The Planning Commissions last-minute controversial decision to revise the agriculture growth target for the ninth plan from 3.5 to 4.5 per cent will not be reflected in the allocation of resources for the sector.
The Commission has been forced to revise its earlier projection on agriculture growth by a section in the government led by agriculture minister Chaturanan Mishra. Since a huge increase in investments in irrigation and agriculture-related projects is not likely, the planners are gambling on the monsoon.
Even the move to revise poverty estimates is not going to bring about any change in the allocation of funds on anti-poverty programmes.
The Planning Commission has indicated that it will change over to the Lakdawala formula which will more than double the projections of the number of people below the poverty line.
Under the Lakdawala formula, 36 per cent of the people will be regarded as living below the poverty line. At present, the plan panels estimate of poor is 16 per cent of population.
This does not mean that allocation for anti-poverty programmes will automatically double. The change in the mode of calculating poverty is not linked to allocation of funds, a commission source said.
The eighth plan target for agriculture was 3.1 per cent but the achievement in the five years ending next March is expected to be 3.5 per cent. The improved performance is mostly due to good monsoons in the past few years and not because of public investment in irrigation.
We may not have enough funds to invest in irrigation for achieving a 3.5 per cent growth, leave alone allocation of additional funds to reach the 4.5 per cent level, a plan panel source said. Besides, the high target is not being supported with the needed increase in public investments in support structures such as rural roads and markets.
The agriculture minister has strongly advocated a higher level of public investments to boost agriculture exports which would in turn improve overall growth.
The revision in agriculture growth target amounts to projecting a 28 per cent increase in agricultural output. The high target and the current strategy of changing the cropping pattern will require much larger public investments in not only irrigation but other areas such as rural roads.
Even if you have a high level of output, it will be difficult to sustain it as long as consumption increases. Or else, we will have huge glut of unsold commodities. And, higher consumption presupposes a sharp rise in rural wages, the source said.
The eighth plan period is expected to create an additional irrigation potential of 10.6 million hectares which is even lower than 11.3 million hectares created in the seventh plan.
With Chief Ministers expressing their reluctance to raise user charges of irrigation projects, a significant increase in the level of investments in this sector appears improbable.
