The Indian government is to cancel the entire debt of the countrys small farmers in a giant scheme that will cost 600 billion rupees (75 milliarder DKR). All farmers with land of less than two hectares will be able to apply.
The move is a centrepiece of Indias latest budget, with the government also increasing education spending by 20 per cent and health funding by 15 per cent.
Widely seen as a populist budget ahead of elections due by May 2009, Delhi has also pledged to control food prices.
Reaction from farmers groups has so far been mixed, with some complaining that the land-size criteria is too strict, and that those with larger fields will unfairly miss out.
Mohan Manidwar of Farmers Agitation Group, which highlights the large number of impoverished farmers committing suicide, said most farmers in the Vidarbha region of central Indian would miss out.
Finance Minister Palaniappan Chidambaram said the governments aim was to boost employment and abolish poverty and inequality in the country of 1,1 billion people, where some 260 million struggle on less than one dollar (ca. 5 DKR) a day.
Among the help for farmers, Chidambaram proposed extending crop insurance schemes and boosting tea, cashew, coconut and pepper sectors, while 200 billion rupees was set aside for irrigation. Spending on a rural job guarantee scheme is to rise 60 billion rupees to 160 billion rupees.
T.N. Ninan, publisher of the daily Business Standard called the relief plan “the single biggest giveaway in Indias fiscal and banking history” but questioned how it would be applied, noting many debts were to money-lenders, among them some loan sharks.
Farm growth is forecast to slow to 2,6 percent this fiscal year from 3,8 percent the previous year, raising alarm among experts about Indias ability to continue to feed itself.
Unveiling the latest budget, Finance Minister Chidambaram said Indias annual economic growth was now running at 8,7 per cent.
Mr Chidambaram added that the government was determined to see India become self-sufficient in food grains. He also announced higher spending on rural infrastructure and highways.
Kilde: www.worldbank.org
