2017

## Demand For Grants 2017-18 Analysis Agriculture, Co-Operation And Farmers' Welfare

The Ministry of Agriculture is divided into three departments: (i) Agriculture, Cooperation and Farmers Welfare, which implements programmes and schemes relating to crop husbandry, and manages agriculture inputs, (ii) Agricultural Research and Education, which manages agriculture universities, and promotes research in the sector and (iii) Animal Husbandry, Dairying and Fisheries, which manages the production and development of livestock, dairy and fisheries.  This note analyses the expenditure trends and budget proposals of the Department of Agriculture, Cooperation and Farmers Welfare, which accounts for 82% of the Ministry's allocation.    

## Allocation To The Ministry In 2017-18

The Ministry has been allocated Rs 51,026 crore in 2017-18.  The estimated expenditure of the Ministry has increased by 6.1% over the revised estimate in 2016-17 (Rs 48,073 crore).  Detailed expenditure of the Departments may be found in the Annexure. 

Agriculture (in Rs crore) 
| BE                    | %       |
|-----------------------|---------|
| Department            |         |
| RE                    |         |
| 2016-17               | 2017-18 |
| Agriculture & Co-     |         |
| operation             |         |
| 39,841                | 41,855  |
| Agricultural Research |         |
| & Education           |         |
| 6,238                 | 6,800   |
| Animal husbandry,     |         |
| Dairying & Fisheries  |         |
| 1,994                 | 2,371   |
| Total                 | 48,073  |

RE: Revised estimate; BE: Budgeted estimate. Sources: Expenditure Budget, Union Budget 2017-18; PRS.   
As seen in Table 1, in 2017-18: 

 
Department of Agriculture, Co-operation 
and Farmers Welfare has seen a 5.1% 
increase (Rs 2,015 crore) in allocation over the revised estimate of 2016-17.  This is mainly on account of a 42% increase (Rs 1,610 crore) in the budgeted expenditure on the Pradhan Mantri Krishi Sinchayi Yojana.   
 
Department of Agricultural Research and 
Education has a 9% increase (Rs 562 crore) in 
allocation, over revised estimates of 2016-17. The increase may be attributed to significant increase in allocation to autonomous bodies under the Ministry (such as Indian Council of Agricultural Research and Central Agriculture Universities), of Rs 4,086 crore.  At the same time, allocations to crop sciences and animal sciences have been reduced.   
 
Department of Animal Husbandry, 
Dairying and Fisheries has seen a 18.9% (Rs 
377 crore) increase in allocation over the revised estimate of 2016-17.  The increase is on account of allocations to the Rasthriya Gokul Mission (Rs 190 crore) and National Livestock Mission (Rs 60 crore).   

## Departmental Expenditure

The Department of Agriculture, Cooperation 
(DAC) and Farmers' Welfare has been allocated Rs 
41,855 crore in 2017-18.  Between 2007-08 and 
2017-18, the expenditure of the department 
increased at an average rate of 18.3% annually.  
However, expenditure on the Department as a 
proportion of total expenditure has remained in the 
same range, increasing from 1.1% to 1.9% over this 
period.   

Table 2 shows the Department's expenditure as a 
percentage of total expenditure, over the years.   

Rs crore) 
Total 
Year 
DAC 
% 
increase 
expenditure 
% of total 
2007-08 
7,814 
48.0% 
7,12,671 
1.1% 
2008-09 
10,328 
32.2% 
10,24,487 
1.0% 
2009-10 
11,675 
13.0% 
11,97,328 
1.0% 
2010-11 
17,245 
47.7% 
11,97,328 
1.4% 
2011-12 
16,719 
-3.1% 
13,04,365 
1.3% 
2012-13 
17,953 
7.4% 
14,10,372 
1.3% 
2013-14 
18,923 
5.4% 
15,59,447 
1.2% 
2014-15 
19,255 
1.8% 
16,63,673 
1.2% 
2015-16 
15,296 
-20.6% 
17,90,783 
0.9% 
2016-17 
39,841 
160.5% 
20,14,407 
2.0% 
2017-18 
41,855 
5.1% 
21,46,735 
1.9% 

RE: Revised estimate; BE: Budgeted estimate. 
Note: 2007-08, 2008-09 2016-17: Revised estimate; 2009-10 to 
2015-16: Actuals; 2017-18: Budgeted estimate.   
Sources: Union budget documents; PRS. 

## Capital And Revenue Expenditure

99.8% of the Department's expenditure is 
estimated to be spent on revenue expenses such as 
such as subsidies on premiums and interest rates, 
among other things.  0.2% of the expenditure is 
estimated to be on capital expenses (Rs 79 crore).  
Of this, Rs 25 crore is to be spent on land 
development banks, and Rs 25 crore is to be spent 
on agricultural mechanisation.  Rs 15 crore is to be 
spent on capital expenses under a seeds and 
planting material scheme.   

