Budget: Farm credit to grow by Rs 1 lakh crore!

Media reports conjecture that the govt spending on the farm sector is going to increase by a substantial amount in the upcoming budget by the Modi govt committed to doubling farmers’ income by 2022. Farm credit is crucial to this mission, they assert.

The farm credit target is likely to be raised by Rs 1 lakh crore, according to reports quoting unknown sources. Last year while presenting the Budget Union Minister Arun Jaitley had promised that an adequate credit would be made available to the farmers. The amount of agricultural credit was pegged at 10 lakh crore but it is going to be 11 lakh crore this year, affirm sources.

Since about 40% of small and marginal farmers avail themselves of credit from the cooperative structure and therefore the Government is committed to supporting NABARD on computerization and integration of all 63,000 functional Primary Agriculture Credit Societies (PACS) with the Core Banking System of District Central Cooperative Banks, say sources.

The process has begun and would be completed in next two years, say Ministry sources.

Farm loan which is available on an interest rate of 9 per cent gets 2 per cent interest subsidy by the govt to ensure farmers get short-term farm loan of up to Rs 3 lakh at an effective rate of 7 per cent per annum.

An additional incentive of 3 per cent is being given to farmers for prompt repayment of loans within due date, making an effective interest rate for them at 4 per cent.

Prime Minister Narendra Modi has been advocating several additional measures to help farmers’ achieve the double income. The prime minister talked about value addition of agri products, beehive in agricultural fields, installation of solar power and several other new ideas in his speech at Davos.