NEW DELHI, 24 JAN

The government is likely to significantly enhance allocation for key farm sector schemes and push credit in the interim Budget to boost rural economy as growth in the agriculture sector is projected to decelerate to 1.8 per cent in 2023-24 from 4 per cent a year ago.

Finance Minister Nirmala Sitharaman is scheduled to present the interim Budget on 1 February, which will be the last major economic document of the Narendra Modi-led government ahead of the 2024 Lok Sabha elections.

In the 2019 interim Budget ahead of the 2019 general elections, the government announced PM-Kisan Samman Nidhi, under which up to Rs 6,000 financial assistance is provided to small farmers annually. In the election year, there are expectations that the quantum of assistance may increase in the upcoming Budget.

Also, the government is likely to announce a substantial increase in the agricultural credit target to Rs 22-25 lakh crore for the next fiscal and ensure every eligible farmer has access to institutional credit. The government's agri-credit target is Rs 20 lakh crore for the ongoing fiscal.

In the current fiscal, about 82 per cent of the agri-credit target of Rs 20 lakh crore has been achieved till December 2023. Director General of industry body CII Chandrajit Banerjee said agriculture and rural segments should be a key priority to drive inclusive growth in the interim Budget. "In agriculture, warehousing must be promoted to reduce wastage. Coverage of electronic Negotiable Warehouse Receipts (eNWRs) must be increased, and we have recommended allowing them to be used to access finance, trading, and settlement of trade," he said.

The industry chamber also made a case for moving towards dispensing fertilizer subsidies directly as cash transfers to farmers. India needs budgetary support and stronger Farmer Producer Organisations (FPOs) to optimise operations and tap into emerging market opportunities, Gaurav Manchanda, Founder & Managing Director of The Organic World, said.

"Higher farm insurance outlays, greater investment in rural employment schemes, better irrigation facilities, and improved rural infrastructure can make a huge difference," he said.