New Delhi: The government will soon come out with a package to address the indebtedness of farmers, Prime Minister Manmohan Singh said on Friday, 15 February.
“We are looking into the credit needs of farmers. We cannot have a situation, where 80% of this sector is outside the formal financial system and suffers from excessive indebtedness. We are trying to resolve this problem. I hope this would be done soon,” he said at industry chamber FICCI’s AGM here.
Pointing out that the share of agriculture in the GDP has been declining, Singh said: “We cannot minimise the importance of this sector, for our economy and our polity.”
Agriculture is important, he said, because it supports a significant portion of the country’s population and also acts as a social safety net.
The government had earlier convened a special meeting of the National Development Council on Agriculture and has announced two agriculture programmes envisaging an expenditure of Rs35,000 crore during the 11th five year plan.
“We are looking at ways of having a quantum jump in investment in irrigation,” the Prime Minister said, adding that the allocation for agriculture and irrigation has been trebled in the 11th plan as compared to the previous plan.
The decision of the government to substantially increase the minimum support price of wheat and rice, he said, “demonstrates our commitment to reversing the unfortunate trend we saw between the mid 1990s and the mid-2000s of decline in investment in agriculture and a shift of the terms of trade away from agriculture.”
These initiatives, he hoped, would push up the agriculture growth rate to 4%in the coming years.
According to CSO estimates, farm sector will grow at a sluggish rate of 2.6%this fiscal against 3.8% last fiscal.