## Underutilisation Of Funds

The Department's actual expenditure over the past few years has been more than 80% of the budgeted expenditure.  However, actual expenditure as a percentage of budgeted expenditure decreased from 
95.4% to 85%, from 2011-12 to 2014-15.  In 2015- 16, actual expenditure as a percentage of budgeted expenditure increased to 90%.  The Standing Committee on Agriculture has observed that reducing allocations at the revised stage may be a result of slow spending in the first two quarters of the financial year.1 During 2016-17, the expenditure of the department was 10.7% more than the budget estimates for the year.  This was mainly on account of a Rs 7,739 crore increase in the allocation for the Pradhan Mantri Fasal Bima Yojana.  The Finance Minister stated that this was in order to settle arrears claims for previous years.2  Table 3 shows the trend in allocation and actual estimates of expenditure over the past five years. 

| Year    | Budgeted    | Actuals    | % of budgeted    |
|---------|-------------|------------|------------------|
| 2011-12 | 17,523      | 16,719     | 95.4%            |
| 2012-13 | 20,530      | 17,953     | 87.4%            |
| 2013-14 | 21,934      | 18,923     | 86.3%            |
| 2014-15 | 22,652      | 19,255     | 85.0%            |
| 2015-16 | 17,004      | 15,296     | 90.0%            |
| 2016-17 | 35,984      | 39,841     | 110.7%           |

Note: The 'actuals' figure for 2016-17 is a revised estimate. Sources: Union Budget documents; PRS.   

## Composition Of Expenditure

Of the budgeted expenditure of the Department of Agriculture, Co-operation and Farmers Welfare, 77% is proposed to be spent on four schemes, (i) 
the Interest Subsidy Scheme, for short term credit to farmers, (ii) Pradhan Mantri Fasal Bima Yojana, to provide insurance coverage to farmers, (iii) Rashtriya Krishi Vikas Yojana, to implement state plans for agriculture development, and (iv) Pradhan Mantri Krishi Sinchai Yojana, to increase the coverage of irrigation in the country.   
Table 4 shows the expenditure on various schemes under the Department. 

Table 4: Expenditure on schemes (in Rs crore) 
% 
Scheme 
RE 
2016-
BE 
2017-
change 
17 
18 
Interest Subsidy Scheme 
13,619 
15,000 
10.1% 
Fasal Bima Yojana 
13,240 
9,000 
-32.0% 
Krishi Vikas Yojana 
3,550 
4,750 
33.8% 
Krishi Sinchayi Yojana 
1,990 
3,400 
70.9% 

RE: Revised estimate; BE: Budgeted estimate. Sources: Union Budget 2017-18; PRS.   

Interest Subvention Scheme:  In 2017-18, the 
interest subvention scheme has been allocated Rs 
15,000 crore, accounting for 36% of the estimated 
expenditure of the Department.  In 2016-17, Rs 
15,000 crore was allocated to the scheme, which 
was revised down to Rs 13,619 crore.  Until 2015-
16, this scheme was accounted under the Ministry 
of Finance.  It is now under the Department.   

As of December 2016, Rs 4,128 crore had been 
released to NABARD and Rs 8,431 crore had been 
released to RBI to settle pending claims.  Rs 2,441 
crore was left to be spent until March 2017.3 

Pradhan Mantri Fasal Bima Yojana:  The 
scheme has been allocated Rs 9,000 crore in 2017-
18, a 32% decrease over its allocation in 2016-17 
(revised estimate).   

The scheme, when it was launched in 2016, 
subsumed the existing crop insurance schemes: 
National Agricultural Insurance Scheme (NAIS), 
the Modified National Agricultural Insurance 
Scheme (MNAIS) and the Weather-based crop 
insurance scheme (WBCIS).  In 2015-16 (up to 
December 2015), 181 lakh farmers were covered 
under the NAIS, 56 lakh farmers under the 
MNAIS, and 81 lakh farmers under the WBCIS.4  

In comparison, the Fasal Bima Yojana covered 367 
lakh farmers in Kharif season 2016 and 309 lakh 
farmers in Kharif 2015 season.5   

Rashtriya Krishi Vikas Yojana:  In 2017-18, Rs 
4,750 crore has been allocated to this scheme, a 
34% increase over the revised estimate of Rs 3,550 
crore in 2016-17.   

In 2016-17, as of November 2016, 68.7% of the 
amount allocated to the scheme has been spent by 
the states.6  Under the scheme, district and state 
agriculture plans are prepared for the development 
of various aspects under agriculture.  The Standing 
Committee on Agriculture has noted that despite 
the increase in allocation, only 8 states have formed 
their state agricultural plans and only 192 district 
agriculture plans have been prepared, out of 652 
districts, under the scheme.1  It recommended that 
the Department ensure that all districts and states 

comply with the provision of preparing district and state plans.  
Pradhan Mantri Krishi Sinchai Yojana:  In 
2017-18, the Department has been allocated Rs 
3,400 crore for the scheme, a 71% increase over the revised estimates of 2016-17.  Note that no funds have been provided for capital expenditure under the Department.  However, since the scheme is implemented jointly by the Ministries of Agriculture, Rural Development and Water Resources, funds for capital expenses (Rs 1.6 crore) have been allocated under them. The scheme aims to increase the coverage of area under micro irrigation (sprinkler and drip irrigation).  In 2015-16 (up to December 2015), 2.4 lakh ha had been covered under micro irrigation, compared to the target of 4.4 lakh ha.4   

## Policy Proposals In Union Budget 2017-18

The following provisions were made for the Ministry in the 2017-18 Budget Speech:2  

 
NABARD:  A micro-irrigation fund under 
National Bank for Agricultural and Rural Development (NABARD) will be set up with an initial corpus of Rs 5,000 crore.  The long term irrigation fund which was set up under NABARD in 2016-17 has been provided with an additional Rs 20,000 crore 
in this year.  
 
