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Rural economy and agriculture will get a boost, by following pronouncements related to credit delievery made by the government in the budget.
1. Each RRB has a sponsor bank. Government propose to hold each sponsor bank squarely accountable for the performance of RRBs under its control. RRBs that adopt a new governance standard and that abide by the prudential regulations will qualify for receiving funds from the Government for their restructuring.
2. Unless cooperative banks are healthy and creditworthy, it would not be possible to reach credit to every farmer in need of credit. In order to find a durable solution, Government propose to appoint a Task Force to examine the reforms required in the cooperative banking system including the appropriate regulatory regime.
Further, the measures for irrigation and water resource management, the support for contract farming and the strong focus on forward linkages and agri-processing are steps in right direction.
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