The budget has a host of announcements that are vague and numbers that are unconvincing at a time the farm sector needs financial injection and fiscal inclusion.

Young Indians starting their careers in an environment devoid of hope and opportunity and surviving on dole are inclined to root for populist politics. The farming community, however, expects much more substance from the government and the 2014 budget was a good example of how populism trumped substantive policy. Yet, like his predecessors, Arun Jaitley chose not to clear the smokescreen over the government’s financial obligations as far as the agricultural community is concerned.

A sum of ₹73,000 crore has been allocated as fertiliser subsidy this year but the actual outgo could be as much as ₹85,000 crore. After clearing the backlog of last year’s unpaid fertiliser subsidy of ₹38,000 crore, the remaining ₹35,000 crore will run out by August. There is, thus, no provision for fertiliser subsidy for the Rabi sowing. Factor in an imminent doubling of gas price and the additional burden to the exchequer for urea subsidy alone could be ₹10,000 crore. The combined shortfall will certainly dent the fiscal deficit targets that the government has set for itself. Does the finance minister have other plans?

It is also significant that the finance minister candidly talked about reviewing the “urea policy” and not the “fertiliser policy”. Using the term “fertiliser policy” would mean reallocating the subsidy between different nutrients — phosphates and potash being the other two — to encourage the balanced use of fertilisers that is currently skewed towards urea, thanks to the heavy subsidy it gets. A review of the urea policy can mean a reduction in urea subsidies only. Not that this will happen immediately either; the Bharatiya Janata Party will undoubtedly wait till after the Maharashtra and Haryana Assembly elections before administering this bitter pill to the farming community.

Then again, the budget announcement of a meagre ₹56 crore allocation for the archaic idea of l00 mobile soil-testing vans leaves one flummoxed. The world has moved along to cheaper compact backpack soil-testing technologies. The country does not need 100 rickety vans but 4,000 advanced soil-testing units. Rather than list such small ideas in over two hours of the Budget speech, farmers would have preferred the finance minister to dwell a little more on the nuances of I₹800,000 crore of agriculture credit instead.

Legally, there is only a whiff of a chance that this will stand scrutiny owing to the fine print. For the record, however, most of this humongous amount is not coming to farmers. Members of Parliament and the public at large need to be made aware of the reality. In West Bengal, for instance, 54.7 per cent of agricultural credit is advanced by urban or metropolitan branches of banks. For Maharashtra, the corresponding figure is 46.3 per cent and in Tamil Nadu 33 per cent.

Some good ideas in the budget need follow-ups to be truly effective. For instance, the ₹5,000-crore “long-term rural credit fund” for refinance support to co-operative banks and regional rural banks is much appreciated. Short-term refinance to these banks is not applicable for interest subvention. The announcement that was really awaited was a capital infusion into these small banks to fulfil the Reserve Bank of India guidelines of nine per cent minimum capital adequacy norms. Otherwise, these banks will eventually close.

Providing finance to 500,000 joint family groups of Bhoomi Heen Kisan (landless farmers) through the National Bank for Agriculture and Rural Development (Nabard) is a landmark allocation. However, given the pace at which Nabard works, targeted families are unlikely to get any funds in this financial year. New programmes such as Skill India, Rurban mission, Neeranchal and Kisan TV are laudable, as are incentivising farmers markets. A price stabilisation fund could be one way to move away from the minimum support prices regime to a farmer income policy.

Farmers had desperately hoped for an effective crop insurance policy. A pension of ₹1,000 a month for the landless labour is quite a valid demand when compared to similar guarantees for the employees of the organised sector. The other word of caution is around projects like interlinking of rivers, which are — historically and technically — fraught with risk of delivering only half the target with cost overruns of over five times, on a conservative estimate. The ecological loss they entail will be also immeasurable.

As the Prime Minister gets ready to deliver his first Independence Day address, which is widely expected to contain many new policy announcements, it is important that he ignores the positive chatter emanating from the panel discussions on TV channels. They do not represent even a fraction of the largest section of Indian society. Neither should he be moved by the adulation of the industry associations, which have never opposed a budget speech in living memory. Only when change is all but done, do they start to find fault with government policies. It is those Indians who do not either follow the budget telecast, nor invest in stock markets nor even pay taxes that will be a decisive factor five years down the line. The government has lost an opportunity to articulate its intentions clearly or offer a sense of direction to that majority.