In the latest Union Budget, which was presented by India’s finance minister P. Chidambaram to the Parliament on 28 February 2013, the Government of India re-emphasized its commitment to inclusive growth with special focus on human development and gender sensitivity, particularly in education, skill development, and health related programs, and on economically and ecologically sustainable development models.
According to the Economic Survey 2012-13, the average annual growth rate in agriculture and allied sectors was 3.6% during the 11th plan period (2007-12). While this is an improvement from 2.5% in the previous period, it is still below the expected growth of 4%, which is the minimum desired level and a prerequisite for an overall inclusive rural economy growth and development, and farm income enhancement. The agriculture sector needs urgent reforms to boost crop yields and private investment, motivate farmers, and feed the growing population. Therefore, a 22% budget increase has been announced for the Ministry of Agriculture; overall 4,943 million USD (Rs 27,049 crore) has been allocated to the Ministry of Agriculture and 624 million USD (Rs 3,415 crore) has been allocated for agricultural research. The agricultural credit target for 2013-14 is kept at 127.9 billion USD (Rs 7 lakh crore).
One of the targeted activities focuses on providing more affordable and accessible credit to small farmers to enable new technology adoption. Commercial banks have been included to cover short-term crop loans; farmers who have repaid their past loans in time will be entitled to receive another loan at a 4% interest rate. Other goals include matching equity grants to registered farmer producer organizations, credit guarantee funds for small farmers’ agribusiness corporations, and dedicated women banks.
To address the issues of supply-demand mismatch in oilseeds, high food inflation, declining water tables, climate change, meeting nutritional requirements, and achieving overall food security, the government announced establishment of two new institutions: Indian Institute of Agricultural Biotechnology in Ranchi, Jharkhand, and National Institute of Biotic Stress Management for Plant Protection in Raipur, Chhattisgarh. Furthermore, 91 million USD (Rs 500 crore) has been allocated to crop diversification programs in the next fiscal year to promote technological innovation and encourage farmers to grow crop alternatives. Other incentives in agriculture include introducing new crop varieties rich in micronutrients such as iron-rich bajra, protein-rich maize, and zinc-rich wheat, which is already among CIMMYT research areas. In addition, more budgetary support was announced to encourage the ongoing green revolution efforts in eastern Indian states.
For more information, contact Surabhi Mittal (s [dot] mittal [at] cgiar [dot] org).