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Vibha Sharma
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. For the agriculture sector, the biggest takeaway from the Union Budget is the increase in credit limits for farmers by Rs 50,000 crore to Rs 8.5 lakh crore. There is also a determined focus on irrigation, with a Rs-5,300 crore allocation to reduce dependence on the erratic monsoon.
However, the specific mention by Finance Minister Arun Jaitley that he would personally monitor formation of a Unified National Agriculture Market is perhaps the most significant aspect from the farmers’ point of view to boost their incomes. Jaitley said he would work with states, in NITI, for the creation of a national agricultural market. This means the Centre intends to decidedly pursue its formation — something which was also recommended by the Economic Survey. “While the farmer is no longer in the clutches of the 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 the incidental benefit of moderating price rises,” Jaitley said while wrapping up his speech on the sector
Notably the need for setting up a national market was emphasised in the last Budget and the Centre also took some steps to encourage states to develop farmer markets in towns to enable farmers to sell the produce directly. Control over agricultural markets is a domain of the state governments.
However, the Survey recommended “bold actions” to move from mere “persuasion” to using constitutional provisions for enacting legislation to set up the national common market for specified agricultural commodities.
Soil Health Card
The Budget takes care of two major factors critical to agricultural production — soil and water.
Along with the Soil Health Card Scheme to improve soil fertility on a sustainable basis, the FM also announced support to the Agriculture Ministry’s organic farming scheme – “Paramparagat Krishi Vikas Yojana” — aimed at irrigating the field of every farmer and improving water-use efficiency to provide 'Per Drop More Crop’.
Currently, more than two-third farmland is rainfed. Jaitley allocated Rs 5,300 crore to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana to boost irrigation to battle the erratic monsoon.
Rural development fund
Jaitley allocated Rs 25,000 crore in 2015-16 to the corpus of the Rural Infrastructure Development Fund set up under NABARD: Rs 15,000 crore for Long Term Rural Credit Fund; Rs 45,000 crore for Short Term Cooperative Rural Credit Refinance Fund; and Rs 15,000 crore for Short Term RRB Refinance Fund.
The government also clubbed 10 major schemes, including the National Food Security Mission, under the umbrella scheme "Krishionnati Yojana" to be implemented by states with a central assistance of Rs 9,000 crore during the 2015-16 fiscal.
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