Budget 2021: FM announces increase in agriculture credit target; allocation to Rural Infrastructure Development Fund to Rs 40,000Cr

The FM's Budget 2021 speech announces allocation of Rs 75,100 crore for farmers, and an increased focus on fisheries and marine farming. Here are the key highlights.
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Presenting India’s first-ever digital Budget, Finance Minister Nirmala Sitharaman announced agricultural reforms on Monday amidst loud protests from the Opposition. The farming sector in India has come into sharp focus, following protests around three contentious farm bills that the government is planning to introduce.

“The Central government is committed to the welfare of farmers", she said, adding that agricultural procurement has increased steadily and benefited farmers.

“The Minimum Support Price (MSP) regime has undergone a sea change to assure a price that is at least 1.5 times the cost of production across all commodities. The procurement has also continued to increase at a steady pace. This has resulted in a substantial increase in payment to farmers,” she added.

Sitharaman said the government was allocating Rs 75,100 crore for the farmers of the country, announcing an increase in agriculture credit target to Rs 16.5 lakh crore in FY 2021-22.

In the case of wheat, she said the total amount paid to farmers since 2013-2014 had increased significantly from Rs 33,874 crore to Rs 62,802 crore in 2019-20 to Rs 75,060 crore in 2020-21. The number of wheat growing farmers who benefitted also increased to 43.36 lakh in 2020-21 from 35.57 lakh in 2019-20.

For paddy, the amount paid in 2013-14 was Rs 63,928 crore. “In 2019-2020, this increased to Rs 1,41,930 crore, and in 2020-2021, this is further estimated to increase to Rs 1,72,752 crore. The number of farmers benefitted increased from 1.24 crores in 2019-20 to 1.54 crores in 2020-21,” she said in her speech.

Building a Blue Economy

To further enhance the Blue Economy, the finance minister announced that she was proposing substantial investments in the development of modern fishing harbours and fish landing centres. To start with, five major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – will be developed as hubs of economic activity. “We will also develop inland fishing harbours and fish-landing centres along the banks of rivers and waterways,” she added. 

Proposing a Multipurpose Seaweed Park to be established in Tamil Nadu, Sitharaman said that seaweed farming was an emerging sector with the potential to transform the lives of coastal communities, providing them with large-scale employment and additional incomes.

Credit support

Announcing credit schemes for the farmers, Sitharaman said, earlier this year, PM Narendra Modi had launched the SWAMITVA scheme, under which, a record of rights is being given to property owners in villages. Announcing the government’s plan to extend the scheme to cover the whole country, she said, “Up till now, about 1.80 lakh property-owners in 1,241 villages have been provided cards. I now propose during FY2021-22 to extend this to cover all states/Union Territories.”

The government has also enhanced the agricultural credit target to Rs 16.5 lakh crore in FY22. “We will focus on ensuring increased credit flows to animal husbandry, dairy, and fisheries,” she said. 

Additionally, the government is increasing the allocation to the Rural Infrastructure Development Fund from Rs 30,000 crore to Rs 40,000 crore. 

The Micro Irrigation Fund, with a corpus of  Rs 5,000 crore, created under National Bank for Agriculture and Rural Development (NABARD) would be doubled, augmenting it by an additional Rs 5,000 crore.

“Around 1.68 crores farmers are registered and  Rs 1.14 lakh crore of trade value has been carried out through e-NAMs. Keeping in view the transparency and competitiveness that e-NAM has brought into the agricultural market, 1,000 more mandis will be integrated with e-NAM,” she said.

Reacting to the Budget, Amit Sinha, Co-founder of fintech agri-platform Unnati, said,

“Budget 2021 will surely enhance the agricultural sector. Increased credit target is a very positive step and will help build up distributed agriculture infrastructure, which is very much needed. In addition to this, the money in the hands of farmers through the MSP regime will keep the momentum seen during the COVID times going in agriculture. With the new Budget announced, farmers and the sector stand to gain from the funding."

For YourStory's multimedia coverage of Budget 2021, visit YourStory's Budget 2021 page or budget.yourstory.com

Edited by Suman Singh

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