Can the Budget Boost Agricultural Performance?

More than any other budget, which has been presented in recent years, the budget for 2005-06 was expected to correct the neglect of the agricultural sector. The budget is noteworthy for its focus on creation of greater employment in rural areas through increased allocations for rural development and irrigation. It also acknowledges some of the important changes that need to be implemented in agriculture, including a policy for diversification, rationalisation and restructuring of subsidies and greater decentralisation. But are the fiscal allocations and the policy impetus emanating from the budget adequate to revitalise agricultural growth performance in the economy? In this regard, the budget falls short of expectations. Not much of an effort has also been made to cut the food and fertiliser subsidy and stimulate public investment in agricultural research and development. Institutional changes necessary to improve service delivery in rural areas have also not been addressed adequately.