Despite farmer protests, agriculture concerns not addressed in Budget 2021

Agriculture: Allocation to the Ministry of Agriculture and Farmers Welfare for the year 2021-22 has been reduced by eight percent to INR 1.32 lakh crore, from the budgeted estimate of INR 1.43 lakh crore the previous year. (The revised estimate for last year was INR 1.24 lakh crore.)

Moreover, no new announcements were made with respect to the government’s flagship schemes such as the Pradhan Mantri Fasal Bima Yojana (PMFBY) or the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme. Instead, the entire reduction in the ministry’s budget is primarily due to the cut in the PM-KISAN scheme. This is a particularly important scheme since it provides direct cash transfer to farmers, and proved critical in offering immediate relief to them during the COVID-19 pandemic and lockdown. 

The total allocation for this scheme in 2021-22 is INR 65,000 crore, which is the same as the revised estimate for 2020-21, but INR 10,000 crore lower than last year’s budget estimate.

Budget 2021 also didn’t address the issue of the ongoing farmers’ protests, which have now taken centre stage.

The issue of minimum support price (MSP) has remained contentious, with farmers demanding it be included in the newly passed Farm Acts 2020. However, despite the government’s assurances that the MSP regime is here to stay, the two schemes that ensure the implementation of MSP—the Market Intervention Scheme and Price Support Scheme (MIS-PSS) and the Pradhan Mantri Annadata Aay Sanrakshan Yojna (PM-AASHA), have seen a continuous reduction in budget allocation for the last two years.

The allocation under MIS-PSS for 2021-22 of INR 1,500 crore declined by 25 percent this year and was half of that for 2019-20. Similarly, allocation under PM-AASHA was reduced from INR 1,500 crore in 2019-20 to to a mere INR 400 crore in Budget 2021-22.

Fundraising & Communications: The Ministry of Home Affairs (MHA) has issued a circular extending the validity of FCRA registration certificates to September 30th, 2021. This applies to all FCRA licences that have expired or will expire between September 29th, 2020 and May 31st, 2021. The decision to extend the deadline has been driven by the exigencies arising from the COVID-19 situation.

FCRA refers to the Foreign Contribution (Regulation) Act 2010, which permits charitable organisations based in India to raise funds from foreign sources.

The order also clarified that nonprofits that have already opened an account and have the requisite permission to receive foreign aid, can henceforth receive it only in these newly-opened accounts.

The FCRA law was amended in September 2020 to include a clause that mandated that all nonprofits receiving foreign aid must necessarily open an account in State Bank of India’s New Delhi Main Branch. The government had initially set the deadline for this account opening as March 31st, 2021; it later extended it to June 30th, 2021 after several nonprofits argued in court that there had been delays because necessary approvals from MHA had not been received.

Several organisations have not been able to receive foreign funds during the crisis caused by the second wave, and this has impacted their COVID-19 relief efforts. Relaxing the foreign funding rules could significantly help organisations ramp up their operations to help individuals, supply critical healthcare equipment, and respond to communities in rural areas.

Read this article to know how amending the FCRA can have unforeseen implications.

Philanthropy & CSR: The Ministry of Corporate Affairs (MCA) has issued a circular that allows corporate spending on health infrastructure for COVID-19 care to qualify as corporate social responsibility (CSR) expenditure.

This includes setting up medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment to counter COVID-19.  

The announcement comes at a time when all efforts are being directed towards expediting efforts to support the country’s healthcare infrastructure.

According to the circular, companies can now undertake projects and activities in collaboration with other companies using CSR funds. Additionally, they can contribute to specified research and development projects, as well as publicly funded universities and certain organisations that conduct research in science, technology, engineering, and medicine.

The government had earlier clarified that setting up makeshift hospitals and temporary COVID-19 care facilities would also be considered a CSR activity. Rajesh Verma, the Corporate Affairs Secretary, has requested businesses to consider converting vacant office buildings into COVID-19 facilities to cater to the rapidly increasing caseload.

Read this article to understand why media attention on COVID-19 deaths due to lack of oxygen in big cities has skewed donor priorities.