Agriculture top priority for overall growth: FM

28 February 2007

CNBC-TV18 shares its special report with domain-b

Finance minister P Chidambaram, has agriculture on top of the agenda so as to achieve overall growth. He believes that policy makers must hold the first charge on the country''s resources. He said, "The agriculture sector has witnessed sharp ups and downs. Average growth during the Tenth Plan period, which is 2.3 per cent, is below the desired level of 4% a year."

The global commodity markets up to an extant impacted the domestic agriculture, which has grown below the desired results, as well; high prices have exerted pressure, while supply constraints have hit essential commodities like wheat, pulses and edible oil. Consequently, average inflation in 2006-07 is estimated at between 5.2 per cent and 5.4 per cent, which is higher than last year''s 4.4 per cent.

The government is concerned over inflation. "I wish to reiterate the government''s concern over inflation, the FM said pointing out at the facts that the Centre had already taken measures on the fiscal, monetary and supply sides to maintain price stability. He added that if required the government will not hesitate to take more measures.

He realises the fact that farm supply imbalances can play spoil sport to the immense growth opportunities that India has, which can be avoided if cheaper credit is available to the farmer on time. He said, until December 2006, 53.37 lakh new farmers have been introduced to the institutional credit system.

He added, "For 2007-08, I propose to fix a target of Rs225,000 crore as farm credit and an addition of 50 lakh new farmers to the banking system. The 2-per cent interest subvention scheme for short-term crop loans will continue in 2007-08, and I am making a provision of Rs1,677 crore for that purpose."