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POLICY & REGULATIONS

Experts term Union Budget 2018 as agriculture and rural economy booster
Friday, 02 February, 2018, 08 : 00 AM [IST]
Nandita Vijay, Bengaluru
Experts in the agriculture and food processing sectors view the Union Budget 2018 as an agriculture and agri industry booster.

Finance minister Arun Jaitley stated that the food processing sector was growing at an average rate of 8% per annum and Prime Minister Krishi Sampada Yojana was our flagship programme for boosting investment in food processing. Allocation of Ministry of Food Processing Industries (MoFPI) is being doubled from Rs 715 crore in RE 2017-18 to Rs 1,400 crore in 2018-19. Government will promote establishment of specialised agro-processing financial institutions in this sector.

Tomato, onion and potato are basic vegetables consumed throughout the year. However, seasonal and regional production of these perishable commodities pose a challenge in connecting farmers and consumers in a manner that satisfies both. The government proposes to launch an ‘‘Operation Greens’’ on the lines of “Operation Flood.” Now “Operation Greens” shall promote Farmer Producers Organisations (FPOs), agri-logistics, processing facilities and professional management. I propose to allocate a sum of Rs 500 crore for this purpose,” said Jaitley. 

Bangalore Chamber of Industry and Commerce (BCIC) termed the Budget as an ”Agriculture, Infrastructure and Rural Economy Boosting Budget” that would boost macroeconomics of the country despite stagnation in the global economy and overseas political uncertainties, with specific emphasis on the development of core sectors especially the infrastructure, agriculture, rural sectors for the next one year.

Jaitley sought to address agriculture distress, create jobs and boost economic growth while at the same time stick to fiscal prudence.

The hallmark of finance minister’s presentation was a promise of containing fiscal deficit for FY18-19 to 3.3 per cent of the GDP without compromising on the spending on development schemes despite burgeoning oil bill which is putting severe burden on the FD.

K R Sekar, chairman, Direct Taxes Expert Committee, BCIC, and leader, global business tax, Deloitte, said: ”Budget has a slew of policy-oriented announcements and targets set to build rural economy, create jobs, boost infrastructure, promote SME sector and improve agriculture sector which we believe will spur overall economic growth as it clearly sets the right tone for the current fiscal.”

“The Budget has a clear agriculture push as we had expected. A number of initiatives for agriculture and food processing have been announced in the Budget. Policies like MSP being at 1.5 times the cost of produce need to be understood further as we need to see if it pushed up inflation on agri commodities,” he added.

According to Ravi Jakhar, founder, Truefarm Foods, this government is very serious about organic farming and budgetary announcements confirm its commitment to betterment of farmers. We welcome the initiative of setting up 22,000 new Gramin Agri markets. By bringing buyers closer, it will help farmers realise better prices for their produce. Establishment of these markets will also lead to widening of economic activity and encourage rural entrepreneurs.

“ Budgetary support for cluster farming with self-help groups to encourage organic farming will help improve productivity and supply, making organic food more affordable. These groups can also facilitate knowledge transfer, which will push organic production and propel India's exports,” he added.

Meanwhile, according to Arvind Mediratta, MD & CEO, Metro Wholesale India, overall, the Budget is a socially inclusive one that has laid major emphasis on agriculture, social infrastructure, healthcare, social protection and digital transformation.

“The government has taken some measures in this Budget towards strengthening the MSME sector. The corporate tax rate reduced to 25% for companies with turnover up to Rs 250 crore in the financial year 2016-17, will also majorly boost the micro and small and medium business eco-system. This will augment the ease of starting own businesses while helping existing business,” he added.

In the backdrop of agrarian stress, the Budget announced by the government has shown its resolve in continuing to provide resources to rural India. “With Rs 2,000 crore corpus for agri-market development, support to organic farming, allocation of Rs 10,000 crore to fisheries and animal husbandry related infrastructure were the measures,” he said.
 
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