Union Budget 2012-13: Provisions for Agriculture & Allied Sector

The Union budget 2012-13 presented by Union Finance Minister Pranab Mukherjee on 16 March 2012 proposed an increase by 18 per cent to Rs. 20208 crore in the total Plan Outlay for the Department of Agriculture and Cooperation in 2012-13. The outlay for Rashtriya Krishi Vikas Yojana (RKVY) was increased to Rs 9217 crore in 2012-13.

The Finance Minister proposed to raise the target for agricultural credit to Rs.575000 crore, which represents an increase of Rs. 100000 crore over the target for 2011-12 thereby highlighting the over arching importance of timely access to affordable credit for farmers.

A short term RRB Credit Refinance Fund was proposed to be set up to enhance the capacity of Regional Rural Banks to disburse short term crop loans to the small and marginal farmers. Also Kisan Credit Card Scheme is to be modified to make it a smart card which can be used at ATMs.

With an objective to have a better out reach of the food processing sector, a new centrally sponsored scheme titled National Mission on Food Processing is to be started in cooperation with the States in 2012-13.

Budgetary provision for the Agriculture & allied Sectors

•    An increase by 18% to Rs. 20208 crore in the total Plan Outlay for the Department of Agriculture and Cooperation in 2012-13
•    Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to `9,217 crore in 2012-13
•    Initiative of Bringing Green Revolution to Eastern India (BGREI) had resulted in increased production and productivity of paddy. The budget for the 2012-13 fiscal increased the allocation for the scheme to Rs 1000 crore in 2012-13 from Rs 400 crore in 2011-12.
•    Proposal to allocate Rs 300 crore to Vidarbha Intensified Irrigation Development Programme under RKVY was made
•    All remaining activities related agri sector development was proposed to be merged into following missions in Twelfth Plan:

a.    National Food Security Mission
b.    National Mission on Sustainable Agriculture including Micro Irrigation
c.    National Mission on Oilseeds and Oil Palm
d.    National Mission on Agricultural Extension and Technology
e.    National Horticultural Mission
f.    National Mission for Protein Supplement

•    Rs 2242 crore project launched with World Bank assistance to improve productivity in the dairy sector.
•    Rs 500 crore proposed to beprovided to broaden scope of production of fish to coastal aquaculture.
•    A new centrally sponsored scheme titled National Mission on Food Processing to be started in 2012-13 in co-operation with State Governments.

Target for agricultural credit was raised by Rs 100000 crore to Rs 575000 crore in 2012-13. It was proposed that interest subvention scheme for providing short term crop loans to farmers at 7 per cent interest per annum would be continued in 2012-13. Additional subvention of 3 per cent is to be made available for prompt paying farmers.

A sum of Rs 200 crore was proposed to be set aside for incentivising research with rewards.

Allocations for Irrigation

•    The Union Budget 2012-13 proposed structural changes in Accelerated Irrigation Benefit Programme (AIBP) to maximise flow of benefit from investments in irrigation projects.
•    Allocation for AIBP in 2012-13 stepped up by 13 per cent to Rs 14242 crore.
•    Irrigation and Water Resource Finance Company was proposed to be operationalised to mobilise large resources to fund irrigation projects.
•    A flood management project approved by Ganga Flood Control Commission at a cost of `439 crore for Kandi sub-division of Murshidabad District.

To further promote agriculture and agro-processing sectors, the Government proposed to reduce basic customs duty from 7.5 per cent to 2.5 per cent on sugarcane planter, root or tuber crop harvesting machine and rotary tiller and weeder and parts for the manufacture of these. Pranab Mukherjee while presenting the budget announced reduction of basic customs duty from 7.5 per cent to 5 per cent on specified coffee plantation and processing machinery. The basic customs duty was also reduced on some water soluble fertilizers and liquid fertilizers, other than urea, from 7.5 per cent to 5 per cent and from 5 per cent to 2.5 per cent.

The budget sought to provide substantial relief to the fertilizer sector.  It was announced that imports of equipment for initial setting-up or substantial expansion of fertilizer projects were to be fully exempted from basic customs duty of 5 per cent for a period of three years up to 31 March 2015. Government adopted measures to finalise pricing and investment policies for urea to reduce India’s import dependence in urea.

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