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Impact of Budget on Agriculture Sector

IndianMoney.com Research Team | Posted On Tuesday, July 07,2009, 01:20 PM

Impact of Budget on Agriculture Sector

 

 

Our Finance minister Mr. Pranab Mukherjee has announced different schemes for the development of the agriculture sector in the Union Budget 2009 - 2010. This includes schemes like financial support on interest available for short term crop loans, increase in allocation for Rashtriya Krishi Vikas Yojna (RKVY), Food Security Bill, etc. The target for agriculture credit flow has been increased to Rs. 3,25,000 crore.

The target for agriculture credit flow
 
2009 – 2010 (Current year)
2008 – 2009 (Last Year)
Rs. 3,25,000 crore
Rs. 2,87,000 crore
 

Agricultural Schemes

The financial support on interest available for short term crop loans up to Rs. 3 lakh per farmer will continue and an additional support of 1% will be paid from this year to those farmers who repay such loans on schedule.   Thus, the interest rate for these farmers will come down to 6% per year.

Under the farm loan waiver scheme of Rs.71,000 crore implemented in the last budget, the time for paying 75% of over dues has been extended to 31st December, 2009. A Taskforce is being set up to suggest the course of action regarding farmers of some regions of Maharashtra who have taken loans from money lenders and the loan waiver scheme did not cover them.

The allocation for Rashtriya Krishi Vikas Yojna (RKVY) is being stepped up by 30 per cent and that for speed up Irrigation Benefit Programme by 75% over the allocation last year.

To ensure balanced application of fertilizers, the Government intends to move towards a nutrient based subsidy regime instead of the current product pricing regime. It will lead to availability of innovative fertilizer products in the market at reasonable prices and attract fresh investments in this sector. In due course, it is also intended to move to a system of direct transfer of subsidy to the farmers.

See Also: How to calculate agriculture income tax?

The Finance Minister announced that the draft Food Security Bill will soon be put on the net for public debate and consultations. The proposed National Food Security Act will ensure that every family living below the poverty line (BPL) in rural or urban areas will be entitled by law to 25 kilos of rice or wheat per month at Rs. 3 per kilogram. 

We need a separate budget for agriculture just like we have it for railways. Outmost importance has to be given to agriculture to promote usage high tech technology, increase land ownership, help conserve water and connect Indian farmers with national as well as global markets to know price movements and demand of different agricultural commodities.

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