Tuesday, March 2, 2010

Agriculture in Union Budget

The share of allocations towards Agriculture and Allied Activities as a proportion of the total Union Budget and the GDP during 2010-11 (BE) is 9.45 percent and 1.56 percent respectively. In the current budget there has been a substantial decline in the share of Agriculture and Allied Activities from the total Union Budget as well as from the GDP compared to the allocations in budget 2008-09 Actuals and 2009-10 RE.
• Union Government’s expenditure on Rural Economy as a proportion of GDP has also declined from 3.34
per cent in 2008-09 (Actuals) to 2.59 per cent in 2010-11 (BE).
• Since 2005-06, a decline in the share of Agriculture and Allied Activities sector in central plan allocation
has been observed, which indicates that the priority accorded to this sector has been on the decline.
• During 2004-05 around 99.5 per cent of the total expenditure for Agriculture and Allied Activities was on
revenue account, and even in 2010-11, the share of revenue expenditure constituted 99.7 per cent of
the total expenditure in this sector.
• Although the responsibility for financing Irrigation and Flood Control measures lies more with the State
Governments, Union Government’s budgetary allocation towards this sector seems to have been far
from satisfactory.
• Allocation towards Agricultural Research and Education do not indicate a positive trend.
• There is a gross mismatch between the allocations towards the Agriculture and Allied Activities Sector,proposed in the Eleventh Five Year Plan and the budgetary allocations towards the same in the Union Budget 2010-11.
Negative growth rates observed in the Agriculture sector Following an average growth of over 3.8 % per annum over the four years from 2005-06 to 2008-09,
the Agriculture and Allied Activities sector witnessed a growth rate, i.e. -0.2 % during the year 2009-10.
The share of this sector (Agriculture and Allied Activity, at constant prices 2004-05) in the country’s GDP has consistently been declining over the years and it reached 15.7 % during 2008-09, compared to the previous year’s share of 16.4 % A slight improvement has been noticed in the Gross Capital Formation (GCF) in Agriculture, as a proportion to the total GDP as well as agricultural GDP. However,
the share of GCF in agriculture to the total GDP hovers around 3 % over the period from 2004-05 to 2008-09.

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