The Hindu : National : Grant for farm sector dependent on States’ spending

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Friday, Aug 17, 2007
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Grant for farm sector dependent on States’ spending

Gargi Parsai

NEW DELHI: The Rs.25,000-crore Additional Central Assistance (ACA) for the farm sector that was announced by Prime Minister Manmohan Singh on the 60th Independence Day, will depend on the States’ spending on agriculture and allied sectors.

The National Development Council (NDC) approved the proposal in May this year. It will be implemented over the five-year period of the Eleventh Plan, as and when States come up with “visible” district-level plans.

Sharing pattern

With the idea to encourage States to spend more on agriculture, the Union Government will share by 50 per cent (Central grant) the States’ spending on agriculture and allied sectors over and above the baseline expenditure which would be the average of the last three years.

The States will prepare State Agriculture Plan that dovetail rural development programmes and encourage private sector participation in these schemes.

According to sources, of the Rs.25,000 crore, an amount of Rs.250 crore has been earmarked for administrative expenses, including the cost of evaluation and hiring of consultants and experts for formulation of schemes. An amount of Rs.1,500 crore has been allocated for 2007-08 and Rs.5,875 crore each from 2008-09 till 2011-12.

Incentive

The ACA is an incentive for States to come up with comprehensive plans for the agriculture sector taking into account the agro-climatic conditions, natural resources and technology while integrating livestock, poultry and fisheries. Such schemes would be supported that aim at closing the gap between actual and potential yields.

Each State is expected to prepare an action plan identifying individual elements such as watershed management, extension support, seed availability, and horticulture development that can contribute to achieving specific targets. It is obvious then, that States that are quick and comprehensive would stand to gain. The target is to achieve a four per cent growth rate in farm sector.

The sources said the funds would be provided to the States as 100 per cent Central grant. Of this, 75 per cent would be made available for specific projects and programmes proposed by the States.

The balance would be given for strengthening existing State sector schemes and implementing district plans.

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