Nabard terms budget proposals for farm as 'positive, timely'

It welcomed the budget saying it will get capital investment into agriculture

Rural development lender Nabard today welcomed Budget proposals for farm sector terming them "very positive and timely" that will help rural economy.

"It is a very positive Budget which addresses the needs like those of smaller landholdings, and getting capital investment into agriculture," National Bank of Agriculture and Rural Development (Nabard) chairman HK Bhanwala told PTI.

Welcoming continuation of earlier measures like allotting additional resources under the rural infrastructure development fund (RIDF), he stressed that it is the new set of measures which are the most encouraging.

Bhanwala specifically pointed to the Rs 200-crore allocation to producer organisations, saying it is the need of the hour, given the reducing landholdings and the need for the smaller farmers to come together.

On the Rs 5,000-crore allocation for long-term farm credit, he said going beyond the short-term credit is also a very welcome move and will make farming much more productive. "Capital formation is the need of the hour and it is good that such moves have been initiated to ensure that," he said.

Apart from that the target to form 5 lakh more joint liability groups of farmers will also be very helpful given the fact that the number of landless farmers is increasing.

"We have already formed over 4 lakh such groups and will have to more than double it now. Coming together helps farmers access credit from banks," he said.

The stress given on storage of grains through the proposals on warehousing like allocating Rs 5,000 crore for the warehousing infrastructure fund is also welcome, given the needs around food security, he said.

Bhanwala also welcomed the ten-fold increase in the corpus under the short term cooperative rural credit (STCRC)-refinance fund to Rs 50,000 crore, saying this will help Nabard avoid its high cost of borrowings.

Additionally, he said there are a lot of indirect measures like the revised financial inclusion plan which envisages two accounts per family, that will also help the rural economy through better savings, he said.