Mumbai, Feb 29: The National Bank for Agriculture and Rural Development (Nabard) has welcomed the Budget saying the measures announced are positive for the sector that will help boost the sagging rural demand through provisions like the Rs 20,000-crore irrigation fund.
Read more: Highlights Of Union Budget 2016
"Overall, this is a positive Budget for the rural sector that we cater to and the plans outlayed will help increase rural demand," Chairman HK Bhanwala told PTI when sought his comments on the Budget presented by Finance Minister Arun Jaitley today.
The minister said a dedicated long-term irrigation fund will be created in NABARD with a corpus of Rs 20,000 crore. According to Bhanwala, timely implementation of the 28 projects identified under the scheme will help mitigate distress to a large extent.
The government has made a budgetary provision of Rs 12,517 crore for the fund, while the rest will come from market borrowings.
The soil health card scheme, under which the government is aiming to cover all the 14 crore farm holdings by March 2017 at a cost of Rs 368 crore, will help boost productivity and it is an area which has been needing our attention for long time now, Bhanwala said.
Other initiatives on the social sector, as well as rural roads programme, where the government has increased the outlay to Rs 19,000 crore for next fiscal, will be of great help, he said. The increase in the agri lending target to Rs 9 trillion from Rs 8.5 trillion is also positive for the rural economy as farmers will be more confident of accessing credit, the Nabard chairman said.
The farm sector and the rural economy have been facing distress after a second consecutive year of drought in many parts, which had led to demands for reviving the sector ahead of the budget presentation.
The Nabard chairman said while there was no mention of long-term funds like the Rural Infrastructure Development Fund (RIDF) in the Budget, there might be a "separate approach" on this subject in the days ahead. Nabard also expects to get capital from the Rs 5,000-crore earmarked for bank recapitalisation in the Budget.