Centre hikes farm credit

The Centre on Saturday hiked to Rs 8.5 lakh crore the target for disbursal of farm credit and made significant allocations to Prime Minister Narendra Modi’s pet irrigation schemes to boost agricultural productivity.

At the outset, Finance Minister Arun Jaitley acknowledged that farm incomes were “under stress” across the country and posed a key challenge to the government.

“Increase in agricultural productivity and realisation of reasonable prices for agricultural production is essential for the welfare of rural areas,” Jaitley said presenting the General Budget in Parliament.

Jaitley allocated Rs 5,300 crore to the Pradhan Mantri Gram Sinchai Yojana — the government’s flagship irrigation programme to cover more than 60 per cent of farm land that depends on rainfall.

“Farm credit underpins the efforts of our hard-working farmers. I have, therefore, set up an ambitious target of Rs 8.5 lakh crore of credit during the year 2015-16 which, I am sure, the banks will surpass,” Jaitley said.

In a bid to free the farmer from the clutches of the local trader, Jaitley announced plans to create a national agriculture market that will have incidental benefit of moderating price rises.

“I intend this year to work with States, in NITI, for the creation of a Unified National Agriculture Market,” he said.

Single market

To begin with, the Agriculture ministry has asked state governments to declare the entire state as a single market with one licence valid across the entire state. The Centre has also asked states to remove all restrictions on movement of agriculture produce within the state.

To support agriculture sector with the help of effective and hassle-free agricultural credit with special focus on small and marginal farmers, Jaitley allocated Rs 25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund set up under Nabard.

Jaitley also announced an allocation of Rs 15,000 crore for long-term rural credit fund, Rs 45,000 crore for short-term cooperative rural credit refinance and Rs 15,000 crore for short-term regional rural banks refinance fund.