Key points from the Union Budget 2023-24 for the Agricultural sector in India

with Drishti Vishwanath

• The Union Budget 2023-24 enlarges the vision for Amrit Kaal proposed in the budget 2022-23, wherein a technology driven and knowledge-based economy is promoted with 7 priorities: inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and the financial sector.
• The focus on infrastructure development (both physical and digital) continues.

Agriculture in the Inclusive Development Tenet/ Priority

• Digital public infrastructure for agriculture will be built as an open source, open standard and inter operable public good. This will enable inclusive, farmer-centric solutions through relevant information services for crop planning and health, improved access to farm inputs, credit, and insurance, help for crop estimation, market intelligence, and support for growth of agri-tech industry and start-ups.
• An Agriculture Accelerator Fund will be set-up to encourage agristartups by young entrepreneurs in rural areas. The Fund will aim at bringing innovative and affordable solutions for challenges faced by farmers. It will also bring in modern technologies to transform agricultural practices, increase productivity and profitability.
• A cluster-based and value chain approach will be adopted through Public Private Partnerships (PPP) to enhance productivity of the cotton crop
• An Atmanirbhar Clean Plant Program will be launched to boost availability of disease-free, quality planting material for high value horticultural crops at an outlay of Rs 2,200 crore
• Making India a global hub for millets– the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.
• The agriculture credit target will be increased to ` 20 lakh crore (an increase of 11 percent) with focus on animal husbandry, dairy and fisheries
• Boost to the Fishery Sector: new sub-scheme of PM Matsya Sampada Yojana with targeted investment of Rs 6,000 crore to further enable activities of fishermen, fish vendors, and micro & small enterprises, improve value chain efficiencies, and expand the market
• Promotion of Co-operative based economic development : A new Ministry of Cooperation was formed with a mandate to realise the vision of ‘Sahakar Se Samriddhi’. To realise this vision, the government has already initiated computerisation of 63,000 Primary Agricultural Credit Societies (PACS) with an investment of ` 2,516 crore. In consultation with all stakeholders and states, model bye-laws for PACS were formulated enabling them to become multipurpose PACS. A national cooperative database is being prepared for country-wide mapping of cooperative societies
• Setting up of Decentralised Storage Capacity: This will help farmers store their produce and realize remunerative prices through sale at appropriate times. The government will also facilitate setting up of a large number of multipurpose  cooperative societies, primary fishery societies and dairy cooperative societies in uncovered panchayats and villages in the next 5 years

Agriculture in the ‘Reaching the Last Mile’ Priority

• In the drought prone central region of Karnataka, central assistance of ` 5,300 crore will be given to Upper Bhadra Project to provide sustainable micro irrigation and filling up of surface tanks for drinking water.

Agriculture in the ‘Infrastructure and Investment’ Priority

• One hundred critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified. They will be taken up on priority with investment of ` 75,000 crore, including ` 15,000 crore from private sources

• The Union Budget continues to demonstrate a strong commitment to boost economic growth by investment in infrastructure development; there has been a 37.4 percent increase in capital expenditure over the revised estimates 2022-23.

Agriculture in the ‘Unleashing the Potential’ Priority

• Galvanise an effective AI ecosystem and nurture quality human resources in the field: For realizing the vision of “Make AI in India and Make AI work for India”, three centres of excellence for Artificial Intelligence will be set-up in top educational institutions to facilitate cutting edge applications and scalable problem solutions in agriculture, health, sustainable cities.
• One hundred labs for developing applications using 5G services will be set up in engineering institutions to realise a new range of opportunities, business models, and employment potential- applications such as precision farming.

Agriculture in the ‘Green Growth’  Priority

• Launch of PM-PRANAM: PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” will be launched to incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers

• Setting up of Bhartiya Prakritik Kheti Bio-Input Resource Centres: Over the next 3 years, we will facilitate 1 crore farmers to adopt natural farming. For this, 10,000 Bio-Input Resource Centres will be set-up, creating a national-level distributed micro-fertilizer and pesticide manufacturing network.

Allocated Expenditure: Analysis

• The total expenditure in the budget 2023-24 is estimated at INR 4503097 crore; out of this, the total expenditure of agriculture and allied activities (including PM-KISAN) has been estimated at 144214 crore.

• Agriculture and allied activities (including PM-KISAN) have been allocated 3.20 percent of the total allocation in the Union Budget 2023-24; this is almost similar to the revised estimates of 2022-23 wherein agriculture and allied activities constituted 3.25 percent of the budget. This is a decrease from the budget estimates of 2022-23, wherein agriculture and allied activities constituted 3.8 percent of the budget.

• The Ministry of Agriculture and Farmers Welfare has been allocated 2.8 percent of the total expenditure in the Union Budget 2023-24; this marks a decrease from 3.3 percent of the total expenditure in the Union Budget 2022-23. Over the last 2 decades, the allocation to the Ministry of Agriculture and Farmers Welfare has remained below 5 percent; maximum being in 2019-20, after which the allocation has fallen as a proportion of totl expenditure to all ministries (see Figure 1)

Figure 1: Proportion of Total Expenditure Allocated to Ministry of Agriculture and Farmers Welfare (%), 2004-05 to 2023-24

Note: Budget Estimates for all years have been considered.

