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Economic Survey 2023-24 was presented in the Parliament today by Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman. The Economic Survey states that the Gross Capital Formation (GCF) of the agriculture sector and the share of GCF in the agriculture and allied sectors as a percentage of Gross Value Added (GVA) has been growing steadily, mainly due to increased public investment. The GCF of the agriculture sector grew at the rate of 19.04 per cent in 2022-23, and the GCF as a percentage of GVA rose from 17.7 per cent in 2021-22 to 19.9 per cent in 2022-23, suggesting an increase in investment in agriculture. The average annual growth in GCF from 2016-17 to 2022-23 was 9.70 percent. The Survey states that despite the increasing trend in GCF, there is a need to further boost agriculture investment, especially in the context of doubling farmers’ income. The DFI 2016 report indicated that to double farmers’ income over the period of 2016-17 to 2022-23, income would need to grow at an annual rate of 10.4 per cent in the farm sector, which in turn would require an annual growth rate in agriculture investment of 12.5 percent.
The government’s priority has been to provide timely, cost-effective, and adequate credit that reduces the dependence on non-institutional credit and increases investment. The measures have reduced the share of non-institutional credit from 90 per cent in 1950 to 23.40 per cent in 2021-22. As of 31 January 2024, the total credit disbursed to agriculture amounted to ₹ 22.84 lakh Crore, with ₹13.67 lakh Crore allocated to crop loans (short term) and ₹ 9.17 lakh Crore to term loans.
Kisan Credit Card(KCC):
The Economic Survey states that the Kisan Credit Card (KCC) has streamlined agricultural credit accessibility and as of January 31, 2024, banks issued 7.5 crores KCC with a limit of ₹9.4 lakh crores. As a further measure, the KCC was extended to meet the working capital needs of fisheries and animal husbandry activities in 2018-19, along with the enhancement of the limit for collateral-free loans to ₹1.6 lakh. In the case of a Tri-Partite Agreement (TPA) among borrowers, milk unions, & banks, the collateral-free loan can go up to ₹3 lakh As of March 31, 2024, 3.49 lakh KCC and 34.5 lakh KCC were issued to fisheries and animal husbandry activities, respectively. Economic Survey states that Joint Liability Groups (JLGs) have emerged as an essential source of credit for tenant farmers. JLG accounts have grown at a compound annual growth rate (CAGR) of 43.76 per cent over the past five years, emerging as a vital source in meeting the credit needs of tenant farmers and marginalised segments.
Agriculture Infrastructure:
Economic Survey shows that as of 30th April 2024, 48357 projects were sanctioned for storage infrastructure with ₹4570 Crore released as subsidy, and 20878 other projects are also under progress with ₹2084 Crore released as subsidy. To give further fillip to farm gate infrastructure and also involve the private sector more actively, the Agriculture Infrastructure Fund (AIF) was launched with a financing facility of ₹1 lakh Crore to be disbursed between FY 2020-21 to FY 2025-26 with support extending till FY 2032-33.
The Economic Survey states that the Agriculture Infrastructure Fund(AIF) provides medium-term debt financing for post-harvest management and community farming projects, offering interest subvention and credit guarantee support. As of 5th July 2024, AIF mobilised an investment of ₹73194 Crore, supporting 17196 custom hiring centres, 14868 primary processing units, 13165 warehouses, 2942 sorting and grading units,1792 cold storage projects, and 18981 other projects. In addition, the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) introduced credit-linked financial assistance through grants-in-aid to build efficient supply chain management from farm to retail to reduce the wastage of perishable produce and extend food shelf life. Under PMKSY 1044 projects were completed till end March 2024. A total of 1685 projects with project cost ₹ 32.78 thousand crore and approved subsidy of ₹ 9.3 thousand crore have been approved till end March 2024.
