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Union Budget 2018 Fails Farmers, Rivers & Environment

Finance Minister Arun Jaitley presented the last full budget of the Modi-led National Democratic Alliance (NDA) government at the Center on February 1, 2018. Considering the impending elections and the prospects of facing the elections next year (possibly earlier as some speculate), one thought the Budget will try to do justice to the promises the Bharatiya Janta Party (BJP) made to the people in 2014 elections, particularly to farmers, about Ganga and other rivers.

The Union Minister for Finance and Corporate Affairs, Arun Jaitley along with the Minister of State for Finance, Shiv Pratap Shukla arrives at Parliament House to present the General Budget 2018-19, in New Delhi on February 1, 2018.

Modi has just returned from Davos where he said climate change is one of the biggest challenges of future. So, one expected that the budget will also have something on the environment and climate change. Even the Economic Survey 2017 put out on January 29, 2018, was focused on climate change impact on farmers. Considering the Rural distress that got reflected in Gujarat election results in Dec 2017, one expected credible and substantial better deal for villages and agriculture.

Unfortunately, we are most disappointed in all these aspects.

The speech was not only full of a lot of politically incorrect statements but lacked substance to inspire confidence. The track record of the government has been so poor that such empty words are not going to help convince anyone.

Let us look at some key aspects.

Ease of leaving?

It’s well known that this govt is focused on improving the ease of doing business, but has done little by way or ease of living for the farmers, common rural or urban people. The finance minister, in the very beginning of the speech, said: “Now, our Government has taken Ease of Doing business further by stress on ‘Ease of Leaving’ for the common men of this country, especially for those belonging to the poor and middle class of the society.” Providentially, living was misspelled as leaving or is the govt interested in helping “the common men of this country” leave (the world) more easily?

More groundwater use rather than regulation and augmentation?

It’s now well known that groundwater is India’s water lifeline, though the government has not found it useful to accept that reality. It’s equally well known that the groundwater use is unsustainable at most locations, including the Indus and Ganga plains.

We need credible measures to recognize, protect and rejuvenate groundwater recharge zones, augment recharge and most importantly, regulate groundwater use. This government has done nothing effective in these directions. Instead, the Budget now has a new scheme to increase groundwater use, see paragraph 44 of finance minister’s speech: “Groundwater irrigation scheme under Prime Minister Krishi Sinchai Yojna – Har Khet ko Pani will be taken up in 96 deprived irrigation districts where less than 30 percent of the landholdings gets assured irrigation presently. I have allocated Rs 2600 crore for this purpose.”

 This norms of districts where less than 30 percent of the landholdings get assured irrigation presently can be very misleading. For example, in Maharashtra, a state with by far the highest number of large dams in the country, has less than 20 percent of cropped land under irrigation. So most districts of this state may come under this norm, even though they may already be overexploiting groundwater. Now, this scheme can be used to further increase the groundwater exploitation.

Economic Survey uses misleading irrigation parameters

While the budget does not have anything more substantial about irrigation, its noteworthy that the Economic Survey 2017 released on January 29, 2018, makes use of a rather strange ratio of Net Irrigated Area over the gross cropped area to compare states, see fig 6 on page 109 in Volume II, Chapter 6.

This is a patently misleading and wrong parameter to use. So even through Haryana is better off than Uttar Pradesh in terms of irrigation in all seasons, it seems, going by this parameter, to be performing worse than Uttar Pradesh, since Uttar Pradesh possibly has less area under double or multiple cropping. This is because, for Haryana, since there is more area under multiple cropping, the denominator becomes high, bringing down the ratio. One has never seen the use of this parameter and its mystery why this has been used.

Ganga and other rivers 

Prime Minister Modi is known to have given high priority for Ganga and declared after winning the 2014 parliamentary elections that Mother Ganga has called me. Unfortunately, the state of Ganga has only worsened under this government, even more than earlier government since its business priority even for Ganga.

So the high investment, but river destroying schemes like Inter Linking of Rivers (Ken Betwa, their top priority scheme is in the Ganga basin), Big dams (World’s tallest ever dam, Pancheshwar is in Ganga  basin), Water ways (National Waterways I is in Ganga basin and they are already doing massive, destructive dredging, river ports and so on, without any environment or social impact assessment or public consultation process), River Front Development, Big Sewage Treatment Plants and sew lines, to name some, are their priority.

