Y C Deveshwar
Chairman, ITC Limited
(Comment)

The Budget takes an integrated view of agriculture and rural development through a number of measure relating to the extension of credit availability through wider coverage of Kisan Credit Card scheme and relating the value of collateral security to the extent of loan exposure of banks, extending the innovative Farm Income Insurance Scheme to cover 100 districts as against the current 30 districts. Enhanced risk-management capability of the farmer lies at the root of improving incomes and consumption in rural India.

The Budget also aims at lowering the cost of credit by directing banks to lend at below 9 per cent and through farm fund loans at 200 basis point below prime lending rate. This measure can help induct productivity-activities at the farm level. It also contains special measures for the tea and sugar sectors, particularly for the smaller units. The allocation of Rs 15,000 crore for the cooperative sector and the promise of amendment to legislation to facilitate the growth of the sector in partnership with the states will also benefit the agricultural sector.

At an overall level, it is heartening that the key focus area of fiscal consolidation has resulted in lower fiscal and revenue deficits, both in absolute terms and as percentage of GDP. This would enable the government to direct larger resources towards agriculture and rural development in future.