Budget 2023: Can govt provide much-needed impetus to spur growth in agrarian sector?

Agriculture is the sunrise sector of India and employs the majority of the workforce and, for a variety of reasons, has dominated national policy and academic debate in recent years.

India's Finance Minister Nirmala Sitharaman holds up a folder with the Government of India’s logo as she leaves her office to present the federal budget in the parliament in New Delhi, India, February 1, 2022.Pic: Reuters

Agriculture is the sunrise sector of India and employs the majority of the workforce and, for a variety of reasons, has dominated national policy and academic debate in recent years. However, the industry is still plagued by supply chain issues and a lack of adequate warehousing facilities. The Budget this year is expected to have a significant impact on the agriculture sector. The industry sought assistance from the government in the form of tax breaks and certification frameworks to boost industry advancement.

There are many lenses with this year's budget being viewed. With the growing startups in the country, various leaders from across segments of agriculture have their views. Following are the recommendations for the upcoming Union Budget 2023-24.

Aquaculture, being one of the highly fragmented sectors, needs a lot of support. Talking about rising production costs in the aquaculture sector Rajamanohar Somasundaram, founder & CEO, Aquaconnect said, "In recent times, farmers are adversely impacted by the rising production cost due to the increased farm input prices and making it difficult for our exports to compete with our counterparts. We expect favourable policies and subsidies to help reduce feed prices and power costs to control the prices."

Although aquaculture carries high production risks, unlike agriculture farmers, fish and shrimp farmers are yet to get subsidies on insurance premiums. Lack of subsidy on insurance premiums demotivates the farmers’ from availing any risk mitigation for their crops, as this adds up the production cost significantly. Govt. support on premiums will help farmers to a great extent to mitigate production risks."

Ashok Prasad, co-founder and CEO, Unnati, said that the Finance Minister has to do a balancing act in the budget. It is anticipated that the FY23–24 budget would significantly emphasize private sector investment to help farmers protect their crops from the effects of climate change. The government might relax regulations to make investing easier for the private sector.

He said that “shortcomings in post-harvest infrastructure are often critical factors in determining how much food is lost in the supply chain. A lack of processing equipment, driers, cold chain facilities, storage etc. often leads to the unnecessary loss of produce".

"Government should prioritize effective warehouse management and expanding finance availability will aid farmers in safeguarding their harvest from external threats," he said.

Tarun Arora, Director Single Family Office, IG International said that sustainable production of fruit crops is a critical sector where the government should focus. "It is suggested that the government comes up with a liberal allocation for setting up post-harvest facilities. By incentivising private investment and channeling agritech investments through government-led initiatives, the industry can propel growth and the economy," he said.

Amith Agarwal, co-founder and CEO, Agribazaar said that while the government has taken many initiatives to support the industry over the last few years, it is time to focus on promoting its growth.

Narendranath Damodaran, Integrator at Pradan, said that the focus needs to be on regenerative agricultural practices which will ensure ecological security and food safety.

"MSMEs, especially around food processing, need to be incentivised so that a lot of employment gets created at the level of the local economy. Well in line with the principle of “Vocal for local”, the government should invest in creating local production and marketing clusters," he said.

Besides, he said that there is a need to enhance MGNREGA allocation to meet all the wage employment requirements, which in turn can build large-scale livelihood assets in terms of farm ponds and water harvesting structures. The government should also consider increasing farmer incentives under PM-KISAN.

Also, read- Budget 2023: What is Finance Bill and how is it different from Money Bill?

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Budget 2023