FM starts pre-budget meeting sessions with agricultural experts
18 February 2008
Mumbai: With less than six weeks to go to his budget presentation, finance minister P Chidambaram started pre-budget consultations with various interest groups.
The first round of consultations for the finance minister started with agriculturalists, seeking allocations and sops for agriculture. Rationalised fertiliser subsidies, and lower interest rates are on the farmer lobby wish-list. And with the Congress facing 10 state level elections, followed by a general election next year, the farmer lobby might just get their bidding.
The farmer lobby would like to see the government rationalise fertiliser subsidies, in a way in which they are better targeted at farmers directly, rather than producers or intermediaries in the supply chain. Fertiliser subsidies have already surpassed the Rs40,000 crore mark this year.
According to P Chengal Reddy, Secretary General, Indian Farmers' Association, the association has requested the finance minister to better target these subsidies. However, the minister cited a lack of political will as the main roadblock to the implementation of this request.
The association has also asked the finance minister to reduce interest rates on all agricultural loans, from the existing 7 per cent, to a more affordable 4 per cent. The lobby also proposes that the Swaminathan formula be used for calculating the MSP of crops, which says the MSP should be cost of production plus 50 per cent.
However, with agricultural productivity declining, the government may need to increase the allocation to agriculture manifold, if it would like to make a difference to the farmers, and to its own election prospects in the forthcoming state and general elections.