- Household savings: Arun Jaitley raises exemption limit, introduces KVP, hikes PPF cap to boost savingsNarendra Modi budgets for economic growth, eschews radical reforms; fiscal deficit plans questionedGovt will not rely on retro tax amendment, says Arun Jaitley in Budget speechBudget impact: Mobile phone prices may go up
Creating agri infrastructure, improving credit inflows and curbing inflation were FM Arun Jaitleys key focus areas as he announced in his Budget speech the inception of Warehouse Infrastructure Fund (WIF), Price Stabilisation Fund (PSF) and Long Term Rural Credit Fund (LTRCF), besides the launch of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).
Jaitley earmarked Rs 5,000 crore for WIF, which aims at increasing the shelf life of agricultural produce through scientific warehousing, which, in turn, is expected to boost farmers' income. He set aside Rs 1,000 crore for PMKSY, which equips rain-fed farmers to mitigate risk. To deal with price volatility of agricultural produce, as seen recently in case of potato and onions, Jaitley has allocated R500 crore under PSF.
To arrest the decline in share of long-term credit, which is affecting asset creation, LTRCF will be created in Nabard for refinance support to cooperative banks and regional rural banks with an initial corpus of R5,000 crore.
The FM has earmarked Rs 50,000 crore towards Short Term Cooperative Rural Credit to ensure uninterrupted credit flow to farmers and avoid high cost market borrowings by Nabard. Jaitley also announced the continuation of interest subvention for short-term crop loans, where farmers get credit at a low 7% and a 3% incentive for timely repayments. The minister announced a hike in agricultural credit target of state-owned banks by R1 lakh to R8 lakh crore.
We are committed to sustaining 4% growth in agriculture, Jaitley said in his maiden budget speech. The FM also promised restructuring of the Food Corporation of India (FCI) to reduce transportation and distribution losses, and plugging loopholes in the Public Distribution System (PDS).
...We need more clarity on price stablisation fund and agricultural credit Ajay Jakhar, chairman, Bharat Krishak Samaj, told FE.
A unique measure of the budget is the proposal to provide finance to 5 lakh joint farming groups of 'Bhoomi Heen Kisan (landless farmers) through Nabard this fiscal. As a very large number of landless farmers are unable to provide land title as guarantee, institutional finance is denied to them and they becomes vulnerable to money lenders, Jaitley noted.
To augment research, the government will set up two more institutes in Assam and Jharkhand on the lines of the Pusa-based Indian Agricultural Research Institute. The budget has provisioned R100 crore towards this end.
The FM has also allocated R200 crore for setting up two agri universities in Andhra Pradesh and Rajasthan and two horticulture universities in Telangana and Haryana. Besides, R100 crore would be set aside to establish Agri-Tech Infrastructure Fund.
Expressing concerns over deteriorating soil health, Jaitley said the government will launch a R100-crore scheme to provide every farmer with a soil health card. An additional R56 crore will be provided for setting up 100 Mobile Soil Testing Laboratories across the country. Other proposals include R100 crore for National Adaptation Fund and R200 crore to supplement Nabards producer organisation development fund.