Rashtriya Krishi Vikas Yojana
The years old enemy of Indian agriculture has come back to haunt our country’s most important sector once again. This year’s drought has hit the farmers badly in 10 states. As a result, the government has come out with its rescue plan to save farmers from the crisis. The plan, for now, is to use funds allocated to Rashtriya Krishi Vikas Yojana (RKVY) and some other schemes for improving water and fodder supply in areas like Bundekhand where drought has been playing evil from quite sometime.
This less-known scheme has earned some media attention after long time. Otherwise it’s not too popular in the mainstream, especially not when compared to other agriculture schemes (i.e. PMKSY, PMFBY etc.) launched by PM Modi. The scheme is going to be 9 years old in August, so let’s take a look at what was its aim and how successful it has been so far in achieving it.
RKVY: Brief History
RKVY was launched during second tenure of former Prime Minister Dr. Manmohan Singh in August 2007. Its aim was to achieve 4% annual growth in country’s agriculture sector. Its primary objectives were:
- To incentivise states for increasing public investment in agriculture,
- To provide much needed autonomy to states for dealing with their agricultural issues,
- To maximize the returns for farmers,
- And finally as a result of all steps mentioned above, to increase the productivity of whole agriculture sector.
The scheme was funded by Central government, but utilization of funds had been left over state governments. No restrictions were imposed on states regarding utilization of funds except for the restriction that funds had to be used only for agriculture related purposes. As long as States participating in the scheme met this requirement, they could utilize the funds provided to them as they saw fit.
A strict eligibility criteria had been devised by the government to make sure that states didn’t lose focus from their agriculture sectors after receiving funding. The criteria required states to maintain their percentage of agriculture expenditure above a base line. This base line was determined by the average percentage of their annual agriculture expenditure for last three years. For example, consider the scenario given below for a state:
|Year||Agriculture Expenditure||Total Budget Outlay||Agriculture Expenditure Percentage|
|2007 – 2008||Rs. 250 crores||Rs. 2600 crores||9.61%|
|2008 – 2009||Rs. 200 crores||Rs. 2300 crores||8.69%|
|2009 – 2010||Rs. 150 crores||Rs. 1800 crores||8.33%|
|2010 – 2011||Rs. 170 crores||Rs. 1900 crores||8.94%|
In this scenario, the base line for this state to receive funding under RKVY for FY 2010 – 2011 will be determined by the average percentage of its agriculture expenditure for last three years. That is:
Base line for 2010 – 2011 = (9.61+8.69+8.33)/3 = 8.87%
Now since its agriculture spend for 2010 – 2011 is higher than this base line (8.94%), it’ll be eligible to receive funding under the scheme for 2010 – 2011. Otherwise not.
The states were not allowed to add funds received under RKVY into their agriculture expenditure to boost their percentages above the base line. The expenditure outlined in second column of table given above had to come from their own budget outlays.
Though we don’t hear about them anymore, the performance and results of this scheme had been quite satisfactory. According to a press release published by Press Information Bureau in March 2011, various states reported a significant increase in their agricultural outlays after four years of its implementation. Chhattisgarh, Tripura, Bihar, Maharashtra and Orissa reported triple-digit percentage jumps ranging between 400% – 800% in their outlays. However, just like many other good deeds of UPA government this one too didn’t earn enough attention.
So it turns out that UPA government remained successful enough in utilizing this scheme to boost country’s agriculture sector. Now it’ll be interesting to see how successfully NDA uses it to fight drought.
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