Budget 2024 can sow inclusive growth for farmers & women to get a vibrant Bharat

Padmanand V,
Kunal Sood
insight featured image

The union budget speech by the Hon. Minister of Finance in the previous year started off with emphasis on the economic empowerment of women. This was to be through developing the lakhs of SHGs in the country into viable income generating producer organisations and economically sustainable women enterprises. The budget also accorded renewed emphasis on enhancing the incomes of the largely small and marginal farmers of the country. Also Read: Nari-shakti may drive Bharat's moment in the world order These targets and priorities are in sync with the circumstance and needs of the stakeholder categories who constitute much of the Indian populace.

Budget boost for economic empowerment of women There are over 8 crore women networks as SHGs in India. This is the largest such network in the world. These networks have largely facilitated financial inclusion, and not facilitated self-employment nor entrepreneurship as a source of income to the extent desired. The government of India is now visualising the evolution of “Lakhpati Mahila’s” from these networks.

In this context, there is need to help these women SHGs to graduate into larger value chain focused and viable producer organisations and women enterprises undertaking a range of business activities. This will also ensure that the over about INR 7.68 Lakh Crore (as of November, 2023) of present outstandings in such SHG networks is a safe bet.

These potential business activities may be visualised in terms of input and output marketing as well as small value adding facilities in rural areas in the farm sector. There are also a wide gamut of services and manufacturing options in the non-farm sector.

Grant Thornton Bharat has pioneered successful models involved in over about 100 thousand women folks across the country. These models may be budgeted for, and upscaled and emulated.

Budget fertiliser for incomes for small and marginal farmers in the country

The vast majority of the 14 crore farmers in the country sustain themselves on marginal and small holdings of less has 5 acres each. In fact, the majority of Indian farmers are dependent on operational holdings of barely 0.8 hectares each. This size of operation is typically not feasible for viable agricultural activity.

The aggregation of farmers into FPOs with strong fiscal and budgetary support is also expected to contribute towards the government’s agenda of “Doubling Farmers Income”. This is a more sustainable and fiscally viable option rather than nearly enhancing the cap on MSPs to farmers for different commodities.

Scale economies and increase bargaining power read by these networks are contributing towards enhanced farm incomes across the country.

However, to ensure more widespread impact, enhanced fiscal outlays are required. The INR 58 Lakhs presently expended per FPO in typical state and central government schemes supporting the 20,000 odd already established farmer producer companies need be expanded to at least INR 80 Crore per FPO. In fact, many multilateral and donor funded FPO related interventions offer fiscal support of even beyond INR 80 Lakh/FPO. Furthermore, successful models’ technical tools demonstrated and developed by Grant Thornton Bharat LLP benefiting lakhs of farmers in pockets across the country may also be emulated and replicated countrywide.

Basically, quality technical assistance with reasonable budgetary provision will help the government realise its vision of economically empowered women folk, as well as sustainably income-augmented farmers across the Nation.

This article first appeared in The Economic Times on 29 January 2024.

Decoding the indirect tax tapestry: Unwrapping key expectations from Interim Budget 2024
Next article

Decoding the indirect tax tapestry: Unwrapping key expectations from Interim Budget 2024

Read this article