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LATEST NEWS UPDATES | Gujarat farmers unlikely to benefit from sops doled out by State govt -Rajalakshmi Nirmal

Gujarat farmers unlikely to benefit from sops doled out by State govt -Rajalakshmi Nirmal

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published Published on Oct 30, 2017   modified Modified on Oct 30, 2017
-The Hindu Business Line

Costs, prices, credit issues are a challenge, just as in other States

Ahead of the Assembly elections, the Gujarat government has announced a slew of measures to woo rural voters. This includes waiver of GST on equipment used in micro-irrigation, 0 interest on loans up to ?3 lakh for farmers, and a bonus of ?500 per quintal on cotton.

But these sops are not likely to make farmers in the State happy.

The average growth in Gujarat’s agri-GDP between 2002-03 and 2013-14, when Narendra Modi was the Chief Minister, was 8 per cent. In this period, all-India growth was about 3.3 per cent. But, growth has since declined in Gujarat. In 2014-15, its agri-GDP shrank by 1 per cent and there was not much improvement in 2015-16 either.

As per the Centre’s Agricultural Statistics report, 2016, farmers’ income in Gujarat, at ?7,926, is much lower than that of their counterparts in Punjab (?18,059), Haryana (?14,434) or Kerala (?11,888).

As of January 5, 2017, only one-fourth of the farmers in the State were insured under the Pradhan Mantri Fasal Bima Yojana. Of the 11.9 lakh farmers with crop insurance, 11.89 lakh were farmers with a bank loan.

The deficient monsoon in 2014-15 and 2015-16 intensified problems. In 2016-17, there were good rains, but a bumper harvest in groundnut and other crops made prices plunge.

The interest waiver on loans is only short-term relief. With over 60 per cent being small and marginal farmers, informal channels still play a large role in credit.

The State bankers’ committee report shows that against the RBI’s target of 8 per cent credit for small and marginal farmers, Gujarat’s farmers in this category got only 5.44 per cent as of September 2016. The large section of farmers who are dependent on non-institutional channels for credit, will get no relief from the interest waiver.

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The Hindu Business Line, 29 October, 2017, http://www.thehindubusinessline.com/news/national/gujarat-farmers-unlikely-to-benefit-from-sops-doled-out-by-state-govt/article9929780.ece?homepage=true


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