Major thrust sought to step up the flow of institutional credit to farmers
In a bid to restore agricultural growth to the level of 4 per cent achieved in recent years, Finance Minister Pranab Mukherjee proposed a significant 30 per cent increase in allocation for the agriculture ministry’s flagship scheme, Rashtriya Krishi Vikas Yojna (RKYJ). Assistance is provided under this scheme to the states to cover the critical gaps in the process of agricultural development.
The outlay for the Accelerated Irrigation Benefit Programme (AIBP) too has been stepped up by a whopping 75 per cent to help achieve the same objective by bringing more area under assured irrigation.
Besides, the finance minister has proposed a higher target for the flow of institutional credit to farmers at the subsidised interest rate of 7 per cent by offering interest subvention to banks and financial institutions.
The total Central plan outlay for the agriculture and allied sectors has been raised by Rs 555 crores from Rs 10,074 crore (budget estimates) in 2008-09 to Rs 10,629 crore for 2009-10.
This is Rs 660 crore higher than the 2008-09 revised estimates of Rs 9,969 crore.
The outlay for RKYV has been earmarked at Rs 4,100 crore for 2009-10, up 30 per cent from 2008-09. This is in accordance with the recommendation made to this effect by the National Development Council to ensure sustained 4 per cent annual growth in agriculture in the 11th Plan.
AIBP, which aims at speedy completion of on-going irrigation projects held up for paucity of funds, has been given an additional Rs 1,000 crore over the interim budget estimate, marking an increase of 75 per cent over the 2008-09 allocation.
A major thrust has been sought to be provided in this budget to step up the flow of institutional credit to farmers.
The target for the disbursement of credit has been fixed at Rs 3,25,000 crore for 2009-10, against the actual disbursal of Rs 2,87,000 crore in 2008-09.
The finance minister announced continuation of the interest subvention scheme for short term crop loans to the farmers for credit up to Rs 3 lakh per farmer at the interest rate of 7 per cent a year.
To assuage the feelings of the farmers who had not benefitted from last year’s farm debt waiver scheme because of timely repayment of their loans, the finance minister announced an additional subvention of 1 per cent so that these farmers could get loans at an interest rate of 6 per cent.
An additional budgetary provision of Rs 411 crore has been provided for this purpose in the 2009-10 budget.