'Challenge is maintaining good prices for farmers'

As the Narendra Modi government prepares to present its first Budget in its third term, all eyes are on the rural and agriculture sectors, which are understood to have been critical in reducing the number of seats for the Bharatiya Janata Party (BJP) in the Lok Sabha elections. Agricultural economist and Infosys Chair Professor for Agriculture at the Indian Council for Research on International Economic Relations (Icrier) ASHOK GULATI tells Sanjeeb Mukherjee that the Union Budget could have a distinct populist tinge in a telephonic interview. Edited excerpts:

- ASHOK GULATI

What are your expectations from the Union Budget for the rural and agriculture sectors, given that the performance of the Narendra Modi government has not been awe-inspiring in the just-concluded elections?

My expectations from the Union Budget for the rural and agriculture sectors are high, especially considering the recent performance of the ruling government in the 2024 general elections.

The government needs to acknowledge the challenges faced in rural areas, particularly the decline in the agriculture growth rate to 1.4 per cent in FY24, which has resulted in the loss of rural-dominated seats. The government should prioritise Q& two key areas. Firstly, there should ASHOK be a substantial allocation for climate-resilient and smart Agricultu economis agriculture to mitigate the impact of climate change.

This includes increasing the budget for agriculture research and development to at least 1 per cent of the agriculture GDP, as it is currently less than 0.5 per cent. This will require a significant increase in the budget for agricultural research and development, potentially doubling it within two to three years. Additionally, the government needs to address food inflation, especially for vegetables and pulses. The current inflation rates for essential vegetables such as tomatoes, onions, and potatoes are concerning.