Budget will ensure 8 pc growth in economy: Chidambaram

New Delhi, Mar 10: Finance Minister P Chidambaram today (Mar 10, 2006) asserted that his budget proposals for 2006-07 would ensure an 8 per cent growth of the economy, give a boost to agriculture and sustain the improvement in manufacturing and service sectors.

Replying to the debate on the Budget (General) in the Lok Sabha, Mr Chidambaram assured the House that there would be no cut in subsidies both for public distribution system and fertilizers, saying that the Budget had given more emphasis on agriculture, the development of which was essential for maintaining the tempo of the overall growth of the economy.

Keeping that in mind, the arrears of fertilizer subsidies amounting to Rs 6,900 crore would be cleared by March 31 taking the total quantum of subsidies to around Rs 25,000 crores, he said.

Mr Chidambaram said the food subsidy bill would also cross the Rs 25,000 crore mark and there would be no reduction in it to ensure that the people living below poverty line got enough nutritious food.

Besides, the outlay for the Accelerated Irrigation Programme had been raised to Rs 7,121 crore from Rs 4,500 crore last year with a grant component of Rs 2,350 crore from the Centre to bring more acreage under assured irrigation.

Similarly, to make Indian agriculture less dependent on monsoon the Budget had taken up an innovative programme repairing, renovating and restoring of the 20,000 water bodies in 13 states with an amount of Rs 4,481 crore which would be raised from the World Bank.

On the farm credit flow, Mr Chidambaram said, in the last three years it had registered a 30 per cent increase every year from Rs 1,25,309 crore in 2004-05 to Rs 1,41,500 crore in 2005-06 and a new target had been set to raise it to Rs 1,75,000 crore in 2006-07.

However, the Finance Minister admitted that most of the credit facilities had been availed of by the rich farmers as the access to the institutional credit had so far been 27 per cent farm households.

To plug this loophole the government proposed to enhance the credit flow to the self-help groups from NABARD. The bank would also extend credit to the ''Joint Liability Groups'' consisting of tenant farmers who hitherto had been kept out of the ambit of institutional credit facility.

Responding to the criticism by some members that the Budget had nothing for boosting the Crop Insurance Scheme, the Minister said a modified version of the present National Agriculture Insurance Scheme (NAIS) would soon be announced under which the crop coverage would be fairly extended. The subsidy on the premium, prescribed in the NAIS, would be retained in the new scheme.

UNI