In a boost to the farm sector, finance minister P Chidambaram on Monday set a higher agricultural credit target of R8 lakh crore for 2014-15, saying that the agriculture credit is likely to exceed the target of R7 lakh crore for the current fiscal.
“We are proud of stellar performance of agriculture. Agriculture credit is likely to touch R7,35,000 crore, exceeding the target of R7,00,000 crore. I am therefore encouraged to set a target of R8,00,000 crore for 2014-15,” Chidambarm said in his interim budget speech.
Finance minister also announced that the interest subvention scheme on farm credit, introduced way back in 2006-07, would continue during the next fiscal. At present, interest rate on agricultural loan is 7%, while it is 4% for those who repay on time.
“There is a subvention of 2% and incentive of 3% for prompt payment. Thus reducing the effective rate of interest on farm loans to 4%, so far R23,924 crore has been released under the scheme. I propose to continue the scheme in 2014-15,” Chidambaram said.
He noted that the agricultural goods 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% in the current fiscal.
FE had recently reported that mainly driven by sharp rise in shipment of rice, meat products and fruits and vegetables, India’s agricultural and processed food products exports rose by close to 20% to R99,125 crore during first three quarters of the current fiscal compared to same period last year.
Commerce ministry sources had said the agricultural exports is expected to rise by more than 15% in the current fiscal compared to 2012-13.
