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It will assist. But the financial system wants fast help too
editorials
Updated: Aug 10, 2020 20:10 IST
On Sunday, Prime Minister Narendra Modi launched the Agriculture Infrastructure Fund (AIF), a medium- to lengthy-time period infrastructure mortgage financing facility for enhancing submit-harvest infrastructure in India. The scheme is geared toward offering ₹1 lakh crore price of loans for such initiatives till 2029. The creation of a complete submit-harvest infrastructure in India is usually a sport-changer in agriculture. Last yr, Rameswar Teli, minister of state for meals processing industries, informed the Lok Sabha that 16% of fruit and veggies and as much as 10% of cereals, oil seeds and pulses are wasted within the nation as a consequence of insufficient submit-harvest infrastructure.
Most of the storage infrastructure within the nation just isn’t owned by farmers. This additionally implies that they’re pressured to promote their complete output at one go instantly after the harvest is over, and when costs are low. Because AIF is attempting to rope in farmers’ producers organisations (FPOs) to construct such infrastructure, it’s going to hopefully additionally tackle this asymmetry and permit farmers to dispose their produce in a phased method to avail higher returns. This will go a good distance in growing the bargaining energy of Indian farmers.
Laudable because the scheme is, its advantages will solely accrue within the medium- to lengthy-time period. The authorities should not lose sight of the fast financial problem of boosting progress and incomes. Even earlier than the Covid-19 disaster, the financial system was caught in one among its worst deceleration phases. The pandemic’s disruption has made issues worse. If the scenario doesn’t revive, it’s unlikely that FPOs and different meant beneficiaries of AIF loans can be captivated with committing to such investments. There is a rising consensus that the financial system wants an enormous fiscal push to spice up financial sentiment — RBI’s Consumer Confidence Survey (CCS) launched final week reveals that client confidence has plummeted to an all-time low — and progress. The optics of Sunday’s announcement — AIF was authorized by the Cabinet a month in the past, and the precise mortgage disbursal on Sunday was simply ₹1,000 crore — is yet one more sign that the precise fiscal enhance to the financial system doesn’t match the dimensions of this authorities’s huge-ticket bulletins. This wants to alter.
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