Both the farmers and the agriculture sector have got a bonanza with the Centre announcing a slew of initiatives to make more funds available. The target for agriculture credit for 2015-16 has been set at ₹8.5 lakh crore compared to ₹8 lakh crore during 2014-15.

“Farm credit underpins the efforts of our hard-working farmers. I have, therefore, set up an ambitious target of ₹8.5 lakh crore of credit during the year 2015-16 which, I am sure, the banks will surpass,” said Finance Minister Arun Jaitley.

A senior manager at State Bank of India said the move was positive as banks are on course to achieve the target for the current year. “More farmers will get covered under this target and we will also see more investments in agriculture with this focus, which will definitely push growth in the sector.”

At present, farmers are availing themselves of crop loans up to ₹3 lakh at 7 per cent interest rate with an additional subvention of 3 per cent. So, the effective rate of interest for farmers who repay on time is 4 per cent.

Rural credit fund

With a special focus on small and marginal farmers, the Finance Minister proposed to allocate ₹25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in Nabard; ₹15,000 crore for Long Term Rural Credit Fund; ₹45,000 crore for Short Term Cooperative Rural Credit Refinance Fund; and ₹15,000 crore for Short Term RRB Refinance Fund. Jaitley also proposed an allocation of ₹5,300 crore to support micro-irrigation watershed development and the Pradhan Mantri Krishi Sinchai Yojana.

Jaitley said, “I urge the States to chip in substantially in this vital sector …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 income of farmers, it is imperative that we create a national agricultural market, which will have the incidental benefit of moderating price rises. I intend this year to work with the States, in NITI, for the creation of a Unified National Agriculture Market.”

Thrust on reforms

The focus is on development of agriculture with emphasis on reforms, credit facility and financial assistance.

Earlier this month, Prime Minister Narendra Modi launched the soil health card scheme in Suratgarh, Rajasthan. The scheme will provide all 145 million farm owners in the country with a soil health card in the next three years.

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