Budget 2020: 2.83 lakh Crore Rupees allocated to Agriculture and Rural Development

The Finance Minister Nirmala Sitaraman presented the Budget 2020-21 on February 1, 2020. The Minister has allocated Rs 2.83 lakh crore rupees for the agriculture and rural development sector.

The Government aims to liberalize farm markets, remove distortions in livestock and farm markets and increase agricultural investments. It also focuses to increase purchase of farm produce and related services. The Budget presents 16 action points in its budget to achieve the above aims in AGRICULTURE SECTOR.

POINT 1 — Encourage State Governments to implement Model Laws

The Budget aims to encourage the state governments to implement the following model laws

  • Model Agricultural Land Leasing Act, 2016
  • Model Agricultural Produce and Livestock Marketing Act, 2017
  • Model Agricultural Produce and Livestock Contract Farming and Services promotion and Facilitation act, 2018.

POINT 2 — Comprehensive Measures for 100 Water Stressed Districts

POINT 3 — Help 20 lakh farmers setup standalone solar pumps

In the previous budget, the government aimed to reduce the dependence of farmers on diesel or petrol water pumps through PM-KUSUM. It aimed to increase the usage of grid connected solar water pumps.

This budget will help farmers set up standalone solar pumps. The surplus of the standalone power will act as an income to the farmer. It shall also help another 15 lakh farmers solarize their grid connected pump sets.

A scheme is to be introduced to operationalize the barren lands of farmers with the solarization of water pumps.

POINT 4 — Reducing incentives to chemical fertilizers & promoting organic

The budget aims to encourage the use of organic and chemical free fertilizers. This is to change the current set up of incentivized use of chemical fertilizers.

POINT 5 — NABARD to Geo Tag and map warehouses

At present, India has capacity of 162 million metric tonnes of storage and warehousing. With an allocated budget, NABARD will map and Geo Tag these warehouses.

Viability Gap funding is to be provided to create new warehouses in line with WDRA (Warehousing Development and Regulatory Authority).

POINT 6 — Village Storage Scheme

The village storage scheme is to be proposed. The storage houses will be run by the SHG (Self Help Group). Importance under the scheme will be given to the Women SHGs. Under the scheme, the group will get loan from NABARD to store food grains. This will help farmers to increase their holding capacities.

POINT 7 — Kisan Rail under PPP model launched

Also, Indian Railways will set up Kisan Rail to transport perishable goods under the PPP (Public Private Partnership) model. New refrigerated freight trains will be launched. This will help to build seamless national cold supply chain for perishables such as meat, milk and fish.

POINT 8 — Krishi UDAN to be launched

Apart from trains the government also aims at launching air transport. The Ministry of Civil Aviation will operate new flights to fulfil transport of perishable goods. This will immensely help the north east and tribal districts.

POINT 9 — One District One Product extended to Horticulture

The current produce of Horticulture sector is 311 million Metric tonnes. According to the Ministry of Finance, the horticultural produce exceeds the production of food grains. The budget aims to support states that are willing to adopt the cluster basis focus on “One District One Product” programme.

POINT 10 — Integrated Farming systems in Rain fed areas to be expanded

Multi-tear cropping, Bee keeping, solar pumps, solar energy production in non-cropping season are to be added. The Jaivik Kheti (National Project on Organic Farming) is to be strengthened. It is a portal for online organic products.

POINT 11 — NWR integrated with ENAM

The financing of Negotiable Warehouse Receipts (NWR) has already crossed 6,000 crores. Therefore, the e-NWR is now to be integrated with ENAM (Electronic National Agriculture Market)

POINT 12 — 15 lakh crore agricultural credit

The Non-Banking Finance companies and the agricultural cooperative play a major role in agricultural development. The NABARD refinancing the agricultural credit will receive 15 lakh crore for the year 2020-21.

Agriculture credit is the loans and funding provided to farmers outside farming sector.

POINT 13 — Milk production 108 million MT by 2025

The budget has allocated funds to address the foot and mouth disease issues. It also includes Brucellosis in cattle and PPR (Peste des petits ruminant) in goats and sheep.

The GoI aims to eliminate all the three diseases by 2021.

The coverage of artificial insemination is to be increased from the current 30% to 70%. MGNREGA will be implemented to develop fodder farms.

The GoI also aims to double the milk capacity of the country from 53.5 million metric tonnes to 108 million metric tonnes by 2025.

POINT 14 — Blue Economy-Fish Production boosted to 200 lakh tonnes

A framework is to be put in place to develop and manage conservation of marine fisheries resources. The youth in coastal areas are to be trained in fish processing and marketing. GoI aims to increase the fish production to 200 lakh tonnes by 2022-23. The GoI also intends to promote Growing of algae, sea weeds and cage culture.

POINT 15 — Fish Farmer Producer Organization (Fish FPO) introduced

Through 3,477 SAGAR Mitras and 500 fish farmer producer organization fish production is to be boosted. The youths in the coastal areas and inland fishing areas are to be trained as SAGAR Mitras.

POINT 16 — SHGs of Deendayal Antyodaya Yojana to be mobilised

Under Deendayal Antyodaya Yojana, currently 58 lakh SHGs have been mobilized. They are to be mobilized further.


For the sector of Agriculture, irrigation, rural development and allied activities 2.83 lakh crore rupees has been allocated. Out of this, for agriculture and irrigation, 1.6 lakh crores has been allocated. For rural development and Panchayati Raj 1.23 lakh crore rupees has been allocated.

The Budget also aims to spread the fund across certain flagship schemes of the government.


The GoI is working on the agricultural target of doubling farmers income by 2022. The schemes that were highlighted to achieve the target are as follows

  • Energy Sovereignty has been provided through KUSUM
  • Input Sovereignty through Paramparagat Krishi Vikas Yojana (Promotes Traditional Farming)
  • 11 crore farmers are registered Pradhan Mantri Fasal Bhima Yojana (PMFBY)
  • Expansion of micro-irrigation through Pradhan Mantri Krishi Sinchai Yojana (PMKSY)




Latest E-Books