this target within a maximum period of five years starting from april 1, 2013 and ending on march 31, 2018. the share of outstanding advances to agriculture and allied activities in total priority sector advances has increased from 32. 5 per cent in 2000 - 01 to 43. 2 per cent in 2016 - 17 ( chart 2 ). thus, without exaggeration, it is safe to say that financial flows to agriculture have been generous. 4. the government has also undertaken several measures to compensate for the adverse terms of trade and the inert institutional architecture confronting agriculture in order to improve the profitability of crop production. the interest subvention scheme has been running for a decade under which banks and cooperative institutions extend short term crop loans of up to 3 lakh to farmers at a concessional rate of 7 per cent. timely repayment is incentivised by an additional subvention of 3 per cent. the scheme also encompasses other benefits, including post - harvest loans for storage in accredited warehouses against negotiable warehouse receipts ( nwrs ) for upto six months for kisan credit card ( kcc ) holding small and marginal farmers at a concessional rate of 7 per cent in order to avoid distress sales. during 2017 - 18, the central government will provide interest subvention of 5 per cent per annum to all prompt payee farmers for short term crop loans of up to one year. many farmers will thus have to effectively pay only 4 per cent as interest on loans contracted from these institutions. in case farmers do not repay the crop loans in time, they would still be eligible for interest subvention of 2 per cent. on june 14, 2017 the government earmarked a sum of 20, 339 crore for this purpose for 2017 - 18 as against the provision of 15, 000 crore originally made in the union budget ( table 1 ). during 2016 - 17, the volume of short term crop loan lent stood at 6, 22, 685 crore, surpassing the target of 6, 15, 000 crore. 2 / 4 bis central bankers'speeches 6. despite the sizeable volume of subsidised and directed credit flows as well as the various fiscal incentives, indian agriculture is beset with deep seated distortions that render it vulnerable to high volatility. it has perennially been characterised by low investment, archaic irrigation practices, monsoon dependence, fragmentation of land holdings and low level of technology. lack of property rights and low initial net worth of farmers add to

##movable property is a very important concern for not only the non - resident indians – i mean indian citizens residing abroad – but also persons of indian origin. i wish to make it clear that the regulatory framework is pretty liberal inasmuch as it permits both nris as well as pios to acquire any immovable property except agriculture property, plantations or farmhouse. the acquisition however is required to be funded through the banking channel, which is a fair stipulation. while there is no restriction on nris for sale, gift or otherwise transfer any property so acquired, pios can sell the acquired properties only to resident indians. there is also a restriction on nris / pios acquiring property in india jointly with their spouse if she / he is neither resident in india nor an nri nor a pio. such cases require prior approval of rbi and of late, there has been an increase in number of such cases. this is an issue that requires examination in consultation with the government of india. in fact, i have directed an comprehensive review of fema 21 before i embarked on this trip. 22. let me mention in passing the problem of gold, as i realise the gulf region provides perhaps the largest gold market with an indian connection on the western side. the control on gold imports was imposed with a view to getting an immediate handle on the burgeoning current account deficit. the insatiable indian appetite for gold is well known. it had probably been further whetted by persistent inflation on the one hand and increased prosperity on the other. thus restriction on gold import provided a much needed immediate reprieve for restoring the imbalance in the current account. but it is well recognised this cannot be a long term measure lest it engenders undesirable consequences. it will be a challenge to blunt the lure for gold, but it has to be faced in the medium to long term. 23. so far, i have attempted to paint a broad - brush picture of our approach to the management of india ’ s external sector. the narrative has been fairly simple : gradual opening up of the capital account with a cautious eye on the potentially disruptive impact of unbridled capital flows like what countries in several regions have faced in the past and may be facing now, as we talk. notwithstanding the straightforward approach, the devil is in the detail, as they say. from my vantage position, i cannot really say that the regulatory regime that a foreign investor seeking to engage with the indian markets faces