Budget speech to inlcude new farmers’ credit policy

Finance minister P Chidambaram is to announce a new credit policy for farmers in his Budget speech on the 28th of this month. This was disclosed by Prime Minister Manmohan Singh himself in the Lok Sabha in his reply to the debate on the motion of thanks to the President’s address to Parliament.

The Prime Minister said that while the flow of agricultural credit had improved, credit to farmers, particularly small and marginal farmers, was still a matter of concern. He said that the country had a problem of both excessive indebtedness and dependence on moneylenders for a high proportion of credit, and added that the existing institutional arrangements were possibly inadequate in their current form to fully address the problems afflicting farmers. ‘‘We are committed to finding a solution to this vexing problem. We will try to improve access to credit at a lower cost to farmers. The finance minister will be addressing this matter in his Budget speech.’’

The Prime Minister also said the government was also considering a proposal of giving a fertilizer subsidy directly to farmers. ‘‘This is an idea worth considering. I have asked the agriculture minister to prepare a package for addressing the problems of marginal farmers,’’ the Prime Minister said.