Government banks on larger agri credit pie in times of farm unrest
The budget sets the agricultural credit target at `16.5 lakh crore, up from `15 lakh crore in FY21
Finance minister Nirmala Sitharaman said, “We will focus on ensuring increased credit flows to animal husbandry, dairy, and fisheries”.
Budget FY22 sets the agricultural credit target at `16.5 lakh crore, up from `15 lakh crore in FY21. Presenting the Budget, finance minister Nirmala Sitharaman said, “We will focus on ensuring increased credit flows to animal husbandry, dairy, and fisheries”. While the 10% increase is expected to boost farmers’ access to institutional credit, especially with coverage extended to allied activities of the agri sector, the FY21 actual disbursal stood at `11.3 lakh crore as of December 31, 2020.RELATED NEWS
She highlighted how the Centre had increased the MSP for a range of crops and had stepped up procurement of cotton, jute, copra, pulses and oilseeds, in addition to wheat and rice, over the past six years. Against the increased procurement of pulses and oilseeds since 2013-14, the FY 2022 allocations for two schemes for these crops — PM Aasha and Price Support Scheme/Market Intervention Scheme (PSS/MIS) — has been cut by 20% and 25%, respectively, to `400 crore and `1,500 crore, from the FY21 BE. Both the schemes promise to pay up to 25% of losses, if any, to Nafed, the procurement agency, in buying of copra, pulses and oilseeds at MSP from farmers and selling in the open market. Farmer protests have put pressure on the Centre to withdraw the recently enacted farm laws and guarantee MSP through legislation.
With a more realistic picture emerging from farmers’ enrolment data for the PM Kisan Samman Nidhi — only 11.5 crore farmers have signed up for the scheme that gives an income support of `6,000 per year, against the government’s estimate of 14 crore, and 10.5 crore have received the amount due after verification — the Centre has brought down the allocation for the scheme to `65,000 crore, from the FY21 BE of `75,000 crore. The allocation for the Rural Infrastructure Development Fund (RIDF) has been raised by over 33% to `40,000 crore, and that for Micro Irrigation Fund (MIF) has been doubled to `10,000 crore. Under these schemes operated by Nabard, states get credit at subsidised interest rates to undertake developmental works. The off-take under RIDF was `16,365 crore and under MIF was `1,755 crore in the current fiscal (as of January 31).
The FM also said 1,000 more mandis will be added under the e-NAM, over the 1,000 already connected. Against the backdrop of the protesting farmers voicing apprehension that mandis run by the Agriculture Produce Market Committees (APMCs) will close down following the implementation of the new farm laws — the Centre has categorically assured the contrary — APMCs could avail of the `1-lakh-crore Agriculture Infrastructure Fund announced last year under the Atmanirbhar Bharat umbrella.
Source : Financial Express, Feb 01, 2021 , Prabhu Datta Mishra