The Government is investing heavily in the Accelerated Irrigation Benefit Programme and the Rainfed Area Development Programme and in the management and augmentation of water resources. Notwithstanding some shortcomings, the growth of agricultural credit has been impressive and for this I have to thank our scheduled commercial banks and Regional Rural Banks. Between them, they account for about 75-79 per cent of agricultural credit disbursed during any year. We will exceed the target set for 2007-08. For 2008-09, I propose to set a target of Rs 2,80,000 crore. Short-term crop loans will continue to be disbursed at 7 per cent per annum and I am making an initial provision of Rs 1,600 crore for interest subvention in 2008-09. What ails agriculture, among other things, is the fall in investment. However, there seems to be a turnaround. Gross Capital Formation (GCF) in agriculture as a proportion of GDP in the agriculture sector has improved from a low of 10.2 per cent in 2003-04 to 12.5 per cent in 2006-07. This, however, needs to be raised to 16 per cent during the Eleventh Plan to achieve the target growth rate of 4 per cent. Government is investing heavily in the Accelerated Irrigation Benefit Programme (AIBP) and the Rainfed Area Development Programme and in the management and augmentation of water resources. Under AIBP, 24 major and medium irrigation projects and 753 minor irrigation schemes will be completed in this financial year, creating additional irrigation potential of 5,00,000 hectares. The outlay for 2007-08 was Rs 11,000 crore with a grant component of Rs 3,580 crore. These are being increased in 2008-09, and the estimated outlay is Rs 20,000 crore with a grant component of Rs 5,550 crore. The Rainfed Area Development Programme has been finalised and will be implemented in 2008-09 with an allocation of Rs 348 crore. Priority will be given to those areas that have not been the beneficiaries of watershed development schemes. The centrally sponsored scheme on micro irrigation launched in January 2006 has brought an area of 5,48,000 hectares under drip and sprinkler irrigation within two years. I propose to allocate Rs 500 crore for the scheme in 2008-09 with a target of covering another 4,00,000 hectares. Pacts with World Bank Agreements have been signed with the World Bank by the Governments of Tamil Nadu, Andhra Pradesh and Karnataka under the project to repair, renovate and restore water bodies. The three agreements are for a total sum of $738 million that will benefit a command area of 9,00,000 hectares. I am confident that similar agreements will be signed soon between the World Bank and the Governments of Orissa, West Bengal and some other States. While these ongoing programmes will raise the level of investment in agriculture, I think that we need an ambitious scheme of a much larger proportion. Government is of the view that massive investments are required to be made in irrigation projects. Recently, Government has approved 14 projects that satisfy certain criteria as national projects and three of them alone would require Rs 7,000 crore during the Eleventh Plan period. Having regard to the magnitude of the challenge, I propose to establish the Irrigation and Water Resources Finance Corporation (IWRFC) with an initial capital of Rs 100 crore contributed by the Central Government. State Governments and other financial institutions will be invited to contribute to the equity. It is our intention to mobilise the very large resources that will be required to fund major and medium irrigation projects. I hope to be able to incorporate IWRFC as a company before March 31, 2008. Pending a decision on an alternative crop insurance scheme that is acceptable to the farmers as well as viable to the insurer, the National Agriculture Insurance Scheme (NAIS) will be continued in its present form for kharif and rabi 2008-09. I propose to provide Rs 644 crore for the scheme. Government will continue to provide fertilisers to farmers at subsidised prices. Government is examining proposals to move to a nutrient based subsidy regime and alternative methods of delivering the subsidy.