Interest on farm credit to be reduced, Agriculture Risk Fund set up

New Delhi, Aug 22 (UNI) Finance Minister P Chidambaram today announced in the Lok Sabha that the interest on farm credit would be further reduced from the present 7 per cent besides revamping of National Agricultural Insurance Scheme(NAIS) and setting up of a Agriculture Risk Fund to improve the lot of poor farmers and enhance growth of the farm sector.

Concluding the debate on Appropriation (No. 3) Bill, 2007, Mr Chidambaram expressed concern over the laggard growth in agriculture at around 2.5 per cent when industry and service sectors were witnessing double digit growth rate.

He said the farm sector must grow at least at four per cent to sustain the GDP growth rate close to 9 per cent. For this purpose, he said, the government had taken up three major programmes.

They are -- National Food Security Mission, for enhancing the productivity of rice, wheat and pulses, Price Support Operations for mustard and Central Assistance Scheme worth Rs 25,000 crore -- spread over five years.

For agriculture an additional expenditure of Rs 800 crore was approved while a sum of Rs 15,000 crore cleared as payment towards the fertiliser subsidy on indigenous and imported fertilisers which included Rs 6550 crore as cash outgo.

A sum of Rs 352 crore has been approved for Department of Telecommunication to take care of employees's Voluntary Retirement Scheme.

The Finance Minister claimed that the rate of inflation was lowest now at 4.05 per cent much below than 4.09 during the previous NDA regime. The government was taking steps to keep the inflation under check, including the supply of food and fuel items, he assured.

The House passed Supplementary Demands for Grants worth Rs 20,412.14 crore for 2007-08. The grants numbering 39 involved net cash outgo of Rs 10,428.22 crore and the balance will be matched by enhanced recoveries aggregates to Rs 9,983.62 crore.

UNI