2023-24 Pre-Budget expectations of the agriculture & allied sector

NEW DELHI, 31 January 2023: As the union Budget 2023 is scheduled for 1February 2023, Agritimes.co.in received lots of suggestions and view that needs to be focused for the agriculture and allied sector.

We are sharing this with our readers on the feeling and sentiments of the industry.

Agritech

A digital platform enabling online transactions of products and services in rural India, Hesa founder & CEO said," In India, more than half a percent of people depend on agriculture for their livelihood. It's a perfect time for the Government to support technology adoption. Mechanization, IoT, AI/ML, drones, and other technological advancements can be important drivers to boost growth and agricultural productivity and increase production efficiency at scale. The Government can add these technological interventions that help deliver market and mandi prices, supply chain visibility, food security, etc., to current policies like the Digital Agriculture Mission".

"Small farmers in India depend on government and non-profit programs at every step of the crop cycle. Timely, accurate, and hyperlocal AI-based early-pest warning and advisory can augment human capabilities to overcome systemic challenges in these large-scale programs. In the upcoming budget, a continued focus on building sustainable AI capacities to support large-scale deployment of AI solutions will go a long way in creating a material impact on the lives of the underserved people of India. The opportunities are immense, the time is right, and it is for us to get this done," Shekar Sivasubramanian, CEO, Wadhwani AI adds. 

Drip irrigation

Speaking on the expectation about the budget 2023-24, Randhir Chauhan, MD, Netafim India shared various points. 

1] Process streamlining measures in irrigation subsidy

The delays in the disbursal of micro-irrigation subsidies under the PMKSY program have hampered its progress. Online portal for an end-to-end process execution and visibility, transparency in the process for fund disbursement, ensuring checkpoints at various stages and adherence to timelines would bring efficiency in subsidy disbursal and support farmers to be debt-free in a faster way.

2] Diversification programs to increase productivity and value in different crops like oilseeds, oil palm and rice with a special focus

The 12 percent of the cropped area under Fruits & Vegetables (F&V) leads to 24 percent in value terms, in contrast to 13 percent land under oilseeds which gives only 6 percent in value terms because of lack of scalability. Addressing the domestic demand for edible oils, it is inevitable to promote domestic oilseeds and oil palm cultivation with higher productivity measures. Similarly, rice being one of the crucial crops both in terms of area coverage and usage of water, promoting drip technology will help increase the yield, save water and reduce carbon emissions. Drip irrigation adoption also facilitates crop diversification, thus, making a direct impact on farmer incomes.

3] Making PDMC a Centrally Sponsored Scheme (CSS) with mission mode execution through PMU (Project Management Unit)

The 10 million hectare coverage target in 5 years has current achievement levels at ~50 percent. It is primarily, because there are certain gaps in States alignment with the Centre in terms of execution of the scheme and overall focus. Making PDMC a CSS scheme with a mission mode execution focus through Project Management Unit (PMU) like other key flagship schemes will go a long way in overall achievement. Basis the assessment, the subsidy can be capped at 50 percent.

4] Need a push for adoption of Drip irrigation in field crops like Rice and wheat

Looking at the ever-depleting Ground water table, policymakers should push for Drip irrigation usage in water-guzzling crops such as rice, wheat, and sugarcane. Currently, the penetration of drip technology in these crops is low. Additionally, drip irrigation helps in reducing Greenhouse gas in crops like rice.

5] Providing infrastructure status to the Micro-irrigation industry

Infrastructure status would help the micro-irrigation manufacturer (95 percent of which comes under MSME) to reduce operating costs, thereby accelerating the industry growth, and bringing the equipment cost down for the farmer community.

6] Aligning different schemes together for exponential benefit – Solar and Micro-irrigation, Agriculture alongside Solar installations, and others

Focus on renewable energy like solar will ensure energy security, especially in agriculture and the rural landscape as well as address environmental concerns. Making farmers energy-sufficient would also reduce the burden on government energy subsidy bills. Solar installation-friendly agriculture would help farmers with reduced operational costs, boost land utilization and improve overall income.

7] Focus on creating infrastructures to support innovation and digitalization

Dedicated focus and fund allocation in the upcoming budget for infrastructure in rural areas to support the digitalization of agriculture will put the sector growth on the fast track. Currently, India is spending less than 1 percent of Agri GDP on R&D. An Agri innovation fund, which supports ag-tech solutions, start-ups and digitalization at different levels of the Agri value chain can transform the agriculture economy in the future.

8] Policy for recycling in Agriculture

Plastics are used extensively in farming. Focus on creating sustainable means for disposing of plastics and policy intervention for recycling plastic that is used in agriculture would go a long way to align environmental conservation.

Dinesh Patidar, Chairman and Managing Director of Shakti Pumps (India) said, "We anticipate the Union Budget to place a major emphasis on the energy sector, considering the stated targets in green energy and its significance for economic growth, the government is likely to broaden the PLI incentives to integrate supply chains, fund and mobilize resources, and counteract the possibility of global risks and slowdown in development. To meet the goal of using non-fossil fuel power, solar will continue to play a significant role. Tax holidays should be provided to increase the ease of doing business for this technologically intensive industry. The government could also consider allowing the availment of credit or reducing the GST rates for the supply of raw materials used in the manufacturing of solar products. A major focus of the Budget will be to encourage the manufacturing of domestically produced cost-effective solar modules and a relief in GST for the R&D products required for the development could go a long way in establishing sufficient infrastructure for research and development that meets global standards at competitive prices. We believe that the government will offer concessional import duties on solar modules, which could defeat Atmanirbhar Bharat's purpose of import substitution.”

“The PM-KUSUM scheme is a significant initiative for solarization that focuses on farmers who hold the majority of the market share for solar pumps. However, progress has been slow thus far; some states have approved solar pumps but haven't installed any while most face the challenge of increasing awareness among the farmers about the scheme. In the future, we anticipate the availability of financing options for farmers in the form of formal credit to cover costs that are not subject to subsidies, the adoption of the proper pricing model to effectively expand the installation to remote areas, and the streamlining of administrative procedures. Another major focus of the Budget will be to provide the necessary infrastructure for the adoption and expansion of electric vehicles, by offering tax breaks and development incentives. After the success of the First & Second Round of Production Linked Incentive (PLI) Scheme, the third round should also be announced to attract investment in Electric Vehicle Component Manufacturing by offering incentives to Non-Automotive Investor /startups equivalent to the incentive available to the existing Automotive Investor," Patidar adds.

Image credit: postsen.com