Agricultural credit:  An agricultural credit 
target of Rs 10 lakh crore has been fixed for 2017-18.  This target was Rs 9 lakh crore in 2016-17 and Rs 8.5 lakh crore in 2015-16. In 2015-16, Rs 8.8 lakh crore was given as agricultural credit, and from April-
September 2016, Rs 7.6 lakh crore was given 
as agricultural credit.7   
 
Crop Insurance:  The coverage of the 
Pradhan Mantri Fasal Bima Yojana is proposed to be increased from 30% of the cropped area in 2016-17 to 40% in 2017-18, 
and 50% in 2018-19.    
 
Agricultural markets:  Rs 75 lakh is 
proposed to be provided to each e-National Agricultural Market (e-NAM), and the number of e-NAMs is proposed to be increased from 250 to 585 markets.  The e- NAM proposes to create a common electronic platform which provides real time prices for agricultural commodities, by linking state Agricultural Produce Market 
Committee (APMC) mandis. 
 
Dairy processing:  A Dairy Processing and 
Infrastructure Development Fund is proposed to be set up under NABARD with an initial corpus of Rs 2,000 crore.  It will be increased to Rs 8,000 crore over the next 
three years.   

## Expenditure By Centre And States8

Agriculture is a state subject, i.e. both the centre 
and states make laws regarding it.  The central 
government undertakes broad policy formulation in 
the sector, while state governments carry on the 
implementation of schemes.9  Most of the 
expenditure on the sector is carried out by state 
governments.  In 2015-16, of the cumulative 
expenditure on agriculture, 72% was spent by state 
governments, while the centre spent 28%.10 

Allocations from the department are devolved to 
the states for implementation of various schemes.  
In 2017-18, the government is estimated to transfer 
Rs 12,048 crore on grants-in-aid to state 
governments, accounting for 29% of the total 
departmental expenditure.  Details of the 
expenditure by the centre and states on Agriculture 
can be found in Figure 2.   

Sources: Indian Public Finance Statistics 2015-16, Ministry of 

## Growth In The Agriculture Sector

According to the Central Statistics Office, growth 
in agriculture output is expected to be 4.1% in 
2016-17.  However, growth has been volatile over 
the past few years; it was 0.8% in 2015-16, -0.2% 
in 2014-15 and 4.2% in 2013-14.11,12  Annual 
growth in agriculture over the past few decades is 
shown in Figure 3.   

Sources: Agricultural Statistics at a Glance, 2015; PRS. 

Within the agriculture sector, the output of the crop husbandry component declined by 2.2% in 2015- 16, and contributed to 9.3% of the GDP.  On the other hand, the livestock, fisheries and aquaculture component grew at 6.6%, and contributed to 4.8% 
of the GDP.   

## Analysis Of Agriculture Sector

Growth and output of the agriculture sector depend on several aspects such as availability of inputs, access to credit, and pricing and marketing of agricultural commodities.  We discuss some key issues regarding these factors below. 

## Soil Health And Fertilizers

Imbalance of nutrients in the soil and overuse of certain fertilizers has led to a deterioration of soil quality.  There are three major types of nutrients used as fertilizers: Nitrogen (N), Phosphatic (P), and Potassic (K).  Of these, the pricing of urea (containing N fertilizer) is controlled by the government, while P and K fertilizers are unregulated.  This has led to the price of N remaining low, while P and K increasing over time due to market factors.  The Standing Committee on Agriculture observed that urea is used more than the other fertilizers.  While the recommended ratio of use of the NPK fertilizers is 4:2:1, this ratio in India is currently at 6.7:2.4:1.13  Details of N,P and K fertilizer consumption can be found in Table 10 in the Annexure. In order to provide farmers with information regarding the quality of their soil, the Soil Health Card scheme was launched in 2015.  If farmers are unaware about the kind of fertilizer which is required for the soil in which they sow their crops, the productivity of the soil will be subsequently affected.  Under the Soil Health Card scheme, farmers are issued soil health cards, which contain information such as the nutrient status of the soil and the recommended dose of nutrients to be provide to improve its fertility.  As of February 2017, 2.9 crore farmers have been covered under this scheme.14  2.5 crore soil samples have been collected, and 1.8 crore samples have been tested.15 The Ministry had set a target of 2.53 crore samples to be collected by March 2017.   

