Agriculture has not been doing well. In the latest Economic Survey, it has been pointed out that the estimated growth rate of agriculture is only 2.1 per cent for the year 2017-18. Agriculture is the biggest source of livelihood and employment in this country. As it was expected, the government did focus on rural and agriculture sector in this budget.
Agriculture is a state subject in India and the role of the Central government is limited. Given this constraint, this years budget has put significant focus on the rural sector. In a major move, finance minister Arun Jaitley has increased the Minimum support Price (MSP) to 1.5 times the cost of production of the eligible crops.
This is a good move but its effectiveness will only be maximised if procurements are made in an unbiased and comprehensive manner. Mr Jaitley proposed setting up supporting institutions to make farmers aware about possible price movements in the agricultural markets. This is a good move and can help farmers cope with high price volatilities associated with the farm sector.