Financial Daily from THE HINDU group of publications
Saturday, Apr 02, 2005
Industry & Economy
Mid-term review lays stress on farm growth
New Delhi , April 1
THE mid-term review of the 10th Plan (2002-07) has laid stress on revival of agricultural growth and rejuvenation of farm support system, pointing out that achieving a GDP growth rate of 8 per cent would critically depend on achieving higher growth rates in agriculture.
The average rate of growth in the 10th Plan is likely to be below 7 per cent, well short of the 8.1-per cent target, admits the review.
Stressing for improved support systems in extension, credit and the delivery systems of inputs such as seeds, fertilisers and veterinary services, the review will call for developing private sector alternatives, apart from strengthening the existing public sector network. It will point out the need to expand rural credit reach by implementing the Vaidyanathan Committee on Cooperatives at the earliest, said sources. The appraisal report will recommend that these reforms need to be put within a policy framework so that they are "owned by the States and transferred to them within a definite framework".
The report calls for prioritising schemes on rehabilitating existing irrigation systems, ground water development through back-ended subsidy schemes, artificial recharge of ground water and "inclusion of command area development works as part of major/medium projects". The total cost of this effort is estimated at around Rs 1,10,000 crore and the Central share up to the end of 11th Plan period could be around Rs 23,000 crore. Moreover, if these schemes were to be implemented from 2006-07, the requirements will be in "an additional Rs 3,000 crore in 2006-07, rising to Rs 5,000 crore by 2011-12," says the report.
To find additional resources for these schemes, the report has suggested linking the existing FFW (Food for Work) and SGRY (Sampoorna Grameen Rozgar Yojana) programmes and the new Backward Regions Grant Fund, to ensure that at least in the 150 or so districts covered by these programmes, projects related to irrigation and water management receive priority. "The guidelines of the Backward Regions Grant Fund should be devised with this objective in mind and those for FFW/SGRY and the proposed EGA (Employment Guarantee Act) re-examined to allow this," says the review report.
In other districts, the AIBP (Accelerated Irrigation Benefit Programme) and the RIDF (Rural Infrastructure Development Fund) schemes should be used to focus on irrigation and water management programmes, and the AIBP should be further enhanced for this purpose.
According to the mid-term review, completing nine ongoing mega irrigation projects (in West Bengal, Rajasthan, Bihar, Punjab, Gujarat, Madhya Pradesh, Karnataka and Maharashtra) will cost about Rs 27,700 crore..
The review report calls for "considering Central support for a new mega-irrigation scheme aimed at completing these projects" and "explore the possibility of tapping new resources of funds for such investments, including the SPV (special purpose vehicle) for infrastructure financing announced in 2005-06 Budget." However, the review has also said, "funding for this purpose should be strictly linked to reforms in water tariff policy and greater reliance on participatory irrigation management through water user associations."
Additionally, the appraisal report calls for reviewing the present watershed development system so that "all watershed projects in a particular agro-climatic zone are implemented by a single department/agency."
For agricultural research, the review report calls for "speedy consideration" of recommendations made by Dr M.S. Swaminathan Committee on Agricultural Research. It has also called for operationalising the National Fund for Agricultural Research (NFAR) by June 30, and tie up funding from multilateral agencies such as World Bank and ADB for an assured source of finance. The Government has made an initial provision of Rs 50 crore for NFAR.
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