## Quality Of Seeds

Quality seeds is another input necessary for agricultural productivity, and good quality seeds account for 20%-25% of increased crop productivity.16 About 30%-35% of the total seeds available are produced by private and public sector companies, and farm bred seeds account for the remaining seeds.18  While farmers can develop certain varieties of seeds from the crops harvested on their land, high-yielding varieties of seeds have to be 

purchased from the market.  The cost of these 
varieties is too high for marginal and small farmers 
to afford, thus dis-incentivising them from 
purchasing these varieties.17  Some of the 
challenges identified in the development and 
distribution of quality seeds are (i) access to quality 
seeds, and (ii) inadequate research support for the 
development of seeds.18   

The Economic Survey 2015-16 recommended 
bringing in more players into the production of 
seeds, to improve their availability and also reduce 
their prices.18  Other recommendations include the 
creation of seed banks for price stability, creation 
of storage facilities and promoting domestic 
production of seeds.19  

## Irrigation

As of 2012-13. about 51% of the agricultural area 
cultivating food grains is covered by irrigation, the 
rest being dependent on rainfall.20  The area under 
irrigation consumes about 84% of the total 
available water in the country.21  There is a need to 
improve the efficiency of water use, especially in 
agriculture.17   

The Economic Survey 2015-16 stated that farmers 
should move from flood irrigation to the drip or 
sprinkler irrigation systems (micro irrigation).22  
Micro-irrigation techniques help in conserving 
water as well as saving on the cost of irrigation.  
Using micro-irrigation systems (such as drip or 
sprinkler irrigation) has also been linked to an 
increase in the yield of crops.  Details of micro-
irrigation coverage in states may in found in Table 
11 in the Annexure. 

## Agriculture Credit

Agriculture credit refers to the loans advanced to 
farmers for farming activities.  Key issues relating 
to agricultural credit are unclear land records, 
skewed ratio between short term and long term 
agricultural credit, and inadequate access to crop 
insurance.23   

Access to agricultural credit is linked to the holding 
of formal land titles.  As a result, small and 
marginal farmers, who account for more than half 
of the total land holdings, and may not hold formal 
land titles, are unable to access institutionalized 
credit.23  A Reserve Bank of India (RBI) 
Committee had recommended that credit eligibility 
certificates, which would act as tenancy/lease 
certificates should be issued to tenant farmers.23  
These certificates would also enable landless tenant 
cultivators to obtain agricultural credit.   

Farmers may require credit for short term uses such 
as purchasing inputs, weeding, harvesting, sorting 
and transporting, or long term uses such as 
investing in agricultural machinery and equipment, 
or irrigation.  Over the past few decades, the trend 

of short term and long term agricultural credit in 
the country has reversed.  From 1990-91 to 2011-
12, the share of long term credit decreased from 
about 75% to 61% (see Table 5).24,25  This implies 
that farmers are taking loans for recurring 
expenditures rather than to fund long term 
investments.   

Table 5: Short term and long term loans as a % share of agricultural loans 
Share of long term 
Year 
Share of short 
term loans  
loans  
1990-91 
24.9 
75.1 
2000-01 
40.4 
59.7 
2010-11 
54.1 
46.0 
2011-12 
60.7 
39.3 

Sources: Appendix 1.5, Report of the Internal Working Group to revisit Existing Priority Sector Lending Guidelines, Reserve Bank of India; PRS.   

The RBI noted that farmers with land holdings of 
less than a hectare primarily borrow from informal 
sources of credit such as moneylenders (41%), 
whereas those with land holdings of two or more 
hectares primarily borrow from banks (50% or 
more).23  Informal sources of credit are typically 
offered at higher rates of interests, and may not 
have proper documentation.  Other major sources 
of agricultural credit include shopkeepers, relatives 
or friends, and co-operative societies.  Details 
regarding the sources of agricultural credit may be 
found in Table 14 in the Annexure.   

## Crop Insurance

As of 2011, about 10% of Indian farmers were 
covered under a crop insurance scheme.26  Some 
persistent issues with the crop insurance system 
include (i) unawareness about insurance schemes, 
(ii) inadequate coverage of insurance schemes, (iii) 
assessment of the extent of damages in case of crop 
losses, and (iv) timely settlement of claims.27   

The Standing Committee on Finance has 
recommended that assessment of crop damage 
should be completed and compensation should be 
deposited directly into farmers' accounts in a 
timely manner.27  In addition, to reduce the seeking 
of unproductive credit, the government should 
create awareness about what crops should be grown 
based on the quality of soil and incidence of 
rainfall, etc. in different regions.27  In February 
2017, the government, through a notification, made 
the use of Aadhaar mandatory as proof of identity, 
in order to avail of crop insurance schemes.28  

The Pradhan Mantri Fasal Bima Yojana was 
launched by the central government in January 
2016.29  The scheme aims to provide insurance 
coverage to farmers for crop failure, stabilise 
farmers' income, and encourage farmers to adopt 
modern agricultural practices, among others.30  The 
scheme covers all farmers, including tenant farmers 

and sharecroppers, who are growing notified crops 
in notified areas.  The Finance Minister has stated 
that the government aims to increase the coverage 
of the scheme from 30% of all farmers in 2016-17 
to 40% in 2017-18.2 

The 12th Plan Working Group on Agriculture, in its 
report, observed that crop insurance schemes would 
be effective only if combined with measures such 
as soil and water conservation, sustainable 
agricultural practices and diversification of 
cropping pattern.  The Standing Committee on 
Agriculture has also pointed out that issues such as 
(i) discrepancy in the area insured compared to the 
actual farm area, (ii) availability of weather data to 
determine damage to crops, (iii) lack of awareness 
among farmers regarding insurance schemes need 
to be addressed for schemes to be implemented 
effectively.31   

