BUSINESS

Farm Credit To MGNREGA: Here's How Budget 2017 Hopes To Boost Farm And Rural Sectors

The budgetary allocation to MGNREGA has gone up from Rs 38,500 crores in 2016-17 to Rs 48,000 crores in 2017-18, the highest ever allocation for the scheme.

01/02/2017 4:36 PM IST | Updated 01/02/2017 4:52 PM IST
Anindito Mukherjee / Reuters

In a bid to bring relief to the farm and rural sector and to help farmers increase productivity, Finance Minister Arun Jaitley announced a slew of measures including financial incentives and insurance schemes to help India's Monsoon-dependent agricultural sector.

Overall, the agriculture is expected to grow at 4.1 per cent in the current year, he said.

Here are some of the key measures he announced:

Farm credit

- The government has increased farm credit in 2017-18 to Rs 10 lakh crores. There will be-an increased focus on under-served areas like the Eastern States and Jammu & Kashmir, said Jaitley.

- To help flow of credit to small and marginal farmers, it has committed Rs 1,900 crores over the next three years to help NABARD in the computerisation and integration of all 63,000 functional Primary Agriculture Credit Societies with the core banking system of district central cooperative banks.

Farmer insurance

- For 2017-18, the government will allocate Rs 9,000 crores towards farmer's insurance scheme the Fasal Bima Yojana. The coverage will be increased from 30 per cent of cropped area in 2016-17 to 40 per cent in 2017-18 and 50 per cent in 2018-19. The budgeted provisions for this scheme were increased to about Rs 13,240 crores from Rs 5,500 crores in 2016-17. Jaitley noted that the sum insured under this scheme has more than doubled from Rs 69,000 crores in Kharif 2015 to Rs, 1,41,625 crores in Kharif 2016.

Farm productivity

To boost productivity through testing of soil health, the government proposes to set up new mini labs in Krishi Vigyan Kendras and ensure 100 per cent coverage of all 648 of these centres. In addition, up to 1,000 mini labs will be set by qualified local entrepreneurs, who can access a credit-linked subsidy.

The government will increase the funding to its irrigation fund to Rs 40,000 crores. It will also set up a dedicated micro irrigation fund with initial capital of Rs, 5000 crores in NABARD to achieve the goal, 'per drop more crop'.

Better prices for produce

- To help farmers in "post-harvest" and to help them get better prices for their produce by focusing on value addition, the government will expand the coverage of National Agricultural Market (e-NAM) from 250 markets to 585, providing financial assistance up to a Rs 75 lakhs to each e-NAM market to for setting up cleaning, grading and packaging facilities.

- It has proposed to undertake more market reforms and has urged states to denotify perishables from APMC.

- To help farmers get better prices and reduce post-harvest losses, it has proposed to connect farmers who grow fruits and vegetables with agro processing units. It will draw up a model law on contract farming which will be shared with states.

- It will set up a dairy processing and infrastructure development fund in NABARD that will receive capital of about Rs 8,000 crores over three years with an initial corpus of Rs 2,000 crores.

Rural poverty

- The total budgetary allocation for the rural, agriculture and allied sectors in 2017-18 is Rs 1,87,223 crores, which is 24% higher than the previous fiscal.

- The government has pledged to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019. It will develop a composite index for poverty free gram panchayats to monitor the progress from the baseline.

MGNREGA

- It has increased the budgetary allocation to MGNREGA from Rs 38,500 crores under in 2016-17 to Rs 48,000 crores in 2017-18, the highest ever allocation for the scheme.

Rural infrastructure

- To help drought proof farm land, it has committed an additional another 5 lakh farm ponds in rural areas in 2017-2018.

- For village connectivity and roads, the government has provided a sum of Rs 19,000 crores in 2017-18 for the village road scheme Mantri Gram Sadak Yojana . Along with state contribution, it expects to spend about Rs 27,000 crores on the scheme in 2017-18.

Rural housing

- The government has proposed to build 1 crore houses by 2019 for homeless and for those living in kutcha houses, stepping up allocation for Pradhan Mantri Awaas Yojana – Gramin from Rs 15,000 crores to Rs 23,000 crores in new fiscal.

Skills and employment

- To promote skill development of rural population, it has proposed to increase budgetary allocations for the National Rural Livelihood Mission scheme to Rs 4,500 in 2017-18. The allocation for Prime Minister's Employment Generation Programme (PMEGP) and credit support schemes has also been tripled.

More On This Topic