M A I N   N E W S

Govt to incentivise states to avert farm crisis, says PM
S. Satyanarayanan
Tribune News Service

New Delhi, May 14
Prime Minister Manmohan Singh today expressed concern over the decline in spending of state governments towards agriculture. He said the Centre will offer incentives to states that take urgent measures to avert farm crisis by implementing state-specific strategies to raise agricultural output.

Worried over the ballooning fertiliser subsidy, the Prime Minister asked the Planning Commission to quickly examine this matter and come up with alternate models to deliver the subsidy in a more cost effective and more nutrient neutral manner.

He was speaking at the meeting of the Full Planning Commission, attended among others by Finance Minister P. Chidambaram and Deputy Chairperson of Planning Commission Montek Singh Ahluwalia.

Pointing that the spending by the state governments on agriculture had declined in recent years from an already low level of 5 per cent of total state government expenditure to an even lower 3.5 per cent, Dr Singh reminded that agriculture is a state subject and that states cannot shirk their responsibility in this vital area. He wanted them to step up expenditure on agriculture sector to at least 6 per cent of state expenditure in the XIth Plan period.

Expressing concern over the gap between yields actually achieved at the farm level and the yields that are feasible given the agro-climatic constraints and existing technology, Dr Singh said, “It is important to evolve state-level strategies tailored to the specific needs of the agro-climatic conditions prevailing in each state.”

Meanwhile, the meeting identified additional public investment in critical areas such as irrigation and water management, cutting the knowledge gap which prevents use of best practices relating to rational fertiliser use and optimal seed replacement and attention to soil health as crucial elements for closing the yield gap.

Addressing a press conference after the meeting, Ahluwalia said the meeting noted that the stagnation in food-grain production in recent years was a matter of serious concern and a special mission should be launched aimed to closing yield gaps in wheat, rice and pulses.

Chidambaram pointed out the constraints over the proposal of the Planning Commission that Additional Central Assistance (ACA) was a desirable method of transfer of resources.

“It is not clear what will be the size of the envelope that can be accommodated under the ACA method. I doubt whether large outlays for sectors, which require substantial funds, can be channelled through ACA. Normally, such outlays are routed through the Finance Commission or the Planning Commission and take into account overall resource availability and inter-sectoral and inter-state allocations.”

However, even conceding that ACA for agriculture may be necessary and desirable, its horizontal allocation across states needs to be driven by a transparent formula.

Today’s meeting was a prelude to the National Development Council (NDC) scheduled for May 29.



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