## Mechanisation

Mechanisation is the use of machinery or 
technology in agricultural activities.  The status of 
mechanisation in agriculture varies for different 
activities, although the overall level of 
mechanisation is still less than 50%, as compared 
to 90% in developed countries.32  The highest level 
of mechanisation (60%-70%) is observed in 
harvesting and threshing activities and irrigation 
(37%).  The lowest level of mechanisation is found 
in seeding and planting.  To increase productivity, 
farm equipment which is durable, light-weight, low 
cost, and also specific to different crops and 
regions should be made available for small and 
marginal farmers.32  The Economic Survey 2015-16 
recommends that there is also a need for a rental 
market for agricultural machinery to make it more 
cost-effective.18   

One of the factors which may be contributing to the 
low usage of machinery in agriculture is the small 
size of agricultural land holdings.  As per the 
Agricultural Census of 2010-11, 67% of the land 
holdings in India were less than 1 hectare.33  This 
leads to difficulty in the usage of technology, due 
to size and capital investment constraints.  Table 6 
shows the share of agricultural land holdings as a 
proportion of total agricultural area.   

| 1990-             | 2000-   | 2010-   |
|-------------------|---------|---------|
| Size of holding   |         |         |
| 1980-             |         |         |
| 81                | 91      | 01      |
| Marginal (> 1 ha) | 56.4%   | 59.4%   |
| Small (1-2 ha)    | 18.1%   | 18.8%   |
| Medium (2-10 ha)  | 23.1%   | 20.2%   |
| Large (<10 ha)    | 2.4%    | 1.6%    |

Sources: Agricultural Statistics at a Glance, 2015; PRS.   

## Minimum Support Prices (Msps)

MSPs are the prices at which the central government purchases agriculture commodities from farmers.  High MSPs provide incentives to farmers to adopt modern technologies and farming practices, in order to increase the overall productivity of their crops.  The government currently announces MSPs for 22 crops (MSPs over the past 10 years may be found in Table 12 in the Annexure).34  Some issues with the implementation of the MSP regime include (i) low awareness among farmers before the sowing season (according to NITI Aayog, 62% of the farmers were informed of MSPs after the sowing season), (ii) long distances to the procurement centres, (iii) increasing cost of transportation for farmers, and (iv) inadequate storage capacity.35 The NITI Aayog noted that the agricultural pricing policy needs to be reviewed to ensure that farmers are receiving remunerative prices for their produce. Farmers are often forced to engage in distress sales, i.e., selling below the MSPs.  One of the measures it recommends to assure remunerative prices is a price deficiency system.35  Under such a system, farmers would be compensated for certain commodities if their prices fall under a specified threshold.  This would reduce stock-holding by farmers who store commodities until prices increase, and also incentivise farmers to produce different crops.  Farmers would be paid by using the direct benefit transfer system, through bank accounts linked to the their Aadhaar numbers. Over the past year, the government has been linking the issuing of welfare benefits to Aadhaar, and ration cards under the PDS are being seeded into Aadhaar System.  In February 2017, the government made the use of Aadhaar numbers as identification mandatory, in order to receive food grains under the Public Distribution System.36   
                                                           
25.pdf. 18/impbud/impbud.pdf.   

## Agricultural Marketing

Agricultural markets in the country are regulated 
by state Agricultural Produce Marketing 
Committee (APMC) laws.37  Over the years, 
several issues have been highlighted in this system, 
such as market fee being levied on farmers, which 
makes it expensive for them to sell at APMC 
mandis.  Other costs borne by the farmers include 
transportation costs from the farm to the mandi, 
and fees paid to intermediaries as commissions.40  
Thus the market price which the farmer receives for 
his produce is significantly lower than the price at 
which his produce is sold to the retailer.   

The central government had released a Model 
APMC Act in 2003, to be enacted by states.38  The 
Model Act provides for (i) the direct selling of 
produce to contract buyers, or markets set up by 
private players or consumers, (ii) permits farmers 
and consumers to establish agricultural markets, 
and (iii) levies a single market fee on the sale of the 
commodity, among other things.  However, only 18 
states and union territories have implemented the 
reforms laid out in the Model Act.39  Four states are 
yet to initiate the reforms, and the remaining states 
are at various stages of implementing them.  
Information regarding states' progress towards 
APMC reforms may be found in Table 13 of the 
Annexure. 

The Economic Survey 2014-15 recommended that 
a National Agricultural Market (e-NAM) be created 
to provide for a national electronic platform on 
which farmers may sell their produce.40  As of 
December 2016, 250 mandis and 10 states have 
been integrated with e-NAM.  Nine lakh farmers, 
59,742 traders and 31,317 commission agents have 
been registered on the electronic platform.41   
 

8 Demand No. 1, Demand for Grants, Union Budget 2017-18, 
http://unionbudget.nic.in/ub2017-18/eb/sbe1.pdf.  
9 "Demand for Grants (2015-16)", Ninth Report of the 
Department Related Standing Committee on Agriculture, 
http://164.100.47.134/lsscommittee/Agriculture/16_Agriculture_
9.pdf. 
10 Indian Public Finance Statistics 2015-16, Ministry of Finance, 
http://dea.gov.in/sites/default/files/IPFS%20English%202015-
16.pdf.  
11 "Press Note on First Advance Estimates of National Income 
2016-17", Ministry of Statistics and Programme 
Implementation, January 6, 2017, 
http://mospi.nic.in/sites/default/files/press_release/nad_prn_6jan
17.pdf;  
"Press Note on Provisional Estimates of Annual National 
Income 2015-16", Ministry of Statistics and Programme 
Implementation, May 31, 2016, 
http://mospi.nic.in/sites/default/files/press_release/nad_press_rel
ease_31may16.pdf.   

