The finance ministry has asked financial institutions to provide more credit to farmers in view of good monsoon and it may be willing to increase budget amount for farm sector, minister of state for finance JD Seelam said on Friday.
"We have requested the finance institutions to take advantage of good monsoon so that more and more farmers could be given credit and if need be, by increasing the budget amount of some lakh crores (rupees), we are prepared to do that," Seelam said at an industry event by Assocham.
He said there is a need to increase investor base and provide increase finance to poor and vulnerable section.
"In the villages we don't have access (to finance). Actually, 40% of the people do not have access to institutional finance and specially the most vulnerable and weaker sections do not have access. At least 1% of the lending should go to the poorest of the poor," he said.
Seelam added that the investor base can be raised by special designs, instruments and specific and class-wise products to bring middle class, lower-level people into investor net.
Executive Director of Insurance Regulatory and Development Authority Sriram Taranikanti said Irda is focusing on uncovered areas for insurance penetration.
"We are focusing on rural and geographically uncovered areas of the country to various regulatory and development measures for prescribed settings and parameters by which insurance companies have to have a certain portion of their business in the rural areas to plug the gap in insurance business and cover more and more of rural India under the insurance space," Taranikanti said.
He said the insurance penetration can be increased from the existing level of about 4%.
"Even 1% increase in insurance penetration can mobilise savings every year to the extent of about Rs 1 lakh crore in the country."
He also said Irda is working to improve distribution network through common service centres, bank branches and debt aggregation.
Also, there is scope for insurance sector in crop and disaster management, he said.
"On disaster management front, we are working closely with National Disaster Management Authority and Ministry of Home Affairs...
"On crop insurance, we are working with the agriculture ministry and National Institute of Rural Development on how the crop insurance could actually be increased and to enhance the agriculture productivity in the long run and give a tremendous boost to entire rural segment," he added.