Monday, March 7, 2011

What’s in Budget 2011 for Farm sector?

  • FM hints at inclusive growth, indicates double-digit growth in the near future

  • Food inflation declined in the last year but remains a concern

  • Rural economic growth helped India avoid the quagmire of a global meltdown

  • FM acknowledges that the implementation gaps in the PDS is a big challenge

  • GDP estimates grew at 8.6% in 2010; 9.6 % in services, 5.2 % in agriculture sector

  • Exports grew 29 percent, imports by 17.6 percent

  • Wholesale-retail price imbalance unacceptable. Need to improve the distribution system of food and agriculture

  • FDI policy liberalisation being looked into

  • 36.4% of total budget outlay to be allocated for social sector development

  • Cold storage to be recognised as an infrastructure sector

  • 150 lakh mT of storage capacity for food items being created under Rural Godown scheme

  • Proposals for 15 more food parks during 2011-12

  • Vegetable initiative to set in motion a virtual cycle of production and distribution. Allocation of Rs 300 crore for implementation of vegetable initiative to provide quality vegetable at competitive prices.

  • Oilseed production to go up in 2010-11 as against 2009-10; 100,000 hectares added to oilseed farming

  • National Mission for Sustainable Agriculture

Government to promote organic farming methods, combining modern technology with traditional farming practices.

  • Outlay of Rs 500 crore to increase agriculture productivity

  • Green revolution in eastern region to be given a fillip with additional allocation of Rs 400 cr to bolster paddy growth

  • FM announces Women's Self-help Group Development Fund of Rs 500 crore

  • India Micro-finance Equity Fund of Rs 100 crore proposed

  • FM proposes removal of bottlenecks in supply of essential food items

  • Capital infusion into PSU banks; Rs 20,000 crore proposed

  • Slew of bills to make the financial sector more open in 2011-12

  • FM allocates Rs 600 crore for various environmental schemes in 2011-12

  • Rs 2 lakh crore from National Clean Energy Fund allocated for Green India Mission
  • Food Security Bill to be introduced this year

  • Fertiliser companies to get investment-linked tax deductions

  • Nutrient Based Subsidy (NBS) has improved the availability of fertiliser; Govt. actively considering extension of the NBS regime to cover urea

  • Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from Rs 6,755 crore to Rs 7,860 crore.

  • Allocation of Rs 300 crore to promote 60,000 pulses villages in rainfed areas

  • Allocation of Rs 300 crore to bring 60,000 hectares under oil palm plantations. Initiative to yield about 3 lakh Metric tonnes of palm oil annually in five years.

  • Allocation of Rs 300 crore to promote higher production of Bajra, Jowar, Ragi and other millets, which are highly nutritious and have several medicinal properties.

  • National Mission for Protein Supplement

Allocation of Rs 300 crore to promote animal based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries.

  • Accelerated Fodder Development Programme

Allocation of Rs 300 crore for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages.

  • National Mission for Sustainable Agriculture

Government to promote organic farming methods, combining modern technology with traditional farming practices.

  • Agriculture credit

1) Farm loan @ 4%

2) Agricultural credit to farmers to grow from Rs 3,75,000 cr to Rs 4,75,000 cr

3) Interest subvention proposed to be enhanced from 2 per cent to 3 per cent for

4) providing short-term crop loans to farmers who repay their crop loan on time.

5) In view of enhanced target for flow of agriculture credit, capital base of NABARD

6) to be strengthened by Rs 3,000 crore in phased manner.

7) Rs 10,000 crore to be contributed to NABARD’s Short-term Rural Credit fund for 2011-12.

  • In view of recent episode of inflation, need for State Governments to review and enforce a reformed Agriculture Produce Marketing Act.

  • National Food Security Bill (NFSB) to be introduced in the Parliament during the course of this year.

  • Indirect Taxes exemptions

1) Scope of exemptions from Excise Duty enlarged to include equipments needed for storage and warehouse facilities on agricultural produce.

2) Basic Custom Duty reduced for specified agricultural machinery from 5 per cent to 2.5 per cent.

3) Basic Custom Duty reduced on micro-irrigation equipment from 7.5 per cent to 5 per cent.

4) De-oiled rice bran cake to be fully exempted from basic Custom Duty. Export Duty of 10 per cent to be levied on its export.

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