                                                                                                                                                                                     
19 Task Force on Agricultural Development, NITI Aayog, http://niti.gov.in/mgov_file/Raising%20Agricultural%20Productivity%20and%20Making%20Farming%20Remunerative%20for%20Farmer s.pdf. 20 Pocket Book of Agricultural Statistics, 2015, Ministry of Agriculture and Farmers Welfare, http://eands.dacnet.nic.in/PDF/Pocket- Book2015.pdf. 21 "Raising Agricultural Productivity and Making Farming Remunerative for Farmers", NITI Aayog, December 16, 2015, http://www.niti.gov.in/writereaddata/files/document_publication/RAP3.pdf. 22 Natural Resource Management, State of Indian Agriculture 2015-16, Ministry of Agriculture and Farmers Welfare, May 2016, http://agricoop.nic.in/imagedefault/state_agri_1516.pdf. 23 Report of the Committee on Medium-term Path on Financial Inclusion, Reserve Bank of India, December 2015, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/FFIRA27F4530706A41A0BC394D01CB4892CC.PDF. 24 Report of the Internal Working Group to Revisit the Existing Priority Sector Lending Guidelines, Reserve Bank of India, March 2, 2015, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/PSGRE020315.pdf. 25 Report of the Advisory Committee on Flow of Credit to Agriculture, Reserve Bank of India, May 2004, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/53525.pdf. 26 12th Plan Working Group Report on Natural Resource Management and Rainfed Farming, November 15, 2011. 27 34th Report: State of rural/agricultural banking and crop insurance, Standing Committee on Finance, August 10, 2016, http://164.100.47.134/lsscommittee/Finance/16_Finance_34.pdf. 28 S. O. 369 (E), Ministry of Agriculture and Farmers Welfare, e-Gazette of India, February 8, 2017. 29 "Pradhan Mantri Fasal Bima Yojana (PMFBY), Ministry of Agriculture, http://agricoop.nic.in/imagedefault/whatsnew/sch_eng.pdf; "Cabinet approves New Crop Insurance Scheme - Pradhan Mantri Fasal Bima Yojana", Press Information Bureau, Ministry of Agriculture, January 13, 2016. 30 Expenditure Budget Volume 2, Department of Agriculture and Co-operation, Ministry of Agriculture and Farmers Welfare, Union Budget 2016-17, http://unionbudget.nic.in/ub2016-17/eb/sbe1.pdf. 31 Report of the Committee to Review the Implementation of Crop Insurance Schemes in India, Ministry of Agriculture, May 2014. 32 Mechanization and Technology, Chapter 8, Agriculture and Food Management, Economic Survey 2013-14, http://unionbudget.nic.in/budget2014-2015/es2013-14/echap-08.pdf. 33 Number and area of holding by size and class, Agricultural Census 2010-11, Ministry of Agriculture. 34 "Minimum Support Prices Recommended by CACP and Fixed by Government (Crop year), Commission for Agricultural Costs and Prices, Ministry of Agriculture, http://cacp.dacnet.nic.in/ViewContents.aspx?Input=1&PageId=36&KeyId=0. 35 Evaluation Report on Efficacy of Minimum Support Prices (MSPs), NITI Aayog, January 2016, http://www.niti.gov.in/writereaddata/files/document_publication/MSP-report.pdf. 36 S.O. 371 (E), Ministry of Consumer Affairs, Food and Public Distribution, e-Gazette of India, February 8, 2017. 37 Agricultural Marketing, Department of Agriculture, Co-operation and Farmers Welfare, Ministry of Agriculture and Farmers Welfare, http://www.agricoop.nic.in/divisiontype/agricultural-marketing. 38 Salient Features of the Model Act on Agricultural Marketing, Ministry of Agriculture and Farmers Welfare, http://agmarknet.nic.in/amrscheme/modelact.htm. 39 Agricultural Prices, Marketing and International Trade, State of Indian Agriculture 2015-16, Ministry of Agriculture and Farmers Welfare, May 2016, http://agricoop.nic.in/imagedefault/state_agri_1516.pdf. 40 Chapter 8, "A National Market for Agricultural Commodities - Some Issues and the Way Forward", Volume 1, Economic Survey 2014- 15, http://www.indiabudget.nic.in/es2014-15/echapvol1-08.pdf. 41 "Achievements of Ministry of Agriculture and Farmers Welfare", Press Information Bureau, Ministry of Agriculture, January 2, 2017. DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS").  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.  

## Annexure Detailed Expenditure Tables

% change from RE 
Major head 
Actuals 
2015-16 
Budgeted 
2016-17 
Revised 
2016-17 
Budgeted 
2017-18 
2016-17 to BE 2017-18 
Crop Insurance 
2,983 
5,500 
13,240 
9,000 
-32.0% 
Interest subsidy for farmers 
0 
15,000 
13,619 
15,000 
10.1% 
Centrally Sponsored Schemes 
11,295 
14,900 
12,350 
17,141 
38.8% 
Others 
985 
583 
631 
714 
13.1% 
Total 
15,263 
35,984 
39,841 
41,855 
5.1% 

Sources: Union Budget 2017-18; PRS. Note: *Allocations for interest subsidy were made under the Ministry of Finance before 2016-17.   

