NEW DELHI: To appease million of farmers in wake of high inflation and several corruption scandals hitting the UPA II, Union Finance Minister Pranab Mukherjee on Monday proposed higher allocation for farm sector when he presented the Union Budget for 2011-12.
Mukherjee had allocated funds to boost farm productivity and as well as to help small and marginal farmers access higher credit.
However, experts feel Mukherjee has done a great job by not allowing foreign direct investment in retail sector.
“Finance minister has not done any big harm to agriculture in the country as he did not announce anything on FDI or in retail sector in the Budget. The retail FDI — wherever it has been introduced, whether it is in the US, Europe and South America — it has destroyed small farmers,” farm expert Devender Sharma told Express.
Mukherjee also made a significant announcement that would address issues related to hunger and malnutrition. He announced the government was close to finalising the National Food Security Bill, which would be introduced in Parliament during the course of this year.
Mukherjee’s proposal to allocate a few crores, including `300 crore each for vegetables, nutri-cereals (ragi, bajra and jowar), promotion of edible oil, launch of National Protein Mission, acclerated fodder development programme, boosting pulses production and `400 crore for second Green Revolution in Assam, West Bengal, Orissa, Bihar, Jharkhand, Eastern Uttar Pradesh and Chattisgarh, has also been welcomed.
“The allocation is little. But it will give these sectors a renewed focus,” Sharma added.
Further, the minister announced reduction in interest rate to four per cent for farmers who repay loans on time and raised agri-credit target by a whopping `1 lakh crore to boost investments in the sector.
Emphasising upon the need for affordable credit to farmers, he announced an “additional subvention to three per cent in 2011-12” for those farmers who repayed on time. “Thus, the effective rate of interest for such farmers will be four per cent per annum,” Mukherjee said. The government decided to continue with the existing scheme of providing short-term crop loans to farmers at seven per cent for the next fiscal.
To increase investment in farm sector, the finance minister raised agri-credit lending target for banks to `4,75,000 crore for 2011-12 from `3,75,000 crore this year, with special focus on small and marginal farmers.
To reduce 40 per cent wastage of fruits and vegetable, the Budget announced setting up of 15 more mega food parks next fiscal. It exempted excise duty on equipment used in cold storage. Mukherjee also asked the State governments to reform the Agriculture Produce Marketing Act soon.