Govt raises agri-credit target by Rs 1.25 lakh cr

Fund allocation to the Agriculture Ministry was raised by 22%

In a big boost to the farm sector, Finance Minister P Chidambaram on Thursday proposed a whopping Rs 1.25 lakh crore increase in agri-credit target for next fiscal at Rs 7 lakh crore and raised allocation to the ministry by a handsome 22 per cent.

Presenting the Union Budget 2013-14, Chidambaram provided an additional Rs 10,000 crore in food subsidy for implementing the proposed National Food Security Act.

While allocating Rs 27,049 crore for Agriculture Ministry for 2013-14 fiscal, the Minister announced three new schemes with an outlay of over Rs 1,000 crore for crop diversification in states covered under green revolution, promotion of nutritious crops and giving thrust to the livestock sector.

Asserting that agricultural credit is a driver of farm production, Chidambaram said: "We will exceed the target of Rs 5,75,000 crore fixed for 2012-13. For 2013-14, I propose to increase the target to Rs 7,00,000 crore".

The interest-subvention for short-term crop loan will be continued and farmers who repay loan on time will be able to get credit at 4 per cent interest per annum, he added.

However, he said, the scheme which so far is applicable to loans extended by public sector banks, Regional Rural Banks and cooperative banks, would now be extended to crop loans borrowed from private sector scheduled commercial banks.

On proposed National Food Security Law, Chidambaram hoped that the Bill would be passed by the Parliament soon and said: "I have set apart Rs 10,000 crore, over and above the normal provision for food subsidy, towards the incremental cost that is likely under the Act".

Concerned over stagnant crop yields in states like Punjab and Haryana, he proposed Rs 500 crore to encourage farmers to switch to alternative crops from traditional rice and wheat.