The Common Minimum Programme lays emphasis on broad-based
agricultural development and calls for a doubling of the flow of
credit to agriculture and agro-industries, particularly to small
and marginal farmers, within five years. We have evolved an
integrated plan consisting of several elements for fulfilling
this important objective.
First, the share capital of the National Bank for
Agriculture and Rural Development (NABARD) will be increased from
the present level of Rs.500 crore to Rs.2,000 crore in the next
five years. I propose to double NABARD's paid up share capital to
Rs.1,000 crore in the current year. A budgetary provision of
Rs.100 crore is being made towards the Government of India's
share and the balance Rs.400 crore will be contributed by the
Reserve Bank of India.
Second, the Rural Infrastructure Development Fund (RIDF)
which is operated by NABARD and funded by contributions from
commercial banks falling short of their priority lending targets
will be augmented considerably. The RIDF provides loans to State
governments for completion of projects in areas like medium and
minor irrigation, soil conservation and watershed management.
During 1995-96, NABARD sanctioned loans aggregating Rs.1,984
crore to 19 States for completing 2,489 projects. During the
current financial year, an additional Rs.2,500 crore will be made
available for financing rural infrastructure through the RIDF.
In addition to the RIDF, I am proposing an
Accelerated Irrigation Benefit Programme under which the Centre
will provide, on a matching basis, additional Central assistance
by way of loans to the States for the timely completion of
selected large irrigation and multi-purpose projects. I am making
an allocation of Rs.800 crore in 1996-97 to launch this scheme
which is designed to accelerate the completion of irrigation
projects where the project cost exceeds Rs.1,000 crore and is
beyond the resource capability of the States. I am also
allocating Rs.100 crore in the current financial year for
irrigation projects where, with just a little additional
resources, the projects could be completed and farmers could get
the benefit of assured water supply. 100,000 hectares will be
brought under irrigation through these schemes and I have been
assured that the first crop will be harvested on these lands
during one of the next four agricultural seasons. Details of the
large projects and the projects to benefit 100,000 hectares will
be announced by the Planning Commission in the next few days.
This programme will be closely monitored by the Department of
Programme Implementation.
Fourth, to promote investment in commercial or
high technology agriculture and allied activities such as
horticulture, floriculture and agro-processing, state level
agricultural development finance institutions are proposed to be
set up. NABARD will be the chief promoter. Other national level
financial institutions as well as the State governments concerned
will be requested to participate in the equity.
Fifth, it has been agreed with RBI to promote the
setting up of new private local area banks with jurisdiction over
two or three contiguous districts. This would enable the
mobilisation of rural savings by local institutions and, at the
same time, make them available for investments in the local
areas.
Finally, we have taken a number of decisions that will
directly benefit the farmers. Two weeks ago, the Prime Minister
announced increases in the subsidies for phosphatic and potassic
fertilisers. Government have decided to extend the subsidy under
the Integrated Cereal Development - Rice Programme to power
tillers at the rate of Rs.30,000 or 50% of the cost for each
power tiller. The subsidy scheme on small tractors at the rate of
Rs.30,000 per tractor is presently restricted to small and
marginal farmers. I am extending this scheme to all farmers. I am
also enhancing the subsidy on sprinkler and drip irrigation from
50% to 70% of the cost of the system and the ceiling is also
being raised from Rs. 15,000 to Rs.25,000 per hectare. In respect
of small and marginal farmers, women and scheduled castes and
scheduled tribes, this limit is being raised to 90% of the cost
of the system.