The holy Varuna river, from which Varanasi derives its name, looks like a toxic drain with garbage dump on its banks. The river meets Ganga in this state.

The Budget had to mention Ganga, so it makes a run-of-the-mill statement in paragraph 66: “Cleaning the Ganga is work of national importance and it is our firm commitment. Members will be happy to learn that this work has gathered speed. A total of 187 projects have been sanctioned under the Namami Gange programme for infrastructure development, river surface cleaning, rural sanitation and other interventions at a cost of Rs 16,713 crore. 47 projects have been completed and remaining projects are at various stages of execution. All 4465 Ganga Grams – villages on the bank of the river – have been declared open defecation free.”

So four years into the government, they are still talking about “firm commitment”, while the state of the river has only gone worse, majorly due to their own actions and inactions. There is no mention of other rivers at all.

Farmers getting 50% return on cost 

The finance minister said in paragraph 13: “In our party’s manifesto it has been stated that the farmers should realize at least 50 percent more than the cost of their produce, in other words, one and a half times of the cost of their production. The government has been very much sensitive to this resolutions and it has declared minimum support price (MSP) for the majority of rabi crops at least at one and a half times the cost involved. Now, we have decided to implement this resolution as a principle for the rest of crops. I am pleased to announce that as per pre-determined principle, Government has decided to keep MSP for the all unannounced crops of Kharif at least at one and half times of their production cost. I am confident that this historic decision will prove an important step towards doubling the income of our farmers.”

A farmer grieves over his crops lost to the untimely hailstorm in Maharastra.

The claim that this promise of at least 50 percent return on cost for farmers has been achieved for Rabi crops, is clearly wrong. Even the Economic Survey released three days back clearly says that real incomes of farmers has NOT increased in last four years and thus contradicts the FM’s claim. Secondly, four years into the government, the government still has no clue how they are going to achieve this objective for Kharif or summer crop.

The finance minister also says in paragraph 11: “Honourable Prime Minister gave a clarion call to double farmers’ income by 2022 when India celebrates its 75th year of independence.” While the economic survey has confirmed that real income of farmers has not increased in last four years, and this budget, the last one of this government, has no credible steps to achieve that. So this government is going to leave farmers worse off than what they were, leave aside the question of doubling their income and if they go to voters saying give us a chance, we will do it by 2022, that won’t have much credibility either.

Impact of climate change on farmers’ income 

The Economic Survey 2017 brings more bad news for farmers. It says: “A second key finding is that these impacts are significantly more adverse in unirrigated areas (and hence rain-fed crops) compared to irrigated areas (and hence cereals). Applying these estimates to projected long-term weather patterns implies that climate change could reduce annual agricultural incomes in the range of 15 percent to 18 percent on average, and up to 20 percent to 25 percent for unirrigated areas.” (Ch 6, Vol 1, p 82)

Now look at the Budget 2018 in this context and we find that the Budget has nothing to offer to farmers for these losses, and yet repeats its hollow promise of doubling the income! In fact, the govt even refuses to acknowledge that farmers are climate change victims, nor demand that farmers be compensated for the losses.


The Budget has nothing to offer for the environment. Even its promise of scheme for incentivising use of machines in Punjab, Haryana, Uttar Pradesh and National Capital Region in paragraph 35 which states, “a special scheme will be implemented to support the efforts of the governments of Haryana, Punjab, Uttar Pradesh and the NCT of Delhi to address air pollution and to subsidise machinery required for in situ management of crop residue”, is without substance, sustainable development, democratic governance, equity or participatory or transparent decision making.

On the whole, the Budget ends up being lackluster, neither populous nor helping ease of doing anything particular.

Not even ease of leaving? You decide that.

Himanshu Thakkar is the coordinator of South Asia Network on Dams, Rivers, and People (SANDRP) and has been associated with the water and environment sectors for more than two decades. He can be reached at

This post was originally published here

Download Economic Survey 2017-18 Vol 1 Economic Survey 2017-18 Vol_2 Budget Highlights 2018 Union Budget 2018

Himanshu Thakkar

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