Source: Expenditure Profile, Union Budgets 2004-05 to 2023-24

• PM-KISAN constitutes 60.61 percent of the allocation to central sector schemes/projects within the Department of Agriculture and Farmers Welfare, and 52 percent of the total expenditure of the  Department of Agriculture and Farmers Welfare. In 2022-23 BE it constituted 55 percent of the total expenditure. The scheme has been allocated the same amount as the 2022-23 revised estimates; 60000 crore; this marks a decrease of 11.76 from the budgeted allocation in 2022-23 (68000 crore)

Figure 2: Budget Estimates for Expenditure on Major Items, 2023-24 in Comparison with Revised Estimates, 2022-23

Source: Expenditure Profile, Union Budget 2023-24

• PM-KISAN constitutes 48 percent of the expenditure of the Ministry; this is almost equal to the expenditure as per the revised estimates in 2022-23 (50 percent) (see Figure 3 for trends since 2014-15)

Figure 3: Expenditure of the Ministry (Total and PM-KISAN)

Source: Expenditure Profile, Union Budget 2014-15-2023-24

• Within the 2 departments of the Ministry, Department of Agriculture and Farmers Welfare has been allocated 92.4 percent of the allocation to the Ministry in 2023-24, while the Department of Agricultural Research and Education has received 7.6 percent of the allocation.

• The Department of Agriculture and Farmers Welfare has been allocated 115531.79 crores, marking an increase of 4.8 percent from the budget allocation in 2022-23, and a decrease of 6.8 percent from the revised estimates of 2022-23.

• In the Department of Agriculture and Farmers Welfare, there has been no change in the allocation to central sector schemes/ projects in comparison to the budget estimates of 2022-23; the allocation still remains 85 percent. 

• Percent of the Ministry’s budget is spent on three schemes under the Department of Agriculture and Farmers Welfare;

Source: Expenditure Budget, Union Budget 2023-24

• The Department of Agricultural Research and Education has been allocated 9504 crores in the Union budget 2023-24, marking an increase of 11.62 percent from the budget estimates in 2022-23, and an increase of 9.76 percent from the revised estimates of 2022-23.

• In the Department of Agricultural Research and Education, there is an increased allocation to central sector schemes/ projects by 3 percent, as compared to the budget estimates 2022-23.

Source: Expenditure Budget, Union Budget 2023-24

Table 1: Key Schemes -A Comparison of BE 2022-23, RE 2022-23 and BE 2023-24

Central Sector Schemes/Projects
Department of Agriculture and Farmers Welfare	Name of Scheme	Budget Estimates 2022-23	Revised Estimates 2022-23	Budget Estimates 2023-24	% Change in Allocation from Revised Estimates 2022-23
	Pradhan Mantri Fasal Bima Yojana	15500.00	12375.76	13625.00	10.10
	Distribution of Pulses to State / Union Territories for Welfare Schemes	9	166.21	800.00	381.31
	Pradhan Mantri Kisan Samman Nidhi (PM-Kisan)	68000.00	60000.00	60000.00	No change
	Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)	500.00	955.00	955.00	No change
	Agriculture Infrastructure Fund (AIF)	500.00	150.00	500.00	233.33
	Market Intervention Scheme and Price Support Scheme (MIS-PSS)	1500.00	1500.00	0.01	-99
	Pradhan Mantri Annadata Aay Sanrakshan Yojna (PM-AASHA)	1.00	–	0.01	–
Department of Agricultural Research and Education	Agricultural Extension	243.72	243.72	327.00	34.56
	Management of Natural Resources*	185.77	185.77	240.00	29.19
	Agricultural Education	1995.83	1995.61	2423.41	21.87

Source: Expenditure Budget, Union Budget 2023-24

Note:  Management of Natural Resources includes Natural Resource Management Institutes including Agro Forestry Research and the Climate Resilient Agriculture Initiative. The Climate Resilient Agriculture Initiative will be merged with the Natural Resource Management Institutes including Agro Forestry Research scheme with effect from financial year 2023-24.

• Observations: Under the Market Intervention Scheme and Price Support Scheme (MIS-PSS), NAFED, Central Warehousing Corporation, National Consumer Cooperative Federation of India and Small Farmers Agro Business Consortium have been designated as Central agencies to undertake procurement of Oilseed and Pulses under price support scheme and also work to provide remunerative prices to farmers for their produce. Pradhan Mantri Annadata Aay Sanrakshan Abhiyaan (PM-AASHA) is a scheme to ensure minimum support price to farmers comprising of Price Support Scheme (PSS), oilseeds and copra. The allocations for these have been slashed considerably.

Centrally Sponsored Schemes
Department of Agriculture and Farmers Welfare	Name of Scheme	Budget Estimates 2022-23	Revised Estimates 2022-23	Budget Estimates 2023-24	% Change in Allocation from Revised Estimates 2022-23
	Rashtriya Krishi Vikas Yojna	10433.00	7000.00	7150.35	2.14
	Krishionnati Yojana	7183.00	5000.00	7066.47	41.32

Source: Expenditure Budget, Union Budget 2023-24