Krishi VaartaOutlook Agriculture
Suggestion of setting up a central institution for agriculture
New Delhi: A group formed by the Reserve Bank of India (RBI) has recommended setting up of a central body, like the GST Council, to implement reforms in the agricultural sector and increase credit support. The group has recommended transferring subsidy directly to the farmers in their accounts and discontinuing the loan waiver.
The group has also recommended a system to monitor the actual utilization of funds in the loan lending scheme by pledging gold. For this, banks have been suggested to set up an Information Management System (MIS), which can be a part of their core banking solution and indicate misuse of credit.
The internal working group was set up by the RBI in February this year. It was given the responsibility to study regional disparities and other issues in the matter of agricultural credit and make recommendations for their resolution.
The group has recommended that the Government of India should set up a central body on the lines of the GST Council, which has representatives from both the Center and the states, and implement reforms in the agricultural sector. Also, instead of giving interest subsidy and subsidy on agricultural loans, money should be transferred directly to the farmers' accounts (direct benefit transfer-DBT).
The report states that at present there is no database of the Indian agricultural sector, which makes it difficult to monitor and lack effectiveness in planning / policy making.
Source - Outlook Agriculture, 14 September 2019
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