homeviews NewsBudget 2021: Can agriculture and allied activities lead Atmanirbhar Bharat agenda?

Budget 2021: Can agriculture and allied activities lead Atmanirbhar Bharat agenda?

Budget 2021: Can agriculture and allied activities lead Atmanirbhar Bharat agenda?
Profile image

By CNBCTV18.com Contributor Feb 15, 2021 5:13:08 PM IST (Updated)

The continued thrust on the agriculture sector and its allied initiatives would contribute to the doubling of incomes of the farmers in the long run and making them Atmanirbhar.

The Budget has built upon the stimulus rolled out last year including a series of announcements linked to the farming and allied sector. Some of the notable announcements are linked to micro-irrigation, supporting Agricultural Produce Market Committees (APMCs),  fisheries and seaweed, an extension of Swamitva scheme and increase in agriculture credit. Let us delve into the fine print of these announcements made in Budget 2021 and its implications:

Recommended Articles

View All

Micro-irrigation corpus doubled to Rs 10,000 crore:
Expanding the reach of micro-irrigation particularly in water-stressed areas is critical for overall agricultural productivity. This could pave the way for multiple convergence opportunities, for instance converging with Operation Green for fruits and vegetables.
Agriculture infrastructure fund will be available for APMCs for augmenting their infrastructure. Moreover, 1,000 more mandis to be integrated into the e-NAM marketplace: The measure is significant as it will reinforce the support to APMC mandi infrastructure and services, that is being offered by APMC to farmers and to agri-business. Continuing to expand the e-NAM marketplace will strengthen the mandi system to be more competitive.
Substantial investments proposed in the development of “modern fishing harbours and fish landing centres” in Kochi, Chennai, Visakhapatnam, Paradip & Petuaghat. The plan is to also develop inland fishing harbours and fish-landing centres along the banks of rivers and waterways: This is a welcome step as the current capacity of harbours caters to only about 50 percent of mechanised craft. However, while developing fishing harbours, adequate attention should be paid to international hygiene standards to appropriately address the requirements of importing nations, and in turn, provide the impetus to exports. Furthermore, this should be accompanied by the development of deep-sea fishing to optimally harness EEZ and high sea marine resources. Also, for harbour development, the government may also consider the feasibility of the PPP route for bringing in enhanced private investment and efficiencies into the sector.
Growing of algae, sea-weed and cage culture will be promoted: In India, seaweed is utilised primarily for commercial production of agar and alginate. However, currently out of the 21 agar factories, only 10 are functioning at their rated capacity owing to shortage of raw materials. Further, only about 30 percent of domestic demand of agar is met by indigenous production. Hence, going forward, seaweed parks should be developed to ramp up the production and utilise the existing production/processing capacities as well.
Fruits and vegetable sector is one of the fastest-growing segments. It is also the segment which has the potential for higher value realisation for farmers. Expansion of ‘Operation Green’ to cover 22 more perishable commodities will help in critical infrastructure creation and protect fruit and vegetable farmers from distress sale and will boost value addition. The expansion of the scheme will also help food processing exporters, state marketing/co-operative federation, retailers etc. engaged in processing and marketing to diversify and enable better market linkages.
Swamitva scheme to extend to all States and UTs: This initiative will help in enhancing transparency in rural property ownership and ensuring adequate credit supply for farmers. The integration of modern technology for topography like the use of drones, GIS mapping, satellite imagery etc. and allocation of household IDs and clear title records will enable the small and marginal farmer to use their homes as financial assets to take loans and avail other financial benefits from banks. Clear title records will also benefit non-farm related activities with the removal of land supply constraints. A comprehensive digital mapping of rural land categories — agricultural, residential and commons — will help raise rural productivity and incomes in various ways. Formal lease markets and digitisation of personal records can lead to improved implementation of schemes such as PM-KISAN, Fasal Bima Yojana and Rythu Bandhu. These can be directed towards the cultivators, instead of absentee landlords.
Agriculture credit target will be increased to Rs 16.5 lakh crore with a focus on ensuring increased credit flow to animal husbandry, dairying and fisheries: The step will ease farmers’ financial distress and boost agricultural production. The measure would also provide relief to cultivators who have witnessed depressed crop prices due to bumper production following favourable rains. With credit being a critical input in achieving higher farm output, this will also help delink farmers from non-institutional sources where they are compelled to borrow at significantly high-interest rates. While interest subvention has helped in making formal credit for farm more attractive, the government would need to build confidence among farmers so that they avail the credit facilities.
The continued thrust on the agriculture sector and its allied initiatives would contribute to the doubling of incomes of the farmers in the long run and making them Atmanirbhar. Furthermore, if agriculture and allied sectors can continue to adopt emerging technologies on the back of improved credit availability and a better APMC apparatus, then the overall sector will thrive multi-fold and deepen its economic linkages like never before. However, we need to sharpen our focus on the execution now.
The author, Amit Vatsyayan is Partner, Government and Public Sector, EY India. Meghna N Shrimali, Sr. Manager, EY India also gave inputs. Views are personal
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!

Top Budget Opinions

    Most Read

    Market Movers

    View All
    Top GainersTop Losers