Major Head 
Actuals 
2015-16 
Budgeted 
2016-17 
Revised 
2016-17 
Budgeted 
2017-18 
% change RE 2016-
17 to BE 2017-18 
Agriculture Extension 
664 
756 
856 
233 
-72.8% 
Management of Natural Resources 
695 
776 
690 
218 
-68.4% 
Crop Sciences 
1,819 
2,016 
1,942 
591 
-69.6% 
Animal Sciences 
1,077 
1,247 
1,220 
388 
-68.2% 
Agricultural Education 
659 
744 
792 
695 
-12.3% 
Autonomous bodies 
463 
845 
534 
4,620 
765.5% 
Others 
10 
235 
205 
57 
-72.3% 
Total 
5,386 
6,620 
6,238 
6,800 
9.0% 

Sources: Expenditure Budget, Union Budget 2017-18; PRS.   

% change RE 2016-
Major Head 
Actuals 
2015-16 
Budgeted 
2016-17 
Revised 
2016-17 
Budgeted 
2017-18 
17 to BE 2017-18 
National Fisheries Development Board 
165.29 
192.12 
33.81 
9 
-73.4% 
White Revolution 
937 
1,138 
1,312 
1,634 
24.6% 
Blue Revolution 
200 
247 
392 
401 
2.1% 
Others 
108 
305 
256 
327 
27.8% 
Total 
1,410 
1,882 
1,994 
2,371 
18.9% 

Sources: Expenditure Budget, Union Budget 2017-18; PRS.   
Other relevant data 

| Year    |   Urea (N)  |   Phosphatic (P)  |   Potassic (K)  |   Total  |
|---------|-------------|-------------------|-----------------|----------|
| 2004-05 |       117.1 |              46.2 |            20.6 |    184   |
| 2005-06 |       127.2 |              52   |            24.1 |    203.4 |
| 2006-07 |       137.7 |              55.4 |            23.3 |    216.5 |
| 2007-08 |       144.2 |              55.1 |            26.4 |    225.7 |
| 2008-09 |       150.9 |              65.1 |            33.1 |    249.1 |
| 2009-10 |       155.8 |              72.7 |            36.3 |    264.9 |
| 2010-11 |       165.6 |              80.5 |            35.1 |    281.2 |
| 2011-12 |       173   |              79.1 |            25.8 |    277.9 |
| 2012-13 |       168.2 |              66.5 |            20.6 |    255.4 |
| 2013-14 |       167.5 |              56.3 |            21   |    244.8 |
| 2014-15 |       169.4 |              60.9 |            25.3 |    255.8 |

Sources: Agricultural Statistics at a Glance 2015, Ministry of Agriculture and Farmers Welfare; PRS.   

