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New Delhi: The Government has extended the debt relief scheme for farmers from June 30 to the end of the year, Finance Minister Pranab Mukherjee announced on Monday.

"The time given to the farmers having more than two hectares of land to pay 75 per cent of their overdues under Debt Waiver and Debt Relief Scheme has been extended from June 30 to Dec 31, 2009," said a government spokesperson.

Presenting the budget for fiscal 2009-10 in parliament, Mukherjee also said the government would set up a "task force to examine the issue of debt taken by a large number of farmers in some regions of Maharashtra from private money lenders who were not covered by the loan waiver scheme announced last year".

Many of the debt-ridden farmers have committed suicide.

The minister said the target for agriculture credit flow was now being set at Rs.325,000 crore for 2009-10. In 2008-09, agriculture credit flow was at Rs.287,000 crore.

He said that the "interest subvention scheme for short term crop loans up to Rs.3 lakh per farmer at the interest rate of 7 percent per annum was to be continued. Additional subvention of 1 percent is to be paid from this year, as incentive to those farmers who repay short term crop loans on schedule".

An additional allocation of Rs.411 crore over the interim budget estimates for 2009-10 has been made for this.

Reacting to the proposal, Raman Mehta of ActionAid, a NGO that works extensively among farmers, told IANS: "The debt relief waiver is at best a temporary measure and will never be enough to revive agriculture.

"For that, the government has to support the small farmer. This budget has allocated a lot of money for irrigation, but has not said anything about small irrigation schemes, which benefit small farmers. Big and medium irrigation projects, on the other hand, displace small farmers and should be stopped."

More on: Union Budget 2009, Budget 2009, farmers, farm relief, debt relief