Honest farmers to be benefited

The existing interest subvention scheme of providing short term crop loans to farmers at 7 per cent interest will be continued during 2011-12, Mukherjee said in his budget speech amid thumping of tables by UPA members.

“In the last budget, I had provided an additional 2 per cent interest subvention to those farmers who repay their crop loans on time. The response to this scheme has been good. In order to provide further incentive to these farmers, I proposed to enhance the additional subvention to 3 per cent in 2011-12. Thus, the effective rate of interest for such farmers will be 4 per cent per annum,” he said.

The government increased the credit target for agriculture sector by Rs 1 lakh crore. With this, the target of credit flow to farmers will go up from the existing Rs 3,75,000 to Rs 4, 75,000 in 2011-12. The minister said the government had instructed banks to step up direct lending for agriculture and credit to small and marginal farmers.

The minister announced that the Centre was in the process of finalisation of the proposed National Food Security Bill and it will be introduced in Parliament this year.

The bill which promises to provide cheap food grains to the poor was hanging in balance due to differences between the government and National Advisory Council headed by Congress President Sonia Gandhi about how much beneficiary it would be covered under the scheme. The government said for social sector Rs 1,60,887 crore allocation has been made and which is an increase of 17 per cent current year.