M A I N   N E W S

Inflation stick: Sops to raise farm output
R. Suryamurthy
Tribune News Service

New Delhi, February 28
In a move to give an impetus to the farm sector, experiencing sluggish growth and putting pressure on stable foods, finance minister P. Chidambaram today unveiled a slew of measures to increase productivity, which could control the inflationary trend in the economy.

Presenting the Budget, he virtually conceded that the ‘aam admi’ government had done little to boost the farm sector, in which 115 million families are dependent.

Growth mania loomed large in Chidambaram’s economic philosophy as he reasoned out the need for focus on the agriculture sector. “A country with a large population has to be nearly self-sufficient in essential food items; otherwise supply constraints could upset macro-economic stability and growth prospects. Hence, agriculture must top the agenda of policy-makers and must hold the first charge on our resources,” he said.

To boost agriculture - which grew by 2.3 pc on an average in the past three years against a target of 4 pc - Chidambaram said the government would offer cheaper credit to more farmers.

He said five million farmers would be “brought into the banking system” in the present fiscal and the rural job guarantee scheme would be expanded. Easy and affordable availability of credit to peasants, the government hopes, will put an end to the spate of the farmers’ suicide across the country.

The Budget has set a target of Rs 225,000 crore for 2007-08 with an addition of 50 lakh new farmers to the banking system; provision of Rs 1,677 crore for 2 pc interest subvention for short-term crop loans.

It called for a special plan being implemented over a period of three years in 31 especially distressed districts in four states involving a total amount of Rs 16,979 crore; of this, about Rs 12,400 crore to be on water-related schemes; special plan includes a scheme with proposed provision of Rs 153 crore for induction of high-yielding milch animals and related activities.

Chidambaram said, “Revenues were buoyant for the third year in succession. I have put the revenues to good use to promote inclusive growth, equity and social justice.”

While there would be capital grants for the farm sector, there would be increased allocation for watershed schemes to the tune of 100 crore. Another thrust areas for propping the agricultural sector would be minimum instruction and training for farmers.

Other focus area was on ground water recharge to increase the water table, which is at a worrisome level. He said farmers would be trained and there would be 100 pc subsidy to small and marginal farmers and 50 pc subsidy to other farmers who undertake to dig wells.

The Budget outlined computerisation of the PDS and integrated computerisation programme for the FCI. Allocation for schemes only for SCs and STs to be increased to Rs 3,271 crore.

The finance minister said special plans were being implemented in distressed areas. The R. Radhkrishanan panel suggestions would be looked into for implementation and ameloration of rural indebtness.

The FM announced that the government was concerned about stagnating productivity in pulses; therefore there would be a sharp focus on improvement of seeds.

On fertiliser subsidy, Chidambaram called for finding an alternative model to deliver the subsidies directly to farmers in a bid to cut expenditure. Fertilser subsidy was budgeted at Rs 173 billion in 2006-07 but revised estimates showed the bill would rise to Rs 224.5 billion, he said.

Twin blow for Sensex
Shiv Kumar
Tribune News Service

Mumbai, February 28
After opening weak amidst falling markets worldwide, Sensex plunged deep into the red as investors gave the thumbs down to Finance Minister P Chidambaram’s Budget today.

The benchmark index went into a steep fall when industry’s expectations of huge sops from the Finance Minister failed to materialise. The Sensex slipped 541 points to close at 12,938 levels. In the broader markets, the Nifty shed 3.8 per cent or 149 points to end the day at 3,745 levels.

Today’s was the biggest drop for the Sensex since May 18, 2006, and the lowest closing level since December 12, 2006. Satyam Computer at Rs 412 was the biggest loser shedding 8.4 per cent or Rs 37. Gujarat Ambuja Cements, Wipro Ltd, HDFC, ACC, TCS, Tata Steel and Maruti Udyog were the other losers. However, ITC Ltd at Rs 171 levels was the only gainer. The stock surged 3.5 per cent or Rs 5.