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Thursday, February 28, 2013

Another sector that receives a lot of attention is agriculture. And why not? After all it is the key livelihood in India's rural areas that are home to over 70% of the population. With Food Security Bill in the offing, the Ministry of Agriculture got a rise of 22% over the revised estimates for FY13. A further provision of Rs 100 bn was made towards food subsidy that remains a key overhang on country's fiscal health. While the fresh Green Revolution in eastern India has further been given a push, the crop diversification program will likely improve farm yields in areas that bore fruits of green revolution much earlier. The proposal to increase farm credit and extension of 4% interest subvention for short term crop loans to private and scheduled commercial banks is likely to give farmers further relief. Moreover, it is likely to improve loan repayment culture. Despite sufficient farm production, the country faces food inflation. At the root of this problem is huge food wastage and farmers' lack of access to the markets. The budget is likely to address this problem to some extent by extending support to Farmer Producer Organizations and companies that link farmers to markets. All in all, the FM ensured that agriculture continues to receive full Government support.

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