Rajya Sabha

January 2, 2018

Manish Gupta speaks on The National Bank for Agriculture and Rural Development (Amendment) Bill, 2017

Manish Gupta speaks on The National Bank for Agriculture and Rural Development (Amendment) Bill, 2017


Thank you Sir, I rise to support this Bill. It is quite heartening to know that after 70 years, a kind of light has emerged in which the government has realised that we need to invest more in agriculture to promote integrated rural development.

I think the move to include the micro and small industries under NABARD is a welcome move and is laudable but at the same time we have to see that increasing the equity from Rs 5,000 to Rs 30,000 crore may not be sufficient because the butter is too thinly spread. One has to take a view to see whether proper finance is reaching the small and marginal farmers.

NABARD mainly operates through the rural infrastructure development fund and we have found that in the last two years there has been a shortfall in disbursement of funds under this programme. NABARD can easily lend to new institutions like producer organisations and benefit a larger section of financially excluded farmers.

Agriculture contributes 70% of GDP and 50 percent of the workforce in India is in the rural sector. We have also noticed that there’s a paucity of proper financial arrangements for farmers topping in funds. Commercial banks and cooperatives usually lend to the larger farmers and the finance does not reach the small and marginal farmers. They usually borrow from money-lenders.

Forty-eight per cent of our farmers’ population borrows from money-lenders, from friends, from relatives, from landlords. So this increases their indebtedness. We have also taken the view that farming is a zero-sum game. If there is bad crop, there is devastation, which sometimes leads to suicides. We have seen what happened in Mandsaur. We have seen farmers coming to Delhi with skeletons of their fallen comrades, but nobody from the Government went to meet them, neither any official was able to contact them.

The Swaminathan Committee has said that farmers should be given a minimum support price (MSP) plus 50%. But recently we have noticed, in the imposition of the GST, that tractors and agricultural implements are being taxed at 12%, tyres of those tractors at 28%, fertiliser tax has been increased from 1.03% to 5%, and all the inputs – fertilisers, insecticides – at 18%. So the farmer is beset with numerous problems – indebtedness, financial exclusion, no formal credit, poor MSP and poor procurement of the crops by the government. The entire issue has been aggravated by the fact that, though this year we had a record production of 30 million metric tonnes (MMT) of pulses, which was sufficient meet the domestic demand, the Government of India imported 7 million metric tonnes, and the pulses of prices crashed. This has adversely affected the farmers.

The farmers’ income has to be doubled by 2022 as declared by the Government of India. We know that in common parlance, economic planning is described several times as a set of measures taken by the government to achieve pre-set targets in the minimum possible time. Sir, the agricultural growth rate today is 1.8%. To achieve doubling of farmers’ income by 2022 means that we have to achieve a growth rate of 10.8%. This shows, that even we feel something in the way it is done now, there has to be steep change in the approach to small and marginal farmers.

The indebtedness of the farmers arises from the fact that they do not get formal credit, they have to borrow at a high interest rate. This is bringing down the rate of production, this is making them poorer and this is not supporting the national effort. Financial inclusion is the most important issue. 80% of agriculture credit, peculiarly is given in the months of January, February and March. That is when the harvest is almost completed.

Indebtedness of small farmers, also includes those, who constitute 86% and who holds less than one hectare of land. So, Sir, I would request the hon minister, to consider, whether a separate fund or whether a special wing of the NABARD could be set up to exclusively deal with the need of small and marginal farmers.

Thank You.