9. The
provision of adequate credit flow is critical for agricultural production. Total credit
flow to agriculture through institutional channels of commercial banks, cooperative banks
and regional rural banks is estimated to have reached a level of Rs 51,500 crore this
year, an increase of about 15 per cent over last year. It is expected to increase to Rs
64,000 crore in 2001-2002 representing an increase of 24 per cent. In order to ensure
continued healthy growth of the agricultural sector, I propose the following steps:
The operation of the Rural
Infrastructure Development Fund (RIDF), set up in 1995-96 with NABARD, has been very
successful in upgrading rural infrastructure with about 1,84,000 projects sanctioned so
far. To help the States, I have decided to reduce the interest rate charged by NABARD from
11.5 per cent to 10.5 per cent. The corpus of RIDF VII will be increased from Rs 4500
crore to Rs 5000 crore next year.
The innovation of Kisan
Credit Cards has proved to be very successful. Since the year of its introduction in
1998-99, almost 110 lakh of KCCs have been issued. I am asking our banks to accelerate
this programme and cover all eligible agricultural farmers within the next 3 years.
I am also asking the banks
to provide a personal insurance package to the KCC holders, as is often done with other
credit cards, to cover them against accidental death or permanent disability, upto maximum
amount of Rs 50,000 and Rs 25,000 respectively. The premium burden will be shared by the
card issuing institutions.
NABARD and SIDBI were asked
to link one lakh Self-Help Groups during the current year. NABARD by itself is well poised
to exceed this target by the end of next month. I expect NABARD to link 1 lakh additional
Self Help Groups during 2001-02, which would help in providing access to credit to an
additional 20 lakh families. Share-croppers and tenant farmers will also become eligible
for this scheme and special attention will be given to SC/ST groups. A micro finance
development fund has also been set up in NABARD with contribution of Rs 40 crore each by
NABARD and RBI.
I had permitted NABARD to
issue capital gains tax exemption bonds last year. This has helped NABARD to mobilise more
than Rs 1000 crore at lower than normal interest rates thereby reducing its cost of funds.
I propose to continue with this tax exemption.
[Next][Home] |
