Cheap farm credit on cards, says PM

Credit to small farmers is a matter of concern: Singh

Prime Minister Manmohan Singh today said the coming Budget would attempt to make credit cheaper for Indian farmers.

"We will try to improve access to credit at a lower cost to farmers. The finance minister will be addressing this matter in his Budget speech," he said while replying to a debate on the motion of thanks to the President's address to Parliament.

The prime minister said, while the flow of agriculture credit had improved, credit to farmers, especially to small and marginal farmers, remained a matter of concern.

"We have a problem of both excessive indebtedness and dependence on moneylenders for a high proportion of credit. I believe that the existing institutional arrangements are possibly inadequate in their current form to address the problems afflicting farmers," he said.

Singh added the government would also consider the suggestion that fertiliser subsidies be directly given to farmers. "I have asked the agriculture minister to prepare a package for addressing the problems of marginal farmers," he said.

The prime minister said the government was in no hurry to allow foreign direct investment (FDI) in retail. "So far, only FDI in single-brand retail has been allowed. This is a very narrow category which in any case is present in the country through franchises," he said. "We will not act in haste in this matter," he assured the House.

On the eve of the railway Budget, Railway Minister Lalu Prasad came in for special mention by the prime minister, who praised the "remarkable turnaround" in the railways. "The railways are entering a new era of growth," he said, adding that an all-time-high investment in infrastructure was a positive sign for the economy.

The prime minister said the government was importing wheat not to create panic but as a precautionary measure and added that a backward areas fund would be created.