Budget 2013: Farm credit raised to Rs.7 trillion to boost output

Funds for rural development raised to Rs.80,000 cr; rural housing budget hiked; no change in MGNREGA allocation
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First Published: Thu, Feb 28 2013. 02 41 PM IST
The finance minister announced an allocation of `1,000 crore to support the green revolution in Assam, Bihar, Chhattisgarh and West Bengal that, he said, had increased their contribution to rice production. Photo: Ramesh Pathania/Mint
The finance minister announced an allocation of Rs.1,000 crore to support the green revolution in Assam, Bihar, Chhattisgarh and West Bengal that, he said, had increased their contribution to rice production. Photo: Ramesh Pathania/Mint
Updated: Fri, Mar 01 2013. 12 56 AM IST
New Delhi: Finance minister P. Chidambaram announced a slew of measures to boost farm output and allocated more funds for the rural development ministry that oversees social welfare programmes of the Congress party-led United Progressive Alliance government, including the rural employment guarantee scheme.
Compared with a budget estimate of Rs.73,175 crore for rural development allocated for 2012-13, the funds allocated for the ministry in 2013-14 have gone up to Rs.80,194 crore.
Funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme has been maintained at Rs.33,000 crore that is the same as in 2012-13.
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Funds for rural roads have dropped marginally from Rs.24,000 crore in 2012-13 to Rs.21,700 crore in the 2013-14 budget, but rural housing budget has been hiked from Rs.11,075.00 crore to Rs.15,184 crore.
“The ministry of rural development steers a number of flagship programmes. We estimate that they will be able to spend Rs.55,000 crore before the end of the current year, and I propose to allocate Rs.80,194 crore in 2013-14,” Chidambaram said in his budget presentation.
Earlier, the minister said the government’s goal was “higher growth leading to inclusive and sustainable development”, which he described as the “mool mantra” or fundamental principle.
To boost agricultural production, Chidambaram announced measures including an increase in farm credit to Rs.7 trillion in the budget for 2013-14 from Rs.5.75 trillion during the current year.
“The interest subvention scheme for short-term crop loans will be continued and a farmer who repays the loan on time will be able to get credit at 4% per annum,” the minister said. So far, this scheme has been applied to loans extended by public sector banks, rural and cooperative banks, the minister said, adding he was extending the scheme to crop loans borrowed from private sector scheduled commercial banks.
The finance minister announced an allocation of Rs.1,000 crore in the 2013-14 budget to support the green revolution in Assam, Bihar, Chhattisgarh and West Bengal that, he said, had increased their contribution to rice production.
He also announced a special allocation of Rs.500 crore for crop diversification in Punjab and Haryana that were facing problems of stagnating yields and over-exploitation of water resources.
For the welfare of small and marginal farmers in drought-prone and ecologically-stressed regions, Chidambaram announced an increased allocation of Rs.3,050 crore in 2012-13 to Rs.5,387 crore. “A credit guarantee fund will also be created in the Small Farmers’ Agri Business Corporation with an initial corpus of Rs.100 crore,” he said.
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First Published: Thu, Feb 28 2013. 02 41 PM IST
More Topics: Budget | rural | agriculture | Chidambaram |