With a month and half to the Budget, the Finance Minister has begun pre-Budget consultations. First up are allocations and sops for agriculture. The farmers lobby wants the FM to rationalise fertiliser subsidies and bring down interest rates. CNBC-TV18 reports with elections around the corner, farmers may not go away disappointed.
Finance Minister P Chidambaram kicked off the annual pre Budget meetings with agricultural experts and farmers organisations in the capital today. The key demand- increase investment in the sector and rationalise fertiliser subsidies.
The participants from India's farm sector want the government to ensure that fertiliser subsidies, which have already crossed Rs 40,000 crore this year, should be targeted at farmers directly.
“We have impressed upon the FM to ensure that fertiliser subsidies are better targeted. There should be a mechanism for it and the government appreciates the need for better targeting of subsidies, but the FM has cited the lack of political will on this front,” said P Chengal Reddy, Secretary General, Indian Farmers' Association.
The farm lobby has asked the FM to reduce interest rates on all agricultural loans, from 7% to 4%. They have also proposed that the Swaminathan formula be adopted for calculating the MSP of crops. The formula says MSP should be cost of production plus 50%. But with agricultural productivity still on the decline, the government may need to increase its allocation to agriculture manifold.
“The need of the hour is to increase spends, so that per hectare yields improve. There is also a concern that production of key crops, like wheat and rice, have stagnated which may lead to more costly imports,” said Ashok Gulati, Director - Asia, IFPRI.
Experts say tax exemptions to the sector are already available in plenty. Finding funds is also not a problem, as indicated by the 11th plan. The problem is of using funds efficiently.
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