Indicating a major concern within the government on the progress of the agriculture sector and the need to fight the spectre of high food prices, finance minister Pranab Mukherjee announced expenditure (including both plan and non-plan) worth `24,176 crores to boost agriculture production, increase credit flow to the farmers and improve infrastructure in the Budget 2011-12.
Observing that production and distribution bottlenecks for primary food items like vegetables, milk, meat and poultry were responsible for the recent spurt in food prices, the FM increased allocation under the ongoing Rashtriya Krishi Vikas Yojana from `6,755 crores in 2010-111 to Rs 7,860 in 2011-12 for the same.
To further push the second Green Revolution in the eastern region, the FM allocated `400 crores to boost production of food grains. In order to enhance the production of essential food items, which accounted for 70 per cent of the Wholesale Price Index, the FM allocated `2,200 crores, including `300 crores each on pulses, oil palm, vegetables, coarse cereals, National Mission on Proteins and fodder production.
To help the farmers financially, the FM enhanced the agriculture credit target from `3,75,000 crores this year to `4,75,000 crores in 2011-12.
Besides asking the banks to enhance direct credit lending to the small and marginal farmers, the FM announced cheap loans at 4 per cent interest for the farmers. He also said the government will infuse `3,000 crores to strengthen the capital base of the National Bank for Agriculture and Rural Development. The FM also proposed to contribute `10,000 crores to NABARD’s short-term Rural Credit Fund for 2011-12 to meet the shortfall in priority sector lending by the scheduled banks.
Announcing approval to 15 Mega Food Parks in 2011-12 to reduce wastage of fruits and vegetables, the FM said on January 1, 2011 the food grain stock in the Central pool had reached 470 lakh tonnes and needed augmentation of storage capacity. He said a decision to create 20 lakh tonnes of storage capacity under the Public Entrepreneurs Guarantee scheme has been taken. While 2.6 lakh tonnes of sanctioned capacity will be added by March 2011, an additional 40 lakh tonnes will be created by March 2012, he said. Around 24 lakh tonnes storage capacity was created in 2010-11 under the Rural Godown Scheme. Further, capital investment in the creation of modern storage facility will be eligible for viability gap funding scheme of the finance ministry.