GoI raises agri credit target to Rs 8 lakh crore for 2014-15

NEW DELHI: In a bonanza for farmers ahead of general elections, the government of India Monday said it has set an agriculture credit target of Rs 8 lakh crore for 2014-15 as against an expected level of Rs 7.35 lakh crore this fiscal.
Presenting the interim budget for the next fiscal, Finance Minister P Chidambaram said farm exports would increase to over $45 billion this fiscal, as against $41 billion in 2012-13. He also estimated sharp increase in growth of agriculture sector to 4.6 per cent this year.
“We are proud of stellar performance of agriculture. …Agriculture credit is likely to touch Rs 7,35,000 crore, exceeding the target of Rs 7,00,000 crore. …I am therefore encouraged to set a target of Rs 8,00,000 crore for 2014-15,” he said in his budget speech.
Chidambaram further said interest subvention scheme on farm credit, introduced way back in 2006-07, would continue during the next fiscal. At present, interest rate on farm loan is 7 per cent, while it is 4 per cent for those who repay on time.
“There is a subvention of 2 per cent and incentive of 3 per cent for prompt payment. Thus reducing the effective rate of interest on farm loans to 4 per cent, so far Rs 23,924 crore has been released under the scheme. I propose to continue the scheme in 2014-15,” he added.
Highlighting the improved growth of agriculture sector during the UPA tenure, the Minister said: “Agriculture GDP growth increased to 3.1 per cent in five years of UPA-I, further to 4 per cent in the first four years of UPA-2. In the current year, agri growth is estimated at 4.6 per cent.”
Chidambaram said that foodgrain production in last ten years has increased from 213 million tonnes to 263 million tonnes this year.
“Foodgrain production in 2012-13 was 255 million tonnes. The estimate for the current year is 263 million tonnes. The estimates of production of sugarcane, cotton, pulses, oilseeds point to a new record,” he said.
That apart, Chidambaram said the UPA government enacted the landmark food law that ensures legal right over cheaper foodgrains to 67 per cent of the country’s population. It also decontrolled the sugar sector.

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