In the past decade, there has been a significant decline in public expenditure on agriculture in India, according to a research paper presented by the Foundation for Agrarian Studies (FAS) based in Bengaluru. The study, conducted with the support of the Rosa-Luxemburg-Stiftung and led by Professor R Ramakumar from the Tata Institute of Social Sciences, along with co-investigators Raya Das and Abhinav Surya, analyzed Union and state government budgets from 2011-12 to 2018-19.
The findings reveal a considerable reduction in government expenditure on agriculture as a share of gross value added in the agricultural sector. While the share of the Centre in total agricultural expenditure decreased, there was a simultaneous increase in the share of expenditure by state governments. The study highlights a sharp decline in government spending on crop cultivation and food production, with a shift towards increased expenditure on agricultural financial institutions through credit disbursement and interest subsidies.
The overall government expenditure on irrigation as a share of total public expenditure has also declined over the last decade. The study indicates a shift in public expenditure away from direct production support towards income support and credit-based assistance in agriculture.
Historically, India’s agricultural growth relied on public sector investments, such as the green revolution, which led to increased production and productivity with state support in technology, prices, credit, and marketing. However, the study suggests a withdrawal of the state from these areas since the 1990s. Despite the emphasis on sustainable farming, the study reveals that government spending on sustainable agriculture has remained stagnant.
Professor Ramakumar emphasizes the need for increased public spending in Indian agriculture, pointing out that the country’s public expenditure to GDP ratio is among the lowest globally. He advocates for direct cash transfers, considering the low overall public expenditure in India, not only in agriculture but also in education and health.
Vijoo Krishnan, Joint Secretary of the All India Kisan Sabha, discusses the implications of reduced government spending on the farming population, particularly small farmers and women in agriculture. He criticizes the shift of the expenditure burden to the states, describing it as an attack on federal values.
The panel discussion delves into the consequences of declining government spending on agriculture, including the pauperization of small and marginal farmers, increased debt, and suicides. Krishnan expresses disappointment with the Modi-led government, stating that despite promises to double farmers’ incomes and implement recommendations, these commitments remain unfulfilled.
The discussion also addresses the role of women in agriculture, with S Niyati from the International Rice Research Institute emphasizing the undercounting of women’s work despite their increasing involvement in cultivation and wage labor. Niyati highlights the importance of government spending on schemes like MGNREGA and agricultural research and extension for improving the incomes of rural women.