to disclose their identities.
Cancelling the discounts and equipping the farmers with extra money to cope with the prices will attract an additional cost o0f Rs70,000 Crore per year, form the already deficit budget. The present budget session, that will end in the month of March 31st, 2019 already has made the required allocation to the farm subsidies.
Finance Minister of India, Mr Arun Jaitley has made the budgetary allocation of Rs 70,100 Crore dedicated only for the Farm Subsidies for the 2018-2019 Financial Year. The government which has exceeded its budget aim of the year only has a little space to spend on this move.
The GST exemptions which were made prior to the General Elections had over consumed the budget as of now, and any further allocations must be thought of very keenly. Even though this additional budget is allocated it would not affect the present fiscal year and the nation’s fiscal deficit.
There was a thorough forecast about the GDP Goal of India for this year, and we are going to miss it for this Fiscal year too. There would be a deficit of about 3.3% of the Gross Domestic Product, as the government aiming for the second term had declared some population favoured schemes.
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