Reactions from industry captains on agriculture-related announcements in the current Budget that will have a bearing on allied retail businesses
New Delhi: Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023, the fifth budget of Modi 2.0 on February 1, 2023. In the last full-fledged Budget before the general elections next year, Sitharaman presented a budget that many consider could lead India onto the growth path of the future. Sitharaman announced major changes in tax slabs under the new tax regime that would put more money into the hands of the middle class and that brings cheers to many businesses from FMCG companies to retailers.
This Budget hopes to build on the foundation laid down in the previous Budget, and the blueprint drawn for [email protected] “We envision a prosperous and inclusive India, in which the fruits of development reach all regions and citizens, especially our youth, women, farmers, OBCs, Scheduled Castes and Scheduled Tribes,” said Finance Minister, Nirmala Sitharaman in her Budget speech.
She further added, “In the 75th year of our Independence, the world has recognised the Indian economy as a ‘bright star’. Our current year’s economic growth is estimated to be at 7%. It is notable that this is the highest among all the major economies. This is in spite of the massive slowdown globally caused by Covid-19 and a war. The Indian economy is therefore on the right track, and despite a time of challenges, (is) heading towards a bright future.”
In a series of stories, IndiaRetailing brings you the opinion of leading industry experts on the Union Budget 2023. In the first of the series, we feature reactions to announcements in relation to ‘Agriculture and Cooperatives’ which will have a bearing on retail businesses linked to agriculture such as retailers of fresh produce.
Rajesh Srivastava, executive chairman, Rabo Equity Advisors and Chairman, Prowess Advisors
“Forming up of the Agriculture accelerator fund and computerisation of 63,000 primary agricultural credit societies (PACs) with an investment of Rs 2,516 crore are all extremely encouraging steps towards improving the state of agri-startups in rural areas. Setting up a massive decentralised storage capacity would also be highly beneficial to farmers.”
He further said, “The reduction of Alternate Minimum Tax rate for co-operative societies to 15% and the decrease in surcharge on co-operative societies to 7% from 12% are all commendable decisions. Alongside, setting up of a national cooperative database to map cooperative societies will help in better implementation of the proposed national policy on cooperatives.”
Rishi Agarwal, managing director of India and head of Asia, FSG
“A combination of measures such as the Agriculture Accelerator Fund, creation of warehousing capacity, an outlay of Rs2,200 crore for horticulture, creation of cooperative societies, and a cluster-based PPP (public-private partnerships) approach for long-staple cotton can help in modernising Indian farms. Providing forward linkages and capacity, in partnership with the private sector, will be key to improving the proportion of the consumer rupee that the farmer is able to realize. This needs to be expanded to all crops.”
Shan Kadavil, co-founder, FreshToHome
“Setting up the agricultural accelerator fund will pave the way to attract fresh ideas, tech-driven solutions, and increased use of technology in the agricultural sector. Tech-pivoted growth is the need of the hour. This will play a key role in increasing production, reducing production costs, reducing wastage, and helping farmers gain higher returns.
“Attempts are made to reduce the shrimp feed costs for marine products. This is a welcome move as lesser feed prices will largely benefit in reducing the shrimp production costs. We can leverage this reduced production costs to compete with other countries in international markets.”
“There is mention of Digital Public Infrastructure, which we hope strives to digitize the infrastructure facilities available to farmers. A marketplace designed to eliminate the dependency on farmers will ensure farmers have full access to their earnings.
“The Budget proposes to launch a new sub-scheme ‘PM MatsyaSampada Yojana’ with a targeted investment of Rs 6,000 crore to further enable activities of fishermen, fish vendors, and micro and small enterprises, improve value chain efficiencies, and expand the market. Infusion of funds into the ecosystem, farmer-friendly infrastructure policies, and reforms to enable ease of business will welcome new players into the ecosystem. The Budget pays attention to the immediate needs of the Fisheries sector.”
Mohit Rathod, co-founder, Truly Desi
“Agri Accelerator Fund will inspire a lot of young entrepreneurs in the agriculture sector to bring in new innovations by supporting them financially and making this space more organised. Additional provision of marketing linkages should be considered for millet-growing farmers and startups producing millet-based products as it will give a huge boost to the sales of millet-based products in the domestic and international markets.”
Abhishek Sinha, co-founder, GoodDot
“The budget hits all the right notes for Agritech, Foodtech, and the overall startup ecosystem in India. The focus on the development of vital infrastructure like railways and highways would help improve the logistics requirements of the agri and industrial sectors. The particular focus on Green growth as well as on millet is welcome. India is the largest producer of millets in the world and this particular focus on millets will help both domestic as well exports of millets and value-added millet products.”
Deepak Pareek, chief growth officer, Suumaya Agro Ltd.
“The budget clearly demonstrates a focus on technology, innovation, and startups. This will unlock the sector’s potential and remove obstacles. Credit is the most significant input in agriculture, and the allocation of Rs 20 lakh crore for agricultural credit, an increase of 11% over the previous year, is a well-thought-out approach to boosting the sector’s performance. The government’s plan to build vast decentralised storage capacity will assist farmers in storing their crops and obtaining fair pricing. This will be a game changer for farmers in terms of revenue.
“Over the next three years, one crore farmers will be assisted in making the switch to natural farming. 10,000 bioinput resource centres will be established. This will assist in reducing global fertiliser imports while also supporting the agricultural biotechnology industry and making agriculture more sustainable.”
Varun Khurana, founder and CEO of Otipy
“It is encouraging to see the government’s focus on agriculture, specifically setting up an agri accelerator fund for agri startups. This will accelerate the pace of innovation in a sector which is India’s biggest in the context of the employment it generates. The Government’s commitment to set up digital public infrastructure for agriculture will help the agritech startups to connect with more farmers and in turn enable them to realize better value for their produce.
“In addition to above measures, the plan to set up massive decentralized storage capacity will go a long way in helping the farmers by not only providing a respite from post-harvest loss but will act as a booster to increase the returns for them.”
Ankit Alok Bagaria, co-founder, Loopworm
“Decreasing import duties on feed ingredients are going to help the feed manufacturers and help formalise animal agriculture but would lead to reduced margins for domestic feed ingredient manufacturers.
“For young startups, the agri accelerator fund is a good initiative but there was less focus to promote Agri-Startups at the growth stage. Funds to support Bio-based products to promote natural farming should boost the plant Bio-stimulant & Bio-fertiliser industry.
“Significant agricultural credit support and significant fund infusion in allied agri sectors should promote existing farmers and people looking for secondary income streams to set up livestock/ poultry/ fish/ insect farms which would lead to a growth in non-arable land agriculture.”