Presenting the fifth and last full budget of the UPA government, finance minister P Chidambaram announced a Rs60,000 crore loan waiver scheme that will benefit 30 million small and medium farmers to the tune of Rs50,000 crore and 10 million other farmers to the tune of Rs10,000 crore.
 
Agricultural loans given by scheduled commericial banks, regional rural banks and cooperative credit institutions up to 31 March 2007 and due for 31 December that year will be covered under the waiver scheme to address the problem of indebtedness.

Under the one-time settlement of loans for other farmers, agriculture loans restructured and rescheduled by banks from 2004-06 and other loans under RBI guidelines will also be eligible under the waiver scheme.

Implementation of debt waiver and debt relief will be completed by June 30 this year.

Short-term crop loans will continue to be disbursed at interest rate of 7 per cent per year.

Accelerated Irrigation Programme: Under the accelerated irrigation programme, 24 major and medium irrigation projects and 753 minor projects will be completed. The outlay for this programme is being raised from Rs11,000 crore last year to Rs20,000 in 2008-09. The Rain-fed Area Development Programme will be implemented, with an allocation of Rs348 crore.

Irrigation and Water Resources Finance Corporation: The government proposes to establish an Irrigation and Water Resources Finance Corporation with an initial capital of Rs100 crore. This corporation will mobilise resources for major and medium irrigation projects.

Initiatives for rejuvenating the agricultural sector include setting up of 500 soil testing laboratories, introduction of crop insurance scheme for plantation crops and support to cooperative sector reforms.

The government also set a target of Rs28000 crore for agriculture credit during the coming year.

Special Fund: The government proposes to provide $40 crore to a special support fund for tea and set up similar funds for cardamom, rubber and coffee, the finance minister said in his budget speech.

"I propose to provide funds for similar support to other plantation crops: cardamom, Rs10.68 crore, rubber Rs19.41 crore, coffee Rs18.0 crore," Chidambaram said while presenting the annual budget for 2008-09.

Highlights

* Complete waiver of farms loans for up to 2 hectares
* Rs280,000 crore for agricultural credit in 2008-09
* Rs20,000 crore for irrigation projects under AIPB
* Rs1,100 crore for National Horticulture Mission in 2008-09
* Coconut, cashew, pepper sectors to get special attention
* Rs75 crore for mobile soil testing labs in 250 districts
* Rs644 crore for National Agriculture Insurance Scheme
* Weather-based crop insurance scheme to continue
* Rs29 crore for National Plant Protection Training Institute
* Rice production estimiated at 94.08 million tonnes, maize 16.78 tonnes, soya bean 9.45 tonnes and cotton 23.38 million bales.