People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)

Vol. XXX

No. 11

March 12, 2006

AIKS On Union Budget 2006-07


Following is the text of the statement issued by All India Kisan Sabha (AIKS) president S Ramachandran Pillai on March 1, 2006


THE union budget 2006-07 has failed to address adequately the ongoing agrarian crisis. The reduction in the short-term interest rate for farmers and the proposed increase in farm credit are welcome measures, but these are inadequate to address the problems adequately. Most of the recommendations of the National Commission for Farmers (NCF), which submitted its final report in December 2005, have been completely ignored. For example in this budget there is no proposal for the constitution of a price stabilisation fund for agricultural commodities, creation of a fund to assist farmers affected by crop losses, expansion of crop insurance to the entire country covering all crops, revamping agricultural extension services etc.


There was a key sub-target of 4 per cent growth in agriculture, set for the Tenth Five Year Plan (2002-07) against the disappointing performance of 2 per cent growth of agriculture that was achieved during the Ninth Plan (1997–2002). However, during the first three years of the Tenth Plan we have experienced an even more disappointing growth rate of 1.27 per cent per annum in agriculture on an average. In this backdrop what was required was a big push to agriculture through a massive stepping up of public investment. Although the Plan allocation has gone up to Rs 6,927 crore this year, that this is grossly inadequate is borne out by the fact that total spending on agriculture as a proportion of GDP during the entire period of the Tenth Plan would remain at only 0.14 per cent compared to 0.17 per cent during the Ninth Plan. Central Plan outlay for agriculture and allied activities and irrigation and flood control taken together has been Rs 7,972 crore (0.2 per cent of GDP). The plan outlay for this ‘key sector’ is merely 2.9 per cent of total plan outlay and as a percentage of total budget-allocation, proposed plan plus non-plan expenditure on agriculture is 1.4 per cent. This does not reflect any sense of urgency on the part of the UPA government in lending priority to the agriculture sector and the crisis that it is facing today.


Moreover, no additional protection from imports has been provided for cultivators of cash crops, particularly for the growers of raw cotton. Overall the union budget 2006-07 does not reflect any significant shift away from the neo-liberal economic policies, which has caused havoc among the Indian peasantry. (INN)