National Council of Applied Economic Research
Opinion: Saurabh Bandyopadhyay, Jigisha Sharma and Shalini Aggarwal.
The Union Budget 2024-25 increased the allocation of agriculture by 4.6%, i.e., Rs 1,32,469.9 crore from Rs 1,26,665.6 crore in the Revised Estimates (RE) of 2023-24. However, if we include allocation for the allied sector as well, the total allocation becomes Rs 1,39,607.5 crore.
Agriculture is considered backbone of the economy, with a little over 18% share in current GDP, but employing over 42% workforce. In this scenario, the allied sector’s contribution is more promising and on the rise amidst the buoyant performance of the overall agriculture. Among livestock sector, dairy is one of the proficient areas that needs critical focus. Though India is having highest production of milk, milk yield per animal and quality of milk continued to be a concern.
The Budget 2024-25 has been proven beneficial for the allied activities. The government has allocated a budget of Rs. 4521.2 crores for Department of Animal Husbandry and Dairying (DAHD) whereas, for Department of Fisheries (DoF), the budget allocation is Rs. 2616.4 crores. A remarkable rise of around 15.5% (compared to 20223-24 RE) in the budget allocation can be witnessed for DAHD. Similarly, DoF has also been able to get more funds for its development by quite a high margin of 53.8% (compared to 2023-24 RE). Overall, percentage change for this Ministry in terms of increment in the budget allocation has been observed to be 27.12% compared to 2023-24 RE.
From the Expenditure Profile of DAHD, it is inferred that the Government is aiming towards giving more importance to the Institutions as they play a vital role in advancing dairy production, animal health, and related activities. Moreover, sectoral competitiveness can be achieved only through the supply of skilled workforce as a critical success factor and also for creating social impact. From the data, we can observe that there has been a significant increase in the budget allocation for Institutes by 9.8% compared to 2023-24 RE. What is noteworthy is that the Government is in cognizance of the fact that for growth of the economy, providing employment opportunities is of utmost importance and this sector is fully capable of employing people with certain qualifications, and skills. Therefore, by investing in these Institutes, it is ultimately supporting enterprise activities and paving the way for a seamless adoption of technologies which is yet to unleash the full potential of this sector.
For the schemes, the government has been repeatedly increasing the budget allocation YoY. If we compare the data, we can witness that there was a massive increase by about 112.3% in the budget allocation for Central Sector Schemes (CSS)/projects from RE 2023-24 to BE 2024-25, which is a huge jump from 77.4% recorded in the past year.
Remarkable changes can be observed for Dairy Development and Rashtriya Gokul Mission as after a couple of years, the Centre has allocated a sum of Rs. 371 crores and Rs. 700 crores each under CSS. Prior to FY2024-25, they were being provided funds under CSS. Dairy Development Project serves an imperative role in enhancing the milk quality and production. It concentrates on building and enhancing the infrastructure for high-quality milk testing equipment and promote dairy cooperatives. This also aids in encouraging more rural women to form SHGs and enter this sector as Dairy Entrepreneurs and thereby empower women.
The Rashtriya Gokul Mission Scheme holds similar significance in the preservation of India’s native bovine breed. By funding this program, they hope to increase the productivity of the cows by introducing cutting-edge technologies and cutting-edge scientific techniques like artificial insemination. If this plan is successful, dairy technology will see a technological advancement. This would encourage more skilled professionals to join, particularly women, and contribute to the growth of the cattle industry, which would help small and marginal farmers.
Despite being the world’s largest producer of milk, India accounts for only o.25% of the world’s total dairy exports, amounting to just $272.65 million with Germany leading the trade by a humongous margin (Eximpedia, 2024). One of the prime reasons being the unused potential of the bovine population. A latent prospect lies in the field of technology and science which can boost the productivity and increase the milk yield. The key is to provide training and knowledge dissemination among the workers to encourage innovation in milking techniques. This would encourage cost-efficiency and prove to be lucrative from the trade aspect.
The dairy industry’s success and sustainability are of utmost importance, and this budget could turn out to be a foothold in this direction by investing and strengthening the existing institutions and further promoting skilling among the workers that could generate performance-driven effort to redefine the sector and establish new benchmarks.
Saurabh Bandyopadhyay is Senior Fellow, Jigisha Sharma is Research Intern and Shalini Aggarwal is Executive(Research Projects) at NCAER. Views are personal.