Farm sops to continue: Chidambaram

Finance Minister P Chidambaram today reiterated the government's commitment to continue with food and fertiliser subsidies.

Winding up the general discussion on the Budget in Lok Sabha on Friday, Chidambaram said the National Common Minimum Programme was committed to subsidies targeted at the poor and the needy.

"No one in this government will do anything to reduce subsidy which is targeted at the poor. Whatever food subsidy is required to sustain the public distribution system will be provided year after year," he said.

As for fertiliser subsidies, which are presently given to fertiliser companies, the government was working out ways to provide it directly to farmers.

On manufacturing growth, he said the success story of the automobile sector would be replicated in other sectors like textiles, leather, petroleum, food processing and handicrafts.

"We praise the French Revolution and the Industrial Revolution, but fail to take notice of the Indian revolution in automobiles unfolding at the moment. In three to four years, India will be the largest producer of small cars," he said.

Sounding upbeat about the farm sector's growth prospects, Chidambaram said the government was now in the final stage of designing a revised National Agricultural Insurance Scheme.

The government was firming up a strategy wherein a significant portion of farm credit goes to farmers who organise themselves as self-help groups and joint liability groups (of tenant farmers), he added.

"For the first time, the government is crediting into their bank accounts 2 per cent of interest paid by them on crop loans in the current year. We will give crop loans from the next kharif and rabi at 7 per cent interest rate," Chidambaram said.

He emphasised the need for states to utilise their cash balance, which amounted to Rs 53,000 crore (530 billion) ten days back.

Identifying the power sector as a major impediment to industrial development, he said contracts would be awarded by the year-end for the five ultra mega power projects of 4,000 MW each with a total investment of about Rs 90,000 crore (Rs 900 billion) to make up for "lost ground" in the last few years.

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