Govt may up farm credit target to Rs 10-12lakh cr in FY18: PwC

The government may announce increase in agri-credit target to Rs 10-12 lakh crore in the 2017-18 Budget and even reduce the interest rates considering excessive cash flow in banks after demonetisation, consulting and accounting firm PwC India said today.

For the current 2016-17 fiscal, the government has set a target to disburse agri credit of Rs 9 lakh crore, of which, Rs 7.56 lakh crore credit has been disbursed to farmers till September this year, as per the government data.

"Agriculture credit might increase to around Rs 10-12 lakh crore keeping in mind the excessive flow of cash in the bank after demonetisation scheme," PwC India Director Ajay Kakra said sharing pre-budget expectation for the farm sector.

In the 2017-18 budget, he said the government may announce cut in the interest rates for agri-credit under different schemes as well, he said in a statement.

Postal network might also be utilised for further linking the new agriculture credit schemes with the farmers directly.

The General Budget for the 2017-18 fiscal is scheduled to be presented on February 1.

According to PwC, the government is expected to focus on the Pradhan Mantri Krishi Sinchai Yojana in the 2017-18 budget to bring in more land under irrigation after a target of bringing in around 28 lakh hectare was set for this year.

The government may also announce subsidy on electricity charges and purchase of farm equipment for irrigation practices.

"Government is also likely to look for renewable energy alternatives for farm equipment backed by incentive/subsidy related schemes for both farmers and natural resource harnessing equipment manufacturers," PwC said.

That apart, PwC said private-sector partnership towards conversion of city waste to agricultural compost might gain momentum and there might be announcements pertaining to government support in terms of both infrastructure and incentives to encourage private sector investment.

Steps for digitalization of market-linkages such as e-platform for agri-marketing seems likely to gain momentum and there might be steps to link it with digital payments considering it as one of the steps for marching towards digital economy.

The farm schemes introduced this year such as Soil Health Card and opening up of around 2000 soil and seed testing centers are likely to be increased both in terms of scale and scope keeping in mind the productivity enhancements objectives, the PwC India added.