Farm help for states to depend on past record

The allocation by states on agriculture should be more than the average allocation of the last three years for them to qualify for the additional central assistance during the 11th five-year Plan (2007-12), according to a formula being discussed by the Planning Commission.

Under the formula for disbursing the Rs 25,000-crore assistance, for a state to qualify to receive the funds in 2007-08, it should have spent more in 2006-07 than the three-average from 2003-04 to 2005-06.

The proposal, which was recently approved by the Cabinet Committee on Economic Affairs, was part of a resolution of a specially-convened meeting of the National Development Council on agriculture in May. The aim is to achieve 4 per cent agricultural growth during the 11th Plan period.

However, many large states may not qualify as their yearly allocation for the farm sector is not higher than the average of the last three years, whereas some states that have been historically spending less may gain as they have started increasing the spending on agriculture in recent times.

For the first year of the 11th Plan (2007-12), Rs 1,500 crore will be disbursed among states for implementing area-specific agricultural plans. Around Rs 5,875 crore per annum will be released during the next four years.

States with larger share of unirrigated land and those with more potential to contribute towards meeting the 4 per cent growth target will get more money.

Announcing the CCEA's decision approving the proposal for additional central help, Finance Minister P Chidambaram had said the objective of the programme was to enhance public investment in agriculture and allied sectors, incentivise states to draw up comprehensive state and district agriculture plans and help states meet the targeted agricultural growth rate.