| State/UT                                                                         | Drip               | Sprinkler    | Total     | % net sown area covered    |
|----------------------------------------------------------------------------------|--------------------|--------------|-----------|----------------------------|
| Andhra Pradesh                                                                   | 8,34,865           | 3,28,441     | 11,63,306 | 10.5%                      |
| Arunachal Pradesh                                                                | 613                | -            | 613       | 0.3%                       |
| Assam                                                                            | 310                | 129          | 439       | 0%                         |
| Bihar                                                                            | 4,610              | 97,440       | 1,02,050  | 1.9%                       |
| Chhattisgarh                                                                     | 15,553             | 2,41,420     | 2,56,973  | 5.5%                       |
| Goa                                                                              | 965                | 899          | 1,864     | 1.4%                       |
| Gujarat                                                                          | 4,11,208           | 4,18,165     | 8,29,373  | 8.1%                       |
| Haryana                                                                          | 22,682             | 5,50,458     | 5,73,140  | 16.3%                      |
| Himachal Pradesh                                                                 | 291                | 684          | 975       | 0.2%                       |
| Jharkhand                                                                        | 6,303              | 9,919        | 16,222    | 2.2%                       |
| Karnataka                                                                        | 4,29,903           | 4,17,005     | 8,46,908  | 60.2%                      |
| Kerala                                                                           | 22,516             | 6,948        | 29,464    | 0.3%                       |
| Madhya Pradesh                                                                   | 1,66,358           | 1,85,759     | 3,52,117  | 17.2%                      |
| Maharashtra                                                                      | 8,96,343           | 3,74,783     | 12,71,126 | 8.3%                       |
| Manipur                                                                          | 47                 | 30           | 77        | 0%                         |
| Mizoram                                                                          | 1,727              | 425          | 2,152     | 0.7%                       |
| Nagaland                                                                         | 200                | 5,005        | 5,205     | 1.8%                       |
| Odisha                                                                           | 18,431             | 82,147       | 1,00,578  | 86.7%                      |
| Punjab                                                                           | 30,805             | 12,161       | 42,966    | 11.3%                      |
| Rajasthan                                                                        | 1,70,098           | 15,14,451    | 16,84,549 | 38.4%                      |
| Sikkim                                                                           | 5,544              | 2,769        | 8,313     | 0.2%                       |
| Tamil Nadu                                                                       | 2,90,009           | 30,436       | 3,20,445  | 1.8%                       |
| Telangana                                                                        | 25,299             | 5,293        | 30,592    | 39.7%                      |
| Tripura                                                                          | 100                | 392          | 492       | 0%                         |
| Uttar Pradesh                                                                    | 15,519             | 21,164       | 36,683    | 14.3%                      |
| Uttarakhand                                                                      | 696                | 316          | 1,012     | 0.1%                       |
| West Bengal                                                                      | 604                | 50,576       | 51,180    | 0.3%                       |
| Others                                                                           | 15,500             | 31,000       | 46,500    | 0.9%                       |
| All India                                                                        | 33,87,099          | 43,88,215    | 77,75,314 | 5.6%                       |
| Sources: Agricultural Statistics at a Glance 2015, Ministry of Agriculture; PRS. |                    |              |           |                            |
| Table 12: MSPs for major crops 2005-2016 (in Rs/quintal)                         |                    |              |           |                            |
| % increase                                                                       |                    |              |           |                            |
| Crop                                                                             | 2005-06            | 2010-11      | 2016-17   |                            |
| % increase                                                                       |                    |              |           |                            |
| 2010-11 to 2016-17                                                               | 2005-06 to 2016-17 |              |           |                            |
| Paddy Common                                                                     | 570                | 1,000        | 1,470     | 6.6%                       |
| Jowar Hybrid                                                                     | 525                | 880          | 1,625     | 10.8%                      |
| Maize                                                                            | 540                | 880          | 1,365     | 7.6%                       |
| Ragi                                                                             | 525                | 965          | 1,725     | 10.2%                      |
| Tur (Arhar)                                                                      | 1,400              | 3,500        | 5,050     | 6.3%                       |
| Moong                                                                            | 1,520              | 3,670        | 5,225     | 6.1%                       |
| Urad                                                                             | 1,520              | 3,400        | 5,000     | 6.6%                       |
| Groundnut-in-shell                                                               | 1,520              | 2,300        | 4,220     | 10.6%                      |
| Sesamum                                                                          | 1,520              | 2,900        | 5,000     | 9.5%                       |
| Cotton medium staple                                                             | 1,760              | 2,500        | 3,860     | 7.5%                       |
| Cotton long staple                                                               | 1,980              | 3,000        | 4,160     | 5.6%                       |
| Wheat                                                                            | 700                | 1,170        | 1,625     | 5.6%                       |
| Masur                                                                            | 1,535              | 2,250        | 3,950     | 9.8%                       |
| Rapeseed/mustard                                                                 | 1,715              | 1,850        | 3,700     | 12.2%                      |

Note: MSPs include the bonuses declared for certain crops. Sources: Directorate of Economics and Statistics, Ministry of Agriculture; PRS.   

| Fruits and            | Direct         | Number of    |
|-----------------------|----------------|--------------|
| Taxes on agricultural |                |              |
| State/UT              | vegetables out | e-NAM        |
| commodities           |                |              |
| of APMC               |                |              |
| selling by            |                |              |
| producers             | NAM            |              |
| Andhra Pradesh        | Not done       | 7.0%         |
| Arunachal Pradesh     | Not done       | 2.0%         |
| Assam                 | Done           | 1.0%         |
| Bihar                 | Not done       | 0.0%         |
| Chhattisgarh          | Partial        | 2.0%         |
| Goa                   | Not done       | 5.0%         |
| Gujarat               | Done           | 5.8%         |
| Haryana               | Partial        | 10.5%        |
| Himachal Pradesh      | Partial        | 7.0%         |
| Jammu and Kashmir     | Not done       | 0.0%         |
| Jharkhand             | Not done       | 5.3%         |
| Karnataka             | Partial        | 7.5%         |
| Kerala                | Not done       | 3.0%         |
| Madhya Pradesh        | Partial        | 2.0%         |
| Maharashtra           | Partial        | 3.0%         |
| Manipur               | Not done       | 0.0%         |
| Meghalaya             | Done           | 1.0%         |
| Mizoram               | Not done       | 0.0%         |
| Nagaland              | Partial        | 0.0%         |
| Odisha                | Done           | 5.5%         |
| Punjab                | Not done       | 13.5%        |
| Rajasthan             | Partial        | 2.8%         |
| Sikkim                | Not done       | 1.3%         |
| Tamil Nadu            | Not done       | 5.0%         |
| Telangana             | Not done       | 0.0%         |
| Tripura               | Not done       | 2.0%         |
| Uttar Pradesh         | Not done       | 4.0%         |
| Uttarakhand           | Not done       | 9.0%         |
| West Bengal           | Partial        | 5.0%         |

Source: Study Report on Agriculture Marketing and Farmer Friendly Reforms Across Indian States, NITI Aayog; PRS. 

| Shopkeeper/    | Relatives/    |
|----------------|---------------|
| Government     |               |
| Co-operative   |               |
| society        |               |
| Bank           |               |
| Money          |               |
| lender         | trader        |
| Others         |               |
| Land           |               |
| holding        |               |
| (hectare)      |               |
| 0-1            | 1%            |
| 1-2            | 3%            |
| 2-4            | 2%            |
| 4-10           | 4%            |
| 10+            | 1%            |

Sources: Table 3.2, Report of the Committee on Medium-term Path on Financial Inclusion, Reserve Bank of India; PRS. 
2017