Budget gives 40 million farmers relief from debtFebruary 29th, 2008 - 6:42 pm ICT by admin
New Delhi, Feb 29 (IANS) India’s budget for 2008-09 Friday came as a bonanza for 40 million farmers with Finance Minister P. Chidambaram announcing a complete loan waiver to around 30 million small and marginal farmers and a one-time loan settlement to 10 million more. The implementation of the debt waiver for farmers with less than two hectares of land and debt relief, amounting to Rs.600 billion ($15 billion), will be completed by June 30 this year.
Chidambaram’s fifth consecutive budget presented in the Lok Sabha provided a total annual outlay for the agriculture ministry of Rs.144.76 billion.
“By the loan waiver scheme, the country is discharging a deep debt and sense of gratitude to farmers,” Chidambaram said, adding that the growth rate of agriculture was estimated at 2.6 percent in the current fiscal.
While the budget waives off loans completely for small farmers - about Rs.500 billion - the more affluent have got a one-time loan settlement facility with a 25 percent concession. This is likely to be Rs.100 billion.
The finance minister said agriculture loans given by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007, and due for Dec 31 that year would be covered under the waiver scheme to address the problem of indebtedness.
Chidambaram gave Rs.6.44 billion for the national agriculture insurance scheme.
He said agriculture loans restructured and rescheduled by banks from 2004-06 and other loans normally rescheduled under guidelines of the Reserve Bank of India (RBI) could also be covered by the waiver scheme.
The corpus of rural infrastructure development fund will be raised to Rs.140 billion, while a target of Rs.2.8 trillion for agriculture credit has been set for the coming year.
Duty on crude and unrefined sulphur will be reduced from five percent to two percent to help raise domestic fertiliser production to meet the growing demand from farmers.
With specific focus on coconut cultivation, Chidambaram announced the allocation of Rs.11 billion for the National Horticulture Mission, while Rs.750 million was given to the ministry of agriculture for providing mobile soil testing laboratories in 250 districts.
Chidambaram earmarked Rs.200 billion for irrigation projects, showing an increase of Rs.90 billion over the last fiscal, a core area identified in the Economic Survey 2007-08 presented Thursday.
According to the Economic Survey 2007-08, a second green revolution was necessary, particularly in rain-fed areas, to provide sustainable incomes to the country’s distressed farmers.
Over the years, the share of agriculture in gross domestic product (GDP) has sharply reduced to 18.5 percent in 2006-07 from 36.4 percent in 1982-83 — though it continues to support over 500 million people and provides employment to 52 percent of the country’s workforce.
The survey said the growth rate of food grain production decelerated to 1.2 percent in 1990-2007, lower than the annual growth of population pegged at 1.9 percent.
An official estimate says that over 60 percent of the country’s cultivable area depends on rain for agriculture. In order to raise the productivity of rain-fed areas, the government in 2006 set up the National Rainfed Authority of India (NRAI).
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