Budget 2018: ‘Agriculture still key focus’

The budget comes at a time when India has recorded its slowest GDP growth rate in the last four years, and thus proving Dr Singh right. The rate is also below the historical 30-year average rate. However, the outlook looks bright for India amidst a sluggish world economy. The IMF pegs India’s rate for calendar 2018 at 7.8 per cent, the highest amongst world economies, while the global forecast is 3.9%. We will be growing at twice the world’s rate. So what should Mr Jaitley do?

India should improve its performance in agriculture what with farm production being the most important reason for India’s slow growth. The government is announcing the Contract Farming Law, which is expected to make the industry more competitive. It should also allocate funds for Options Trading for farmers. Legislation for agglomeration of land holdings across the country is a matter whose time has come if we wish to corporatise agriculture.

Jaitley has said agriculture sector was the top priority of his Government. We will wait and watch if actions meet words. There are a couple of challenges, which we need to address.

Storage and supply is the way forward. It requires enormous capital investment and can be possible only through PPP like it happened with our roads. There is an urgent need to relax norms for active assistance if the government means business.

Also, farmers are not getting the price for their produce. An early implementation of Minimum Guarantee Price across India will help. Futures pricing fund allocation and advancement of the technology platform towards it are the keys to success.

India’s Tax to GDP ratio is the lowest amongst Emerging Market Economies (EME) and the OECD.

The government with the introduction of GST and other stricter surveillance measures on tax collection expects both direct and indirect tax collection to grow up and projects it to be at 11.6% in 2018-19 and 11.9% in 2019-20.