The union Govt. has planned to give focus on a technology driven second green revolution with focus on higher productivity and including "Protein revolution". A scheme to provide every farmer a soil health card in a Mission mode will be launched. The govt. has provided Rs.100 crore (around $16.7 million) for this purpose and additional Rs.56 crores (around $9.4 million) to set up 100 Mobile Soil Testing Laboratories across the country. Union Minister Radha Mohan Singh also mentioned the commitment shown by the Modi Govt. in the budget to usher in technology-driven second green revolution with focus on higher productivity and protein revolution. Another major area in focus would be promoting organic farming in the north-eastern region of the country where there is immense potential for this. The provision of soil health card to all farmers is a path-breaking initiative and it will help farmers reap better harvests with lesser investment on inputs.
The Govt. has also set aside an amount of Rs. 100 crores (around $16.3 million) for "Agri-tech Infrastructure Fund" and also a Corpus of Rural Infrastructure Development Fund (RIDF) will be raised by an additional Rs. 5,000 crores (around $836 million) from the target given in the Interim Budget to Rs. 25,000 crores (around $4.2 billion). The govt. has allocated Rs. 5,000 crore (around $836 million) for the Warehouse Infrastructure Fund.
The issue of Microfinance is very important for the Indian farmers. Microfinance means providing very poor families with very small loans (micro credit) to help them engage in productive activities /small businesses. Over the period, microfinance has come to include a broader range of services (credit, savings, insurance, etc.) as we have come to realize that the poor and the very poor who lack access to traditional formal financial institutions require a variety of financial products. Modi Govt. has understood the importance of it and Rs. 8 lakh crore (around $133.8 billion) has been set for agriculture credit during 2014-15 in the Budget. The Govt. has also proposed to provide finance to 5 lakh joint farming groups of "Bhoomi Heen Kisan" through the National Bank of Agriculture and Rural Development (NABARD) to provide institutional finance to landless farmers. At present the banks are extending loans to farmers at a concessional rate of 7% under the Interest Subvention Scheme for short crop loans. The farmers get a further incentive of 3% for timely repayment. This scheme will continue in this Govt also. The Modi Govt. has reintroduced KVP (Kisan Vikas Patra) scheme in the Budget proposals. "I plan to reintroduce the instrument to encourage people who may have banked and unbanked savings to invest in it," the finance minister said in his budget speech. KVPs had been available in denominations ranging from Rs 100 to Rs 50,000 at post offices using cash and used to double investment in eight years and seven months.
Modi Govt. has also proposed to set up "Long Term Rural Credit Fund" for the purpose of providing refinance support to Cooperative Banks and Regional Rural Banks with an initial corpus of Rs.5,000 crore (around $836 million). It will also set up a "National Adaptation Fund" with an initial sum an amount of Rs. 100 crore (around $16.7 million) to meet the vagaries of climate change in the country. Similarly a sum of Rs.500 crore (around $83.6 million) is provided for establishing a "Price Stabilization Fund" to mitigate the risk of Price volatility in the agriculture produces. All these steps will certainly protect and encourage the Agriculture sector and give more confidence to India’s vast farming community. "The union budget puts into action the Prime Minister’s commitment and vision to make villages and farmers strong through schemes for agricultural growth, irrigation and connectivity. Till now, agriculture used to be on the side lines in the union budgets but this is the first time that agriculture has been given pride of place in the budget" said Union Agriculture Minister Radha Mohan Singh and thanked the Prime Minister and Finance Minister for giving a very high priority to agriculture in the union budget.
But a lot more will be required to do in the future, in order to enable the poor people to access credit. The strength of the micro finance industry lies in its informality and flexibility which should be protected and encouraged. The Modi Govt. should focus to strengthen all the available channels of providing credit to the poor such as SHG – Bank Linkage programmes, Micro Finance Institutions, Cooperative Banks, State financial corporations, Regional Rural Banks and Primary Agricultural Credit Societies.
Modi Government has also announced its commitment to provide wheat and rice at reasonable prices to the weaker sections of the society. Providing wheat and rice to the weaker sections of the society on the reasonable prices has been in the core of UPA Government’s’ flagship scheme "National Food Security Act".
Although Mr. Jaitley did not mention the National Food Security Act in his budget proposals, but he enhanced the food subsidy allocation to Rs. 1,15,000 crore from Rs. 90,000 crore in the 2013-14 budget. This will directly overtake the previous UPA Govt.s flagship programme targeted which was expected to be a major attraction among the voters but failed.