The upcoming budget is expected to ease repayment norms and raise credit limits among several initiatives to bolster agriculture amid weather-related challenges.

In the past few years, monsoon disruptions have impacted agriculture, leading to shortages and food price inflation apart from hurting farmers’ livelihoods.

The Centre is considering easing repayment norms for farmers by allowing them to settle the entire loan interest at one-go at the end of the tenure instead of having to make periodic payments. The idea is to mitigate liquidity constraints during cultivation.

“The government is also considering raising the agricultural loan credit limit, unchanged at ₹3 lakh since 1998, to ₹4–5 lakh reflecting rising input costs and current financial needs,” .

The move aims to support the agricultural sector amid escalating costs and provide farmers with more accessible and flexible credit options.

 The Kisan Credit Card (KCC), with a credit limit of up to ₹3 lakh, offers several benefits, including interest subvention, repayment incentives, crop security, and insurance.

Loans for seasonal agricultural operations, such as growing foodgrains, have repayment schedules aligned with the crop harvesting cycle. The tenure for such loans is typically about 12 months, enabling farmers to repay after selling their produce.

In cases of natural calamities such as drought or floods, the repayment tenure may be extended with approvals.

Agricultural associations and farm economists at a pre-budget consultation with the finance minister Nirmala Sitharaman, and top officials of the ministry of finance, also suggested the scrapping of the goods and services tax (GST), on agricultural inputs, such as seeds, manure and pesticides, enhancing the cash benefit under the PM Kisan scheme on the back of rising inflation, in addition to a financial package for improving pulses and oilseed production.

Other suggestions, included doubling the minimum income support provided to farmers under the PM Kisan Samman Nidhi scheme to ₹12,000 annually, bringing more crops under the minimum support price (MSP), which is the floor price set by the Centre for certain crops that farmers can receive for their produce.

At present, there are about 22 crops, which have a minimum support price set by the government, including paddy, jowar, bajra, ragi, maize, moong, urad, cotton, jute, and wheat.

The Union budget 2024-25 allocated ₹1.32 trillion to the agriculture sector, a 4.58% increase from the revised estimates (RE) for 2023-24.

India is against a move led by countries such as China to push a proposal on investment facilitation at the World Trade Organization (WTO), a senior government official said on Tuesday.

A China-led group of 128 countries is pushing for the Investment Facilitation for Development (IFD) proposal. The proposal will be binding for only the signatory members.

“We are opposing this. It is a pluri-lateral agreement and it is also not a trade agreement,” the official said.

India will also submit papers in the WTO against this, the official said, adding that such agreements would dilute the multilateral nature of the Geneva-based organisation.

The IFD was first mooted in 2017 by China and other countries that depend heavily on Chinese investments, and countries with sovereign wealth funds are party to that pact. Among major countries, the US is also sitting out of the agreement.

The World Trade Organization deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.

India has strongly asked for finding a permanent solution to public stock holding of grains for food security, an issue which is pending for over two decades.

“India is not going to compromise on food security and livelihood issues of its farmers,” the official said, adding that India’s support measures to the farmers are for their sustenance.

On the other hand, production-based support measures to farmers distort trade. India provides a meagre subsidy ​of $465 per farmer against $81,000 per farmer by the US in 2022-23.

“Going forward, if at all any decision will have to come on agriculture, then the first thing that will be done is our permanent solution to public stock-holding, otherwise we will not allow any other decision in the agri,” the official said, adding, it is a “big red line” for Indias and it is non-negotiable.

In another move, India has called for adopting a ‘per capita distribution of subsidies’ criteria to address concerns over overfishing and capacity under the WTO framework, according to a document.

Highlighting the stark disparity, an Indian paper has noted that it provides a modest $35 per fisher annually, compared to subsidies as high as $76,000 per fisher per year in some European nations.

The document was submitted by India and will come up for discussion in the General Council meeting of the World Trade Organisation (WTO) at Geneva on 16-17 December.

The issue is being negotiated at the WTO as member countries are discussing reaching an agreement on disciplining subsidies that lead to overfishing and overcapacity. In 2022, the countries finalised a pact on stopping subsidies for illegal, unreported and unregulated fishing activities.

Q) What are the direct and indirect subsidies provided to farm sector in India? Discuss the issues raised by the World Trade Organization (WTO) in relation to agricultural subsidies.

Restoring the growth-inflation balance will be the most important task ahead for the new Reserve Bank of India Governor Sanjay Malhotra as he takes charge on Wednesday, said the outgoing Governor Shaktikanta Das.

“I think restoring the inflation-growth balance is the most important task ahead of the Reserve Bank, and I am sure the team RBI, under the leadership of the new governor, will take it forward,” .

Das also listed other challenges awaiting the central bank, including a changing global order and cybersecurity concerns, 

The government on Monday appointed Malhotra, the current revenue secretary, as the new RBI governor. The appointment comes amid an ongoing war on inflation, a sudden slow turn in economic growth and pressures on exchange rate stability following the election of Donald Trump as US president.

Das also noted that while differences in viewpoints were inevitable, most were resolved through internal dialogue.

Female labour force participation rate (LFPR) increased in almost all states in India during 2017-18 to 2022-23, with rural areas seeing larger gains than urban areas, a new working paper released by the Economic Advisory Council to the Prime Minister (EAC-PM) stated.
States such as Bihar, Punjab, and Haryana have consistently reported very low levels of female LFPR, the paper stated, underlining that this inter-state variation in female LFPR is important in the context that Haryana and Punjab are among the richest states within India, while Bihar is the poorest state.

Rural female LFPR rose to 41.5 per cent (~69 per cent growth) from 24.6 per cent during 2017-18 to 2022-23, while urban LFPR rose to 25.4 per cent from 20.4 per cent, the new working paper titled Female Labour Force Participation Rate: An Observational Analysis of the Periodic Labour Force Survey (PLFS) 2017–18 to 2022–23, and co-authored by EAC-PM Member Shamika Ravi and Mudit Mapoor of EPU, ISI–Delhi, said.