India needs agri growth rate at 4 per cent: Bansal

Chandigarh, May 28 (UNI) The country needs the agriculture growth rate at four per cent to achieve ten per cent GDP, Union Minister of State for Finance Pawan Kumar Bansal said here today.

Pointing out the present agriculture growth rate prevailing at 2.3 per cent. Mr Bansal said at a seminar here that the Conmgress-led UPA government has implemented several fresh schemes and programmes to benefit the rural populace in general and the farmers in particular.

He was speaking at the seminar on 'Farmer and the Finance-2006 and Beyond' which was organised by Dr Amrik Singh Cheema Foundation.

The Minister said that when the Congress Government came to power two years back, Prime Minister Manmohan Singh decided to double the credit limit for farmers within three years from Rs 85,000 crore. Last year it was Rs 1,57,000 crore and for this year it has been increased to Rs 1,75,000 crore, he added.

He said the Centre had reduced the rate of interest for short term loans for farmers to seven per cent for a period of one year or for two crops.

On institutional financing, he said, ''In India only 27 per cent people avail loans from institutions, 22 per cent from non-institutions and for 51 per cent population nothing is available.'' He stressed the need for more insurance policies for agriclture sector and said that the farmers must go for crop insurance to avoid losses due to natural calamities or failure of crops for other reasons.

Dr Satish C Jha, Member, Economic Advisory Council to the Prime Minister, in his keynote address, expressed his concern about the low agricultural growth of Punjab and Haryana at less than one per cent.

Dr Jha also stated that 78 per cent of all the farm households in Punjab were under debt. He quoted a sample survey which showed that 84 per cent of the farm households in Patiala district and 51 per cent in Amritsar district were found to be interlinked borrowers.

Dr Jha stated that small and medium farmers have taken more long term loans during 1998-99 and that too for non-productive purposes in most of the cases. Non-productive long term loans were mostly taken from private money lenders.

According to the same study, Punjab farmers were under debt of Rs 57,000 crore out of which 46.32 per cent is to commission agents, 7.12 per cent on mortgages, 27.14 per cent to co-operative instituitions, and 19.42 per cent to commercial banks. However, the amount of debt per unit of operated area was higher among marginal farmers and medium farmers.

Commenting upon the overall scenario, Mr Jha stated that this trend must be stopped at the earliest.

UNI DP PS ARB VC1828