Agriculture & Allied Sector

Key announcements for the sector:

The total budgetary allocation for the Agriculture and Allied Sector for the current year stands at INR 1.52 lakh crore.

Enhancing Productivity and Promoting Sustainable Agriculture

• A comprehensive review of the existing agricultural research setup will be undertaken with the objective of enhancing productivity and developing climate-resilient crop varieties.
• A total of 109 new high-yielding and climate-resilient varieties of 32 field and cultivation crops will be introduced for the benefit of farmers.
• An ambitious initiative has been proposed to induct one crore farmers into natural farming practices over the next two years, supported by certification and branding mechanisms.
• To provide requisite support to natural farming, 10,000 need-based bio-input resource centers will be established across the country.

Digital Public Infrastructure (DPI) to modernize agricultural landscape

• The implementation of DPI in agriculture will be facilitated in collaboration with state governments to ensure comprehensive coverage of farmers and their lands within a period of three years.
• A digital crop survey for Kharif crops will be initiated in 400 districts, aimed at enhancing the accuracy and efficiency of crop data collection.
• The details of six crore farmers and their lands will be integrated into farmer and land registries, facilitating better record-keeping and management.

Strengthening Value Chain Development

• A comprehensive strategy will be implemented to achieve self-sufficiency in pulses and oilseeds, encompassing production, storage, and marketing.
• Large-scale clusters for vegetable production will be established in close proximity to major consumption centers, aimed at reducing transportation costs and enhancing freshness.
• Farmer-Producer Organisations (FPOs), cooperatives, and start-ups will be promoted to develop and manage vegetable supply chains, including collection, storage, and marketing, to ensure better price realization for farmers.

Strengthening institutional and financial mechanism

• National Cooperation Policy shall be formulated for systematic and all-round development of cooperative sector.
• Jan Samarth-based Kisan Credit Cards will be enabled in five states.
• Financial support to set up 50 multi-product food irradiation units in the MSME sector.

Boosting allied sectors

• Financial support for setting up a network of Nucleus Breeding Centers for Shrimp Broodstocks shall be provided.
• Financing for shrimp farming, processing and export will be facilitated through NABARD.
• Basic Customs Duty (BCD) on certain broodstock, polychaete worms, shrimp and fish feed shall be reduced to 5 per cent.
• Customs duty shall be exempted on various inputs for manufacture of shrimp and fish feed.

Incentives

• Proposal to introduce an Employment-Linked Incentive (ELI) scheme to boost job creation in labor-intensive sectors, offering incentives like salary subsidy and provident fund reimbursements.

Implications for the sector:

Focus on R&D to enhance productivity and climate resilience is a welcome step to mitigate the climatic and food security challenges

• Release of 109 high-yielding and climate resilient varieties for farmers is a significant step, however awareness and easy availability of these varieties will be crucial in attaining high crop yield and enhancing farmer income.
• R&D should focus on ‘lab to land’ ecosystem for greater technology adoption.
• With the Indian organic food market projected to grow, the prospects of natural farming in India are promising. Cost and time effective mechanism for certification of organic products will be imperative in strengthening natural farming prospects among farmers.

Digital Public Infrastructure (DPI) in agriculture, a step towards agricultural modernization and effective and inclusive planning

• It will enable conceptualization of targeted interventions based on accurate on-ground data.
• Jan Samarth based Kisan Credit Cards will increase financial access for farmers.

Focus on entire crop value chain from production to marketing

• Transitioning from a livelihood approach to value chain approach is a more holistic and sustainable proposition. Crucial aspect would be to build capacities of all the actors in the value chain.
• Focused on the themes of ‘Atmanirbharta’, the program for achieving self-sufficiency in pulses and oilseeds can deliver significant impact in reducing their imports.
• Cluster based approach for vegetable production closer to consumption centers will bring in supply chain efficiencies and ensure remunerative prices.

Institutional strengthening and partnerships

• National Cooperation policy would promote the cooperative based economic development model and would help grow the rural economy.
• Inclusion of FPOs, co-operatives and start-ups as a catalyst in the agri ecosystem will strengthen the delivery mechanism.
• Investment in capacity building and bridging the techno-commercial skill gap of these institutions would be important to enabling them to act as change/delivery agents.

Shrimp production and exports

• Various financial interventions announced will likely help boost shrimp farming and processing, in addition to increasing its export competitiveness.

Tax related

• Ease of doing business by reduced litigation, tax certainty and digitization of assessment procedures.
• Simplicity of compliance with introduction of new safe harbor rules- detailed rules are awaited and rationalization of TDS rates.
• Incentives in form of lower tax rates to foreign companies to bridge the gap of rate between domestic and foreign companies.

• No significant changes in tax rates for taxpayers to provide stability.
• Reduced tax outflow for individuals under new regime leading to increase in disposable income and consequential spending patterns.

Incentives

• On the other hand, the proposed ELI scheme is a strategic move to address unemployment and stimulate economic growth by encouraging companies to expand their workforce. This aims to mitigate ‘jobless growth’ and enhance domestic production and exports.