Sowing seeds of change for agriculture but gaps remain
Subscribe to enjoy similar stories. The Economic Survey called agriculture the “sector of the future" and the FM echoed this sentiment in her budget speech, emphasizing garib, youth, annadata and nari. Despite this focus, key gaps remain.
Firstly, there is a budget cut for agriculture ministry. Despite the rhetoric, the Ministry of Agriculture and Farmers' Welfare (MOA) saw a ₹3,500 crore budget cut—a 2.5% reduction from last year. The budget undertook long awaited reforms under institutional credit by enhancing loan limits under Kisan Credit Cards (KCC) scheme.
Under its ongoing Modified Interest Subvention Scheme (MISS), the centre provides concessional short-term loans to the farmers practicing crop husbandry and other allied activities like animal husbandry, dairying, and fisheries. It is available to farmers availing short-term crop loans up to ₹3 lakh at an interest rate of 7% per annum for one year. An additional 3% subvention is also given to the farmers for prompt and timely repayment of loans thus reducing the effective rate of interest to 4% per annum.
Access to these affordable loans is critical for the farmers as average rate of interest paid on non-institutional loans is about 9-21% annually. The budget raised loan limits under MISS from ₹3 lakh to ₹5 lakh, yet the financial allocation remains unchanged at ₹22,600 crore, hinting at lower anticipated credit disbursal. Leveraging India Post locations as a rural reform catalyst is a welcome announcement.
Currently, there are about 1.5 lakh rural post offices, the India Post Payment Bank, and 2.4 lakh Dak Sevaks. They serve as critical access points for banking and other essential services in remote areas. Dak Sevaks (rural postal workers) are equipped with
. Read more on livemint.com
