Much
of this would depend on how soon and how effectively they will be
implemented. Take the case of Gujarat. Last year, the state had
introduced open auction at the APMC markets with a fixed cess that
would be paid by the buyers. To date the system has not been implemented.
Of course, the Centre has also dangled additional allocations for
centrally sponsored schemes as the carrot for the states to implement
decontrol and deregulation in the sector.
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Food
Economy
- Increased allocations for BPL
families n Launch of food for work programme under the SGRY;
n
- Allocation of 30 lakh tonnes
of free foodgrains to states for relief works in areas affected
by natural calamities;
- Open market sales of 30 lakh
tonnes during 2001-02 compared to 5.5 lakh tonnes in 2000-2001;
- Enhanced incentives for export
of food grains
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The
finance minister has made an attempt, however small, to move away
from ineffective subsidies to focus on investment in infrastructure,
research, development and extension. The allocations for research
and development have been increased by Rs 91 crore. The scheme for
construction of cold storages and godowns has received an additional
Rs 70 crore in this year’s budget and provisions have been made
for rural roads, electrification and other infrastructure.
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Tax
Proposals
- Excise duty on tea reduced
from Rs 2 per kg to Re.1 per kg.
- Three more equipment items
added to the list of specified cold chain equipment exempt
from excise duty.
- Customs duty on tea and coffee
increased to 100 per cent and on natural rubber, poppy seeds,
pepper, cloves and cardamom to 70 per cent and pulses to 10
per cent.
- Customs duty on agricultural
machinery and implements reduced from 25 per cent to 15 per
cent.
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The
allocations are meager and way below the required levels. In the
case of rural employment, on first glance it would seem that rural
employment has been given an increased allocation of Rs 370 crore.
A closer look reveals that a large part of it is to be given as
food grains and the cash component is in fact lower.
On
the chaos in the food procurement scene, the budget is silent. The
little it says is not encouraging. The finance minister announced
that traders would be allowed to export the
stocks. One fails to understand the rationale behind this move in
a situation where global food prices are falling. The budget has
held back on the issue of disbandoning the open-ended procurement
system.
Moving
on to duties, the plantation sector, particularly the tea industry,
seems to have received a boost. The tea and coffee planters will
however have to be satisfied with the cut in excise duties from
two per cent to one per cent. They have been demanding that excise
duty be scrapped altogether.
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Fiscal
Facts
- Increases in the issue price
of urea by 5 per cent. Subsidy for SSP reduced by Rs 50 per
tonne. The prices of complex fertilisers to be modified. n
- Compulsory levy on sugar reduced
from 15 to 10 per cent. Retail price of PDS sugar to be Rs
13.50 per kg.
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No
denying that the lower excise will help bring down production cost
at a time the sector is reeling under recession. There is a glut
in the world market and prices have been depressed.
Customs duty too has been hiked up but how far it will help is doubtful
for two reasons. First, the country imports not much coffee. Second,
most of the tea imports are from Sri Lanka, which enjoys special
duty concessions under the SAARC agreement. In the case of rubber,
the custom duty has been increased only for latex, where the import
component is very small. Rubber sheets, which face stiff competition
from imports, have been excluded from the duty hike.
For
the agriculture sector, Budget 2002-03 is a case of ‘miles to go
and promises to keep’ because the steps that have been taken are
tentative and far from sufficient. The broader policy directive
can be commented upon only at the end of the year as they depend
on implementation. As agriculture is a state subject, the implementation
will depend on how efficiently they carry out the directives. 
