Agriculture, rural infrastructure need more investment: Jaitley

Finance Minister Arun Jaitley on Sunday called for higher investment in rural infrastructure and agriculture, saying the sector was plagued by a series of handicaps like inadequate irrigation, high indebtedness and climate change impact.

"With productivity levels reasonably low and 85 percent farmers being small and marginal, the agriculture sector is afflicted by higher input costs, low level of irrigation, high indebtedness, absence of an effective insurance mechanism and adverse impacts of climate change," Jaitley said at a Nabard symposium here on "Mitigating Agrarian Distress and Enhancing Farm Income".

Observing that India has been unable to ensure even a consistent four percent growth in agriculture, the finance minister said that despite the challenges, Indian farmers have been able to attain self-sufficiency in foodgrains.

India's sown crop area during the ensuing Kharif season was up over 60 percent as on July 10 over the like day of the previous year, official data showed on Friday.

"The total Kharif sown area as on July 10, as per reports received from states, stands at 445.11 lakh hectare as compared to 275.10 lakh hectare on the day last year," said a statement from the agriculture ministry.

Jaitley said a large chunk of investment needs to be channelised into rural infrastructure development, with special emphasis on irrigation.

"States like Madhya Pradesh which have invested in irrigation have seen almost immediate results. It is this example we need to emulate," he said.

The government has launched the ambitious Pradhan Mantri Krishi Sinchayee Yojana, entailing an investment of Rs.50,000 crore over a period of five years, he added.

Jaitley also informed that the government is working on a viable insurance programme for the farm sector, saying that Ashok Gulati, Infosys' chair professor for agriculture at ICRIER had made a presentation to the government on an effective insurance programme whereby the farmer is able to recover cost of basic inputs in the event of crop failure.

In this connection, he said "the choice that we are making between higher growth or redistribution of resources is actually a false choice".

"We need higher growth on one hand and targeted schemes and policies are needed to ensure that the benefits of growth reach those who have been left out," the minister said.

Expressing hope that the monsoon would be as good as it was last month, Jaitley said the department of agriculture expects better rainfall in most parts of India for higher yields of oilseeds and pulses, whose prices are currently a concern in terms of inflation.

"I hope their estimates turn out to be true," he said.