Finance Minister Arun Jaitley in his budget speech outlined nine pillars on which the government would base its transformative agenda for the economy in the coming year, first among them agriculture and farmers' welfare. Overall, he has allocated Rs35,984 crore for farmers' welfare.
''The key areas of policy focus would be farming, social reforms, infrastructure and recapitalising the banking system'', he said, adding that "we need to give back to our farmers. We need to think beyond food security to income security. will double income of farmers by 2022.''
Jaitley announced an all-time high agricultural credit of Rs9 lakh crore. He also announced a provision of Rs5,000 crore towards interest subvention to reduce burden of loan repayment. During the last Budget, the government had outlined target of Rs8.5 lakh crore of agricultural credit.
Various initiatives have also been put in place aimed at helping farmers tide over short-term contingencies and price shocks like crop loans up to Rs3 lakh at 7 percent interest, the effective rate of which was cut to 4 percent during 2015-16 as an incentive for prompt repayment.
The small and marginal farmers with Kisan Credit Cards also have the benefit of interest subvention scheme extended for a further period of up to six months (post-harvest) against Negotiable Warehouse Receipts, at the same rate as available to crop loan, to discourage distress sale of crops by small farmers. Although the ratio of agricultural credit to agricultural GDP has nearly quadrupled in percentage terms within a decade up to 2013, the share of long-term agriculture credit has declined significantly.