The Union Finance Minister Nirmala Sitharaman’s third budget indeed has some strong measures which can provide a major push to the agriculture sector as well as allied businesses like dairy.
For instance, 10% increase in the agri credit target by 1.5 lakh crore (in conjunction with the proposal to set up DFI) will improve access to credit across the supply chain, starting with the farmers. Increased outlay to the Rural Infra Development Fund augers well and will help boost the post-harvest, cold chain and warehousing parts of the supply chain.
Budget allocation for quality & traceability of agri commodities is another major initiative in this budget to facilitate export-grade production of Indian Agri Produce.
The extension of operations Greens to 22 commodities (initially only three — – tomato, onion & potatoes) now marks bringing more items from the horticulture side under the broader ambit of the programme.
- We will see more upsurge in both pre-harvest & port-harvest productivity of agri produce,
- Enhance farm income, a good strong step towards shifting farmers from a subsistence level to a micro entrepreneurial level,
- Building of a world-class, efficient agri supply chain – that can evolve into a food-basket for the world.
- The number of Agri-startups (that was only about a dozen a decade ago and has now grown over 1000 in the country) will grow manifold.
- The VC/PE investments in the agri sector will grow manifold (the total investments in the last 10 years has been approximately over $2 billion).
However, there are certain areas that in my view should have received more attention from the government. These include: simplifying the GST regime, exempting some of the agri produce (and agri value added products) from GST, and exempting agri produce warehousing from GST.
In conclusion, I can say that from the perspective of agri-centric businesses, it is a good intentioned budget. However, the resolve shown in the budget has to be backed with the efficient implementation of the new provisions in the next few months.
(Ranjith Mukundan is Chief Executive Officer of Stellapps)