Agri credit target increased to Rs 16.5 lakh crore; cess imposed on some items to fund agri infra

Nirmala Sitharaman announced funds for agriculture infrastructure to be increased from Rs 30,000 crore to Rs 40,000 crore.

Finance Minister Nirmala Sitharaman presented the Budget 2021 on Monday and announced that the government will target Rs 16.5 lakh crore worth farm loans in the next fiscal year. This is an increase of 10 percent over the previous year's Rs 15 lakh crore. The announcement comes at the time when farmers' protests have intensified at Delhi border against the three farm laws that they demand to be repealed.

The Finance Minister also announced that funds for agriculture infrastructure will be increased from Rs 30,000 crore to Rs 40,000 crore and micro-irrigation corpus will be doubled to Rs 10,000 crore. She said that Agricultural Produce Market Committee (APMCs) will be given the agriculture infrastructure fund in order to augment the infrastructure facilities. She added that 1,000 more mandis will be integrated with the government's national digital platform 'eNAM' used for agricultural trading

"Our government is committed to the welfare of farmers. The MSP regime has undergone a sea change to assure price that is at least 1.5 times the cost of production across all commodities. The procurement has also continued to increase at a steady pace. This has resulted in an increase in payment to farmers substantially,” Ms Sitharaman said. Ms Sitharaman said that farmers were paid Rs 75,000 crore on wheat in the form of Minimum Support Price (MSP) in 2020-21 and the number of farmers who benefitted, increased from 35.57 lakh in 2019-20 to 43.36 lakh in 2020-21.

On the other hand, the government announced a cess on certain items including petrol, diesel, gold and some imported agricultural products. The Finance Minister said that agriculture infrastructure needs to be improved in order to increase the produce, while keeping in mind to conserve and process the output efficiently. She said this while proposing the Agriculture Infrastructure and Development Cess (AIDC). AIDC of Rs 2.5 per litre on petrol while Rs 4 per litre on diesel has been imposed. While the Basic Excise Duty (BED) and Special Additional Excise Duty (SAED) rates have been deducted so that consumers do not bear the brunt of increased rates. The cess on import of gold and silver will be 2.5 percent.