Friday, March 16, 2012

Agri credit target raised by Rs 1 lakh Cr for 2012-13

Underlining farm sector's priority, the govt on Friday announced Rs 1,00,000 crore increase in the agriculture credit target for the next fiscal and also raised the outlay for the key sector by 18 pc to Rs 20,208 crore.
The allocation has also been raised to an irrigation scheme by 13 percent to Rs 14,242 crore to boost investment in the irrigation projects with looming threat of water scarcity affecting farm production.

Import duty on farm equipments has been reduced to address problem of labour shortage in the agriculture sector.

"Farmers need timely access to affordable credit. I propose to raise the target for agricultural credit in 2012-13 to Rs 5,75,000 crore. This represent an increase of Rs 1 lakh crore," Finance Minister Pranab Mukherjee said in his Budget speech. The target for this fiscal is Rs 4,75,000 crore.

Unlike last few Budgets, the minister did not reduce the interest rate on crop loans for those farmers who pay on time. The interest rate was kept unchanged at 4 percent per annum.

The minister allocated Rs 10,000 crore to the National Bank for Agriculture and Rural Development (NABARD) for refinancing regional rural banks (RRBs) to disburse short-term crop loans to small and marginal farmers.

Stating that Kisan Credit Card (KCC) is an effective tool to provide credit to farmers, Mukherjee said that the scheme will be modified to make KCC smart cards to be used at ATMs.

"Agriculture continues to be a priority to the government. The total plan outlay for agriculture and cooperation has been increased by 18 per cent from Rs 17,123 crore in 2011-12 to Rs 20,208 crore in 2012-13," Mukherjee said.

The Budget allocation for important scheme like Rastriya Krishi Vikas Yojana (RKVY) and the Bringing Green Revolution in Eastern India (BGREI) have also been increased by Rs 1357 crore and Rs 600 crore, respectively.

The allocation for BGREI scheme has been increased to Rs 1,000 crore in the 2012-13 fiscal, while the outlay for RKVY programme rose to Rs 9,217 crore from Rs 7,860 crore. Under RKVY, Rs 300 crore has been proposed for irrigation projects in Vidarbha region.

Barring RKVY and BGREI, the government has decided to merge rest of the schemes related to agriculture into set of five missions to achieve the desired growth of 4 percent in the 12th Five Year Plan period.

These five missions are: National Food Security Mission, National Mission on Sustainable Agriculture including Micro Irrigation, National Mission on Oilseeds and Oil Palm, National Mission on Agricultural Extension and Technology and National Horticulture Mission.

A sum of Rs 200 crore has been set aside to incentivise scientific research to raise farm yields and develop seed varieties that are resistant to climate change.

With rising demand of protein-based foods, the government has strengthened mission for protein supplement by launching a scheme Rs 2,242 crore with World Bank assistance to improve productivity in the dairy sector. Suitable allocations have been made for fish, poultry, piggery and goat rearing.

In a bid to curb rising labour shortages in view of MGNREGA, the government has proposed to cut the import duty on wide range of farm equipments like sugarcane planter and coffee processing machines.

"Carrying forward the initiatives taken for agriculture and agro-processing in the previous Budgets, I propose to reduce basic customs duty from 7.5 per cent to 2.5 per cent on sugarcane planter, root or tuber crop harvesting machine and rotary tiller and weeder," Mukherjee said.

Mukherjee announced reduction in the import duty from 7.5 percent to 5 percent on specified coffee plantation and processing machinery.

To boost production of fruits and vegetables, the Finance Minister said the project import benefit at concessional import duty of 5 percent would be extended to green house and protected cultivation of horticulture and floriculture crops.

That apart, the concessional import duty, which is available for installation of Mechanised Handling Systems and Pallet Racking Systems in mandis or warehouses, is also extended to horticultural produce.

To boost domestic fertiliser output, the government has fully exempted import duty of 5 percent on equipment for new and brownfield fertiliser projects, for a period of three years up to 31st March 2015.

Mukherjee also proposed to provide weighted deduction of 150 percent on expenditure incurred for agri-extension services in order to facilitate agri-growth.

Besides, the government has increased investment linked deduction on capital expenditure incurred to set up cold chain facility and warehouses for storage of foodgrain from 100 percent to 150 percent.

Bee keeping and warehousing for storage of sugar would also eligible for this deduction.

In order to boost private investment in the farm sector, the budget proposed that irrigation, terminal markets, common infrastructure in agriculture markets and soil testing laboratories would be eligible for Viability Gap Funding.

In order to reduce post-harvest losses, he announced that farmers would also be eligible to get post-harvest loans up to six months at 4 percent interest rate against warehouse receipt.

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