Ahead of the presentation of the interim Budget on 1 February, experts indicate that one of biggest challenges the ruling Bharatiya Janata Party faces right now is the agricultural crisis.
Speaking to BloombergQuint, Head of Emerging Market Economics at JP Mogran, Jahangir Aziz implied that while raising support prices for key crops or waiving farm loans brings short-term relief to the aggrieved farmers, “future farm support schemes such as cash transfers will put pressure on fiscal consolidation.”
A BloombergQuint report published on 21 January stated that is considering a plan to transfer cash to farmers to ease their financial burden instead of offering subsidies. Aziz further added that in order to roll out a cash-transfer related scheme, the government needs to subsume existing subsidies to make it “palatable.”
“Therefore, it is imperative that India should focus on agriculture as a single item in the agenda,” Aziz added.
He added,
“Every time the arguments are exactly the same, which is that we understand there are medium-term structural changes needed but those will take a long time. However, we need immediate relief for the farming community because it is hurting. The same argument will be used again... This time there could be some kind of income transfer rather than high MSPs because they have tried that in past and it didn’t work.”
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