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V. Sajeev Kumar

Kochi, March 6 The importance of giving prominence to the agriculture sector in line with other segments of the economy like industry, services and infrastructure was the focal point of the panel discussion on the Union Budget organised by BL Club at the School of Communication and Management Studies (SCMS) here.

Setting the tone for the discussions, Mr Venugopal C. Govind, a Kochi-based Chartered Accountant, stressed the need for a strong political decision to revive the agricultural sector as well as to enhance its productivity, which remains very low compared to global standards. Agriculture, according to him, has always become a matter of concern even though it has tremendous potential for growth. “As we talk about double-digit growth for the manufacturing sector, it can be possible to achieve the same in the agriculture sector provided the Government gives the necessary thrust,” he said.

However, more efforts would be needed to make agriculture an economic activity in the country. To achieve this, Mr Govind suggested public-private partnership in various activities and the need for Government-people participation.

Introduction of newer technologies and strengthening of research activities for specialised farming techniques should also be extended to make the sector more vibrant. He was also of the view that substantial research activities taking place in the manufacturing sector should be transferred to the farming sector in order to derive its benefits.

Mr Babu A. Kallivayalil, Member of the South India Regional Council of ICAI, strongly defended the waiver of agriculture loans in the Budget, saying that it would ensure relief to small and marginal farmers and also boost production.

The waiver of agriculture loans may be a political decision and there is a general impression that political decisions may not be economically correct. That doesn’t mean that all political decisions are economically wrong, he said.

According to him, the immediate beneficiaries of the loan waiver schemes is the banking companies on account of the reason that most of these loans are NPAs as on December 31, 2007 and have been provided for the loss as per RBI norms. These loans even otherwise would have been unrecoverable and the banks would have been forced to write off a major part of these loans.

Since loss on account of these small agriculture loans are already absorbed in the banks account, the amount which will be granted by the Government is going to be taken to the profits of the banking companies.

NPAs are not from the agricultural sector alone; it is much more in the non-agriculture sector. However, over the period, these NPAs are written off without much fanfare, he said.

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