Finance Minister P Chidambaram on Thursday announced a sharp increase of Rs 1.25 lakh crore in agriculture credit target to Rs 7 lakh crore for next fiscal and allocated additional Rs 10,000 crore in subsidy for implementing the Food Security Bill.

He also allocated 22 per cent more funds to Agriculture Ministry at Rs 27,049 crore for the 2013-14 fiscal, of which Rs 3,415 crore has been earmarked for farm research.

Chidambaram announced extension of interest-subvention on crop loans to private sector banks and commercial banks.

"Agricultural credit is a driver of agricultural production. We will exceed the target of Rs 5,75,000 crore fixed for 2012-13. For 2013-14, I propose to increase the target to Rs 7,00,000 crore," Chidambaram said while presenting the Budget for the 2013-14 fiscal in the Lok Sabha.

The interest-subvention for short-term crop loan will be continued and farmers who repay loan on time will be able to get credit at 4 per cent interest per annum, he added.

"So far, the scheme has been applied to loans extended by public sector banks, Regional Rural Banks and cooperative banks, I propose to extend the scheme to crop loans borrowed from private sector banks and scheduled commercial banks in respect to loans given within the service area of the branch concern," the Minister said.

Looking at the success of the scheme -- Bringing Green Revolution in the Eastern India, Chidambaram allocated Rs 1,000 crore for the next fiscal. Another Rs 500 crore was allocated for crop diversification in states covered during the Green Revolution such as Punjab and Haryana, which are facing stagnation in farm yields.

On proposed Food law, the Minister said: "I sincerely hope Parliament will pass the Bill as early as possible. Over and above the normal provision for food subsidy, I have set apart Rs 10,000 crore towards the incremental costs that is likely under the Act."