PAU ECONOMISTS WELCOMED UNION BUDGET FOR 2011-12

LUDHIANA, FEBRUARY 28:-----



Mr Pranab Mukherjee, Union Finance Minister presented the budget for the financial year 2011-12 in the Lok Sabha, today. The Indian economy is expected to grow at 9 % in the year 2011-12, plus or minus 0.25 %. The GDP growth rate during the year 2010-11 is likely to be 8.6 % as against 8.0 % in 2009-10. The GDP growth rate of the agricultural sector is 5.4 % in 2010-11 as against 0.4 % only in 2009-10. Dr. Mohinder Singh Sidhu, Head, Department of Economics and Sociology, PAU, while sharing his views said that there are some good steps taken by the Government for the agricultural sector during the year 2011-12. In a bonanza to the farming community, the Government to-day announced loan at interest rate less than market rate for farmers who pay their dues in time and raised the credit target for farm sector to Rs.4.75 lakh crore in 2011-12 as against Rs 3.75 lakh crore in 2010-11, he said. The existing interest subvention scheme of providing short term crop loan at 7 % interest rate will continue during the year 2011-12. This is another good announcement, he observed adding that the banks have been asked by the Union Government to focus on farm credit lending to the small and marginal farmers.

Faced with the high food inflation and the country's dependence on import of pulses and edible oil, the Finance Minister also announced various schemes for promoting production of vegetables, pulses, oilseeds, fodder and nutritive rich crops like millets and maize. The country needed a focus on these crops, observed Dr. Sidhu.

He also welcomed the proposal in the budget regarding removal of supply bottlenecks in the food sector during the year 2011-12. He said that the eastern region of the country required a focus as there existed a huge potential in terms of resources. The efforts for Green Revolution to be taken to the eastern region is, therefore, desirable. Dr. Sidhu lauded the budget proposal that cold storage chains to be given infrastructure status and that the capitalization of NABARD of Rs 3000 crore will be exercised in a phased manner.

The proposal to have new fertilizer policy for users will benefit the growers, he said. The steps such as augmentation of food storage capacity, setting up of additional 15 more mega food parks, focus on food subsidy, fertilizer subsidy, and petroleum subsidy will be right steps, said Dr. Sidhu. Enhanced allocation under RKVY from Rs 7860 crore in 2011-12 as against Rs 6755 crore in 2010-11 will boost farm research, Dr. Sidhu said adding that Rs 200 crore for environmental remediation programmes will be useful as there are many environmental concerns in agriculture. The setting up fund for women Self Help Group Development Fund will be useful.

Dr. Sidhu remarked that Punjab is a major contributor of wheat and rice in the central pool of foodgrains. The State with just 1.53 % of the geographical area of the country contributes about 60 to 65 % of wheat and 30 to 35 % of rice in the central pool. Due to dominant paddy-wheat rotation, the Punjab agriculture is facing a number of problems related with soil, depleting ground water and environment. He observed that no special package has been proposed in this regard in the Union Budget for the year 2011-12. Being a border State, Punjab economy has been growing at slow rate than the national average during the last few years. It might have been better if the Union Government provided a special economic package for Punjab in the overall interest of food security of the country, observed Dr. Sidhu.
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