Budget 2013: FM P Chidambaram holds first pre-budget talks

NEW DELHI: P Chidambaram on Wednesday met representatives from the agriculture sector, kicking off consultations his ministry holds with stakeholders before the annual budget that is usually presented on the last day of February. Around 20 experts from different farm groups and institutes participated in the pre-budget meeting.

In the consultations, the government's advisory body on farm prices, the Commission for Agricultural Costs and Prices (CACP), suggested that finance ministry should adopt direct cash transfer to beneficiaries for rationalising food and fertiliser subsidies, which could rise to 2,00,000 crore next fiscal.

The CACP also sought stable export policy for farm commodities and promotion of palm oil to cut vegetable oil imports.

"Rising current account deficit is the biggest problem that the government currently facing. So, we have pitched for rationalisation of food and fertiliser subsidies in the forthcoming Budget," CACP Chairman Ashok Gulati said after the pre-budget meeting.

Gulati said the government can straight away save Rs 50,000 crore by plugging the leakages through conditional cash transfer (CTT), which can be implemented initially in 33 cities of more than one million population.

The government can also save additional Rs 10,000-15,000 crore from storage cost of grains and another 20,000 on fertilizer through these transfers, he suggested. Gulati pointed out that 40% food meant for public distribution system (PDS) is diverted to the open market.

The agriculture sector representatives also demanded deregulation of urea sector to attract more investment and improve balanced use of fertilisers.

Other demands included pension and housing loans for farmers, credit at 3% interest for construction of rural godowns, exemption of duties on all imported farm machineries for 5 years and increased budget allocation for farm research activities.

Consortium of Indian Farmers Association recommended sops to attract private investment in food processing infrastructure and irrigation projects. US-based agri-food giant Cargill recommended the government to adopt tariff value mechanism.