India is to embark on an overhaul of its struggling farm sector in an effort to cool rising food prices that have landed the country with the highest inflation of any leading Asian economy.
Indian Finance Minister Pranab Mukherjee put the rural economy at the heart of a national budget on Monday, saying ridding the farm sector of crippling (lammende) supply bottlenecks would be his “focus” in the coming fiscal year.
Mukherjee announced a reform in how subsidies are paid to the poor, saying he would tackle misuse of handouts for fuel and fertilizers (kunstgødning) by setting up direct cash payments to poverty-hit families.
A national food security bill, which will provide a legal guarantee of subsidized food for low-income families and making food cheap for the poor, would also be introduced in the current parliamentary session, he announced.
Mr Mukherjee promised action on food security and pledged an increase in social spending. – The country has carried for long enough the burden of hunger and malnutrition, he said.
He announced a substantial increase in funds for education and health. Social spending funds are, too, set to increase by 17 per cent.
However, the announcement has sparked worries of a huge fiscal cost. India faces huge inflation, which has drawn criticism from the opposition.
Anger has also been rising over food supplies in the country’s streets as millions go hungry, while some food supplies have been rotting in warehouses.
HJÆLP TIL MIKROFINANS
Mr Mukherjee announced a 22 million US dollar fund to help the struggling micro finance industry which is facing a liquidity crisis after borrowers in parts of India stopped repaying loans.
Kilde: www.worldbank.org
