Agriculture
and Rural Development 8. As I stand
here and address this august House, my thoughts wander
naturally to the remote villages of India and to millions
of our toiling farmers. I have no doubt in my mind that
the health and dynamism of the rural economy is central
to Indias economic and social development. I
propose to do the following for agriculture and rural
development:
Water is a
critical input for agriculture. Yet, after all these
years of development only 37 per cent of our cultivable
area is under assured irrigation. The bulk of our poor
people live in rainfed areas. We propose to accord top
priority for development of rainfed areas on a watershed
basis and thereby enhance agricultural productivity in a
sustainable manner. Watershed Development Programmes,
currently spread across several ministries and
departments, will be unified and the plan allocation
stepped up to Rs.677 crore from Rs.517 crore in RE
1997-98. Furthermore, there is an increase in the
provision for the Accelerated Irrigation Benefit
Programme by 58 per cent over 1997-98.
Next only to
water is the question of rural credit and rural
infrastructure. Under the Rural Infrastructure
Development Fund (RIDF) managed by NABARD moneys are made
available to the State Governments for rural
infrastructure. During the past three years about Rs.
2,500 crore has been allocated to it annually. I am
pleased to announce RIDF IV with an enhanced allocation
of Rs.3,000 crore. I invite the States to come forward to
utilise this important facility.
I propose to
augment NABARDs share capital by Rs.500 crore in
the current year. Government will allocate Rs.100 crore
from the budget and the RBI will contribute the balance
of Rs.400 crore. This will enable NABARD to leverage
additional resource from the market to meet the credit
needs of agriculture.
The problem of
rural unemployment and under-employment is a massive one.
This can only be solved through self-employment. There is
no reason why every craftsman, artisan and weaver cannot
become an entrepreneur and run his own little enterprise.
A major bottleneck however has been lack of credit
facilities. Earlier NABARD had launched a limited scheme
for promotion of Self Help Groups (SHG) as a channel for
the flow of funds to the micro enterprises. I am asking
NABARD to greatly extend the scope and coverage of the
scheme so that 2 lakh Self Help Groups covering 40 lakh
families can be assisted over the next five years through
this scheme of micro credit. 10,000 Self Help Groups
covering 2 lakh families will be assisted this year. The
Reserve Bank of India is also advising commercial banks
to design specific loan package to meet the needs of
micro enterprises.
I have asked
the National Housing Bank to finance one lakh rural
dwelling units under the Swarna Jayanti Housing Finance
Scheme as against 50,000 units last year.
I am making a
provision of Rs.265 crore to carry forward the process of
rehabilitation and recapitalisation of the Regional Rural
Banks (RRBs). Sponsor banks are being given an enlarged
role in providing management, operational and
restructuring support to RRBs.
Farmers often
face chronic problems of overdue loans due to
circumstances beyond their control. They are even
committed to civil prison for this default. While the
repayment culture must improve, this government is
determined to create conditions so that no farmer goes to
jail for a loan repayment default or is forced to commit
suicide. The Reserve Bank will be issuing appropriate
guidelines to the banks for hassle-free settlement of old
cases of overdues. Banks will be encouraged to provide
appropriate relief on accumulated interest in deserving
cases. The new procedure should also help in reducing the
outstanding volume of Non-Performing Assets (NPAs) of the
banking sector.
NABARD is being
asked to formulate a model scheme for issue of Kisan
Credit Cards to farmers on the basis of their holdings
for uniform adoption by the banks so that the farmers may
use them to readily purchase agricultural inputs such as
seeds, fertilisers, pesticides etc. and draw cash for
their production needs.
9. The
ingenuity and enterprise of our farmers is today
hamstrung by numerous Central and State laws and
regulations relating to the production, marketing and
movement of agricultural commodities. This is clearly
unacceptable. My colleague, the Minister of State for
Agriculture, will soon be bringing out, under the
guidance of the Prime Minister, the Governments
National Agricultural Policy paper which will address
these constraints in a comprehensive manner. The Minister
of Commerce is systematically reviewing existing controls
on exports of all agricultural commodities except
foodgrains. There is no reason why our farmers should not
reap the benefits of access to wider global markets.
10. The
system of agricultural cooperatives in our country is
plagued by bureaucracy and political interference at many
levels. As part of a concerted programme to revitalise
the cooperative sector, government will shortly bring
forward a model cooperative law to replace the
Multi-State Cooperative Societies Act of 1984 and will
encourage the States to make similar amendments in their
own acts.
11.
There has been a long standing demand from our farmers
and the Ministry of Agriculture for the exclusion of farm
implements and tools from the list of items reserved for
manufacture by the SSI sector, so that farmers can
benefit from a wider range of implements and tools at
competitive prices and with requisite after sales
service. This proposal had also been recommended by the
Advisory Committee of the Ministry of Industry.
Government have decided to accept this recommendation.
12.
India has made commendable progress in oilseeds
production in recent years. In order to establish an
efficient market environment and to reduce volatility in
prices in this sector, the government is planning to
introduce futures trading in edible oilseeds, their oils
and their cakes.
13. The
existing subsidy schemes for both urea and decontrolled
phosphatic and potassic fertilisers are being continued.
However, for achieving optimum crop response ratio to
fertiliser use, the use of all the three nutrients,
nitrogen (N), phosphorus (P) and potassium (K) should be
balanced. This balance has been progressively distorted
over time because of the low price of urea compared with
decontrolled fertilisers. The NPK balance, which was
5.9:2.4:1 in 1991-92, had changed adversely to 10:2.9:1
by 1996-97. An increase in the price of urea would help
restore this balance. The increase is also justified on
the ground of rising costs, which have led to a more than
50 per cent increase in the subsidy on indigenously
produced urea in two years between 1995-96 and RE
1997-98. It is, therefore, proposed to increase the
selling price of urea by Re.1 per kilogram with immediate
effect.
14.
Government is committed to provide safe drinking water to
all rural habitations in the next five years. To achieve
this ambitious target, a multi pronged approach to rural
water supply is being adopted:
The allocation
for the Accelerated Rural Water Supply Programme is being
enhanced from Rs.1,302 crore in RE 1997-98 to Rs.1,627
crore in this regular budget. This enhanced outlay will
cover about one lakh habitations.
As mentioned
earlier, we will give a special thrust to Watershed
Development Programmes. This will also ensure better
results for ground water availability and conservation.
States are
being encouraged to institutionalise community-based
rural water supply programmes, which secure active
participation of beneficiaries to own, operate and
maintain rural water supply facilities.
15. Over the years, programmes for
alleviation of poverty and employment generation have
proliferated. Each scheme is well intentioned but their
multiplicity has led to needless duplication, high
overhead costs, confusion at field levels and
insufficient benefit to the people. It is proposed to
unify the various programmes under two broad categories
of Self Employment Schemes and Wage Employment Schemes.
Funding and organisational patterns will be rationalised
to achieve maximum beneficial impact of these programmes.
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