With Corona hitting the world physically, mentally, economically, governments of every country are trying to bring back the normal days. India has always taken the front lead whether it is imposing lockdown to safeguard the nation or to inject liquidity boosters in the economy.
India- the developing economy is showcasing its strength and intelligence and based on its preemptive measures towards Covid-19, getting admirations from the developed economies. Setting benchmarks for the world, India has successfully prevented itself from the worst effects of Corona. The decreasing death rate and the increasing recovery rate are a proof of the government’s and COVID Warriors’ sleepless efforts.
Corona and Economy
As per the International Monetary Fund, global economy will shrink by 3% this year. Many developed economies are entering recession. Unemployment numbers are increasing at a fast pace. The lockdowns have strictly affected the production and supply chains of various industrial sectors. There is seen a detrimental effect on cash flows in the market. Whether big or small, every sector has got to taste the hammer.
Impact on Indian Economy
India also isn’t untouched of this epidemic turned economic pandemic. Through the peaks and valleys, Indian Stock Markets witnessed their worst losses in history on 23rd March 2020, while Sensex & Nifty posted their biggest gains on 25th March 2020.
The Indian Economy witnessed 14 Crore Indians losing employment. Tourism Industry, Events Industry, Hotel Industry, Food Industry majorly saw setbacks, while there are many more in the list. Startups couldn’t take a start and salaries got a pull but downwards. Yes, the GDP is expecting negative growth but the Spirit of India is totally positive.
The Indian Economy Boosters for Rural India
While the Government instantly backed up the economy by introducing various relief measures for the poor for around Rs.1,70,000 crore. Also the RBI infused liquidity by providing a financial aid of Rs.3,74,000 crore to the system.
While the lockdown kept extending, Government of India kept enhancing the relief measures to soothe financial crisis among the poor. Agriculture sector occupying more than 50% of the population of India got the support pitch for sustainability as well. India’s GDP being largely dependent on Agriculture, this sector needs to be retained first.
To support agriculture sector, the Centre made minimum support price (MSP) purchases of ₹73,300 crore during the two months of lockdown. An amount of ₹18,700 crore has been successfully dispensed in cash, under PM Kisan Fund transfers. Close to ₹6,400 crore have been paid as crop insurance under the scheme.
The demand of milk significantly reduced by 20-25% during lockdown. 560 Lakh ltr per day was procured by cooperatives and a total 111 crore ltr extra was procured ensuring payment of Rs. 4100 Cr.
Strengthening the pillars of Agri economy, recently Government announced a 20 Lac Crore fiscal stimulus package under Atmanirbhar Bharat Abhiyan that would provide relief to various sectors. In its third tranche, FM Nirmala Sitharaman shared the breakup of 1,50,000 crore dedicated towards infrastructure and building capacities in agriculture and allied activities. This was meant to strengthen management of post-harvest and setting up the cold chains, to fill the gaps in the value chains.
In all around, 3 crore marginal farmers already availed the benefits of Rs.4 lakh crore loans on concessional rates.
Breakup of the third tranche
The third tranche of the measures worth Rs. 1.5 lakh crore focused on the agriculture and allied sectors including dairy, animal husbandry and fisheries as the government announced steps to strengthen the overall farm sector in rural India.
- The Central government announced an immediate creation of fund of Rs.1 lakh crore to financially encourage agriculture infrastructure projects at farm-gate and aggregation points. The funds target to benefit primary agricultural cooperative societies, farmers producers organisations (FPOs), agriculture entrepreneurs and startups.
- Cluster based approach will be followed to make local value-added products reach the global markets. For the same, Rs. 10,000 crore will be released to formalize micro food enterprises.
- Boosting the fishery segment, Rs. 20,000 Crores will be allocated to fishermen under PM Matsya Sampadana Yojana. Also various relaxations in registrations and validity periods were granted extensions. This budget is expected to support employment to over 55 lakh persons and double the exports to Rs. 1 lakh crore.
- There is a plan to allocate the package of Rs 2 lakh crore to farmers through Kisan credit cards. On the other hand, 2.5 crore farmers, including fishermen and animal husbandry farmers, will be benefitted with institutional credit at a concessional rate.
- The beekeeping segment has been assigned Rs.500 Crores. This is supposed to increase the income of around 2 lakh beekeepers.
- An additional refinance support of Rs.30,000 Crores, was boosted up by NABARD, for Crop Loan Requirement. This was targeted to benefit around 3 crore farmers(small and marginal) in rural India.
- Dairy Cooperatives were provided with an interest subvention at the rate of 2% p.a. for year 20-21. Also an additional 2% p.a. interest subvention was facilitated on prompt payments. This infused 5000 Cr additional liquidity, benefiting 2 Crore farmers.
- 100% vaccination ensured by allocation a fund of Rs. 13,343 Crore for cattle, buffalo, pig, sheep, goat against various FM Diseases and for brucellosis.
- Animal Husbandry Infrastructure Development Funds of Rs.15000 Crore was set up.
- Promoting herbal cultivation, 10 Lakh hectares of land will be covered in the next 2 years and an amount of Rs. 4000 Crore will be outlaid for the same. This will also direct the farmers towards income generation of Rs. 5000 Crore. Also around 800 hectare area will be developed along the banks of Ganga as a corridor of medicinal plants.
- A scheme of Rs.500 Crore would provide 50% subsidy on transportation and equally on storage to prevent supply chain disruptions and fall in prices of fruits and vegetables. Barrier free Inter-State Trade also was facilitated to provide better marketing choices to farmers.
- For assuring better price for quality agriculture produce, facilitative legal framework was created to ensure that farmers engage with processors, aggregators, large retailers, exporters etc. in a fair and transparent way.
At a glance, the government is pulling the agri economy to sustain and regain itself. India being a land of agriculture, will definitely come back if this agri industry is kept strong. Although the amount seems to be collectively huge but individually it will only provide basic help to farmers. But as it says, every drop counts, so positivity and hope should not be left behind. Let’s rise and shine back together!