Farm credit target to be doubled

Finance Minister P Chidambaram today expressed confidence that credit flow to the agricultural sector would touch Rs 105,000 crore by the end of 2004-05 and outlined steps like strengthening the micro-finance set-up and revamping the co-operative banking structure to boost credit flows to the rural areas.

"The target for agricultural credit is being doubled and it will show a 30 per cent growth in three years," Chidambaram said at a conference on empowering panchayats.

"We are working on a model where micro-finance institutions will be recognised, regulated and provided refinance to lend funds for rural finance," the minister said.

Chidambaram said the Centre had written to states asking them to come up with projects, for which funds would be sanctioned from the Rural Infrastructure Development Fund.

The minister also said there was a need to revamp co-operative banking structure and a task force headed by A Vaidya-nathan was suggesting the reform initiatives for the sector.

The minister also announced the government's plan to convert the Small Farmers Agri-business Consortium (SFAC) into a venture capital fund. This would help in creating necessary financial infrastructure to transform rural areas into a business hub.

The SFAC envisages the provision of financial assistance as grants in aid for achieving the objective of generating income and jobs in the rural areas. He said the United Progressive Alliance government was committed to bringing prosperity to rural India through agriculture as well as business.