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More for farm sector soon

The government will plough some money it got from recent auctions of natural telecom resources — like 3G spectrum and wireless broadband bandwidths — into the farm sector, officials say.

delhi Updated: Jun 14, 2010 23:32 IST
Zia Haq

The government will plough some money it got from recent auctions of natural telecom resources — like 3G spectrum and wireless broadband bandwidths — into the farm sector, officials say.

Having got some elbowroom for spending, the government will pay more to farmers who grow commodities persistently in short supply, such as pulses. An ambitious new National Pulses Mission, which will subsume all existing pulses schemes, will also be rolled out this year, an official said.

The government earned Rs 1,06,000 crore from the auctions, way above an estimated Rs 35,000 crore.

The move comes after a recent advisory from Prime Minister Manmohan Singh to government wings towards accelerating food production to control prices, the official said.

In a surprise move, the government has decided to pay an additional Rs 500 per quintal of pulses sold by farmers to government agencies, above the better minimum support prices announced last week.

“The elbowroom created by recent earnings has prompted higher than expected prices for farmers in some commodities,” Abhijit Sen, head of agriculture in Planning Commission said.

Though self-sufficient in grains, India continues to rely on very expensive imports for key items, such as edible oil and pulses. “The additional payments to lentil farmers will cost the government between Rs 1,000 and Rs 2,000 crore. But it will not impact retail prices because it is in excess of MSP and purely on government account,” farm ministry spokesperson Manoj Pandey said.

The country’s pulses output remains stuck at 14-15 million tonnes, against a rising annual demand of 18-19 million tonnes. Lentil was one of the biggest contributors to food inflation, hovering upwards of 16 per cent.

Thanks to a timely fiscal splurge, India’s growth never dropped below 5.8 per cent despite the recession. However, farm growth dropped by 0.2 per cent.

With the slowdown over, an era of fiscal tightening now beckons the UPA government. An official however said better budgetary adjustments in agriculture would remain a priority for the government.