Government raises farm credit target to Rs 8.5 lakh cr for 2015-16

Last Updated: Saturday, February 28, 2015, 17:24

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New Delhi: The government on Saturday raised the farm credit target by Rs 50,000 crore to Rs 8.5 lakh crore, allocated Rs 5,300 crore for flagship irrigation programme and announced plans to set up a common agricultural national market to boost farmers' income that is "under stress".

The government has clubbed 10 major schemes, including National Food Security Mission, under the umbrella scheme "Krishionnati Yojana" to be implemented by states with central assistance of Rs 9,000 crore during the 2015-16 fiscal.

Another Rs 5,300 crore has been allocated to the Pradhan Mantri Gram Sinchai Yojana (PMGSY) to boost
irrigation as currently more than 60 per cent of farm land is rainfed.

Presenting his maiden full-fledged Budget for 2015-16, Finance Minister Arun Jaitley said, "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."

Farmers have been availing crop loans up to Rs 3 lakh at 7 per cent interest rate. However, the effective rate of interest for farmers who repay on time is 4 per cent.

Noting that farm incomes are under stress, Jaitely listed out raising farmers' income as one of the major challenges ahead for the government.

"While the farmer is no longer in the clutches of local trader, his produce still does not command the best national price. To increase the incomes of farmers, it is imperative that we create a National agricultural market, which 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.

Emphasising that raising productivity and realisation of reasonable price for agri-produce is essential for the welfare of rural people, Jaitley said, "We should commit to increase irrigation area, improve efficiency of distinct irrigation scheme, promoting agro-based industries for value addition, increasing farm income and reasonable prices for farmers produce."

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