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Lending a hand for farmers
Debt relief: The Government shall pay an additional subvention of one per cent as an incentive to farmers who repay their short-term crop loans on schedule.
I now turn to agricultural development. Agriculture has been the mainstay of our economy with 60 per cent of our population deriving their sustenance from it.
In the recent past, the sector has recorded a growth of about 4 per cent per annum with substantial increase in plan allocations and capital formation in the sector. Agriculture credit flow was Rs 2,87,000 crore in 2008-09.The target for agriculture credit flow for the year 2009-10 is being set at Rs 3,25,000 crore.
To achieve this, I propose to continue the interest subvention scheme for short-term crop loans to farmers for loans up to Rs 3 lakh per farmer at the interest rate of 7 per cent per annum. I am also happy to announce that, for this year, the Government shall pay an additional subvention of one per cent as an incentive to those farmers who repay their short-term crop loans on schedule.
Thus, the interest rate for these farmers will come down to 6 per cent per annum. For this, I am making an additional Budget provision of Rs 411 crore over Interim BE.
The one-time bank loan waiver of nearly Rs 71,000 crore to cover an estimated 40 million farmers was one of the major highlights of the last Budget. Under the Agricultural Debt Waiver and Debt Relief Scheme (2008), farmers having more than two hectares of land were given time up to June 30 to pay 75 per cent of their overdues. Due to the late arrival of monsoon, I propose to extend this period by six months up to December 31.
It is learnt that in some regions of Maharashtra, a large number of farmers had taken loans from private money lenders and the loan waiver scheme did not cover them. The matter requires special attention.
To examine the matter in greater detail and suggest the future course of action, I propose to set up a taskforce.
Irrigation Programme
I propose to provide an additional Rs 1,000 crore over Interim BE for the Accelerated Irrigation Benefit Programme (AIBP), marking an increase of 75 per cent over the allocation in 2008-09 (BE).
The allocation for the Rashtriya Krishi Vikas Yojna (RKVY) is also being stepped up by 30 per cent over the Budget Estimates of 2008-09.
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