The RBI package of monetary measures to provide stimulus to growth of the economy does not contain any measures to address the credit needs of the agri sector and there is not even a single rupee allotted   for agricultural sector in the fiscal stimulus package of Rs37,500 crore announced by the government. The entire focus by both the RBI and the government is on industrial sector, completely ignoring the needs of the agri sector. Credit to industry grew by Rs 60,400 crore during April-Aug 2008, where as credit to agriculture actually decreased by Rs 11,000 crore. On Y-o-Y basis, credit to industry, which provides employment for less than 20% of work force and contributing  just about 25% to the GDP, grew by 45% (Rs 2,18,200 crore) by Aug 08 compared to industrial credit growth of  40% (Rs.1,43,600 crore ) during the  previous year. Growth in industry GDP, however, plummeted to 5% from 10%. Agriculture, providing employment to 60% of the work force and a GDP share of 20%, witnessed declining share in incremental credit to 8% from 13% during the same period last year. As on March, outstanding loans to agriculture were Rs 2,73,658 crore and the same declined to Rs 2,62,481 crore by Aug 2008. The mandated credit to agriculture is 18%. By March 2009, agri loan outstandings should reach the level of Rs Rs3,96,000 Crore. There is a huge credit gap of Rs 1,23,600 crore to be achieved by March 2009, and the RBI did not say a word about measures proposed to achieve the mandated target of agricultural loans. Government also did not announce any fiscal stimulus measures for agriculture by way of enhanced investment for irrigation, rural power, godwns&cold storage facilities, enhanced MSPs for rabi crops as per the formula given by Prof.M.S.Swaminathan Commission.  Restriction and duties on export of rice are not removed while restrictions and duties on export of iron ore are lifted. CCI is not buying cotton from farmers at the MSP stipulated. Thus agri sector is completely ignored in the slew of monetary and fiscal stimulus measures announced by the RBI and the government.

Agricultural needs stimulus to sustain growth to feed us and export &earn foreign exchange

The following measures should be taken to sustain agri growth to feed our teeming millions and also export agri commodities to earn the much needed foreign exchange. Full disbursal of agri credit up to mandated limit of net bank credit 18% by March 2009. There is a wide gap of over Rs one lakh crore in disbursals  and in fact outstanding Agri credit declined by Rs11,000 crore by Aug as against huge increase in industrial credit by Rs60,400 Crore during the same period. A sub-limit of 10% should be earmarked to small and marginal farmers as recommended by Arjun Sengupta Commission.
In order to encourage banks to give loans to marginal, small and medium farmers (MSMF), guarantee cover for such loans to be provided on the lines of guarantee cover for MSME by SIDBI and collateral should be waived for loans up to Rs 10 lakh. NABARD to refinance loans given by banks to MSMF by opening a special window for this purpose.
Ban on export of rice to be lifted and export duty and price limit on export of basmati rice should be withdrawn. MSPs should be announced for rabi crops as per formula given by Prof M.S.Swminathan Commission. Additional funds to the tune of Rs 25,000 crore should be allotted for rapid rural infrastructure (irrigation, power, godowns & cold storages, rural roads etc) development