Union Budget 2024 | Economic Survey 2023-24 shows agricultural credit increased nearly 1.5 times
Union Budget 2024: The Economic Survey 2023-24 tabled in Parliament on Monday suggest that credit to agriculture and allied businesses increased by double digits in fiscal year 2024.
Union Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in Parliament on Monday, along with the statistical appendix, ahead of the Budget for 2024-25, which will be presented on Tuesday.
According to the survey, agricultural credit surged by about 1.5 times, from Rs 13.3 lakh crore in FY21 to Rs 20.7 lakh crore in FY2024.
The survey emphasised the effect of the Kisan Credit Card (KCC) initiative in providing farmers with timely and hassle-free credit, with over 7.4 crore active KCC accounts by the end of 2023. It went on to state that increased credit disbursement to the agricultural sector continued in April and May 2024, with bank credit to agriculture and related sectors increasing by 19.7% and 21.6% year on year, respectively.
The report stated that the agriculture sector's Gross Value Added (GVA) rose at a "slower pace" and that overall output was hampered by "erratic weather patterns" during the year and an uneven spatial distribution of the monsoon in 2023.
"The shares of the agriculture, industry and services sector in overall GVA at current prices was 17.7 per cent, 27.6 per cent and 54.7 per cent respectively in FY24," according to the report.
According to the Ministry of Agriculture and Farmers' Welfare's (MoAFW) third advanced estimate of foodgrain production, the impact on GVA growth is reflected in a 0.3% reduction in total foodgrain output for FY24.
The survey also highlighted government programmes launched to address crop insurance concerns, such as the YES-Tech Manual, WINDS portal, and enrolment app AIDE/Sahayak, which assess crop damage using satellite-based advanced technologies, as well as door-to-door enrolment initiatives that make coverage more accessible.
The survey predicted an increase in agriculture premiums beginning in 2024, with an average real premium growth of 2.5% over the medium term, aided by advances in insurance infrastructure such as mobile applications and remote sensing for crop loss monitoring.
It stated that agricultural insurance is expected to grow flat in FY23 due to a dramatic drop in premium rates during the Kharif cropping season. The decrease was more than offset by increased insured land area and farmer enrollments during the season.
"In FY23 and FY24, the agriculture sector was affected by extreme weather events, lower reservoir levels, and damaged crops that adversely affected farm output and food prices. So, food inflation based on the Consumer Food Price Index (CFPI) increased from 3.8 per cent in FY22 to 6.6 per cent in FY23 and further to 7.5 per cent in FY24," it added.
The economic survey also highlighted the government's efforts to assist farmers by subsidising their water, power, and fertiliser.
"The former two are provided virtually free. Their incomes are not taxed. The government offers them a minimum support price (MSP) for 23 selected commodities. Monthly cash support is offered to farmers through the PM-KISAN scheme. Indian governments - national and sub-national -write off their loans," the survey stated.
- PTC NEWS
