The Union Budget was presented by Nirmala Sitharaman on 1ST February 2021. The budget solidified it’s pledge to support rural sector farmers. It was important for the government to signal its allegiance to farmers, who were protesting against the three farm laws. The Budget was an opportunity to divert funds in the right direction to enhance GDP and maximize new farming techniques.
Focus of Budget 2021
The key measures announced by the government included:
- SWAMITVA scheme to extend to all States/UTs
SWAMITVA Scheme was launched by Hon’ble Prime Minister Shri Narendra Modi earlier this year, to bring transparency in property ownership in villages. Under the Scheme, the property owners in villages and rural areas are being given ownership rights to their properties in villages. Till date, about 1.80 lakh property-owners in 1,241 villages have been provided SWAMITVA cards.
- Agricultural Credit Target set to Rs 16.5 Lakh Crore for FY22
The Government’s focus will be to ensure increased credit flows to farmers engaged in animal husbandry, dairy, and fisheries.
- 33% increase in Rural Infrastructure Development Fund
A hike in rural infrastructure fund allocation from INR 30,000 Cr to INR 40,000 Cr
- Micro Irrigation fund doubled
The Micro Irrigation Fund started with a corpus of Rs 5,000 crore under NABARD, and has been doubled this year with an augmentation of 5000 Cr.
- Operation Green Scheme – ‘tops’ to include 22 more perishable products
To increase value addition in agriculture and allied products and boost their exports, it has been proposed in Budget 2021 to increase the scope of ‘Operation Green Scheme’. The scheme is presently applicable to tomatoes, onions, and potatoes (TOPS), and this has been expanded to include 22 more perishable products.
- 1,000 more Mandis to be integrated with e-NAM
Currently around 1.68 crore farmers are registered and Rs 1.14 lakh crore of trade value has been carried out through e-NAMs. e- NAM has brought transparency and competitiveness into the agricultural market and hence the government has proposed to integrate 1,000 more mandis with e-NAM.
- APMCS to get access to Agriculture Infrastructure Fund
The government also wanted to improve agricultural infrastructure, so that farmers could “produce more.” The government imposed an Agriculture and Development Cess on petrol, gold, etc to improve the condition of agricultural infrastructure. Agriculture Infrastructure Fund will be made available to APMCs for augmenting their infrastructure facilities.
- More investment in 5 major fishing Harbours proposed
Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat will be developed as hubs of economic activity on the similar lines as Singapore, Dubai and other European ports.
- Multipurpose Seaweed Park to be established in Tamil Nadu
To promote sea weed cultivation in Tamil Nadu, setting up multipurpose sea weed parks have been proposed.
Decoding the announcements in Budget 2021
The Budget wants farmers to produce more, earn more as well as save more. Availability of funds, setting up new infrastructure, improving credit flow and connecting farmers to the market places seems to be the broader theme of the Budge 2021. There would be an integration of more than 1000 more mandis to the e-NAM platform. The extension of agricultural funds to Agricultural Produce Market Committee (APMC) is a step in the positive direction. The budget also seeks to promote fish farming, increasing the number of modern fishing harbors and fishing landing centers.
There was no mention of Research and Development investment or skill investment in the sector. Agriculture under Industry 4.0 is rapidly changing and it is imperative to train farmers on the new technology. Research on upcoming technology is also needed so the country does not lag. It is only through the development of skill and skilled research that can we move forward and adapt fruitful practices.
What the Budget 2021 means for Agitech in India
The main focus of the government remained on the rural sector, with little focus on Agritech start-ups. There was no specific scheme or initiative for the Agritech startups in general, though there was a one-year extension on tax holidays for start-ups. Agriculture as a whole did receive ample attention and the approach can be termed as conventional and building on the earlier proposed schemes.
Agritech startups across the country were expecting a GST subsidy on smart farm tools and services. With the growing popularity, acceptance, and benefits of these tools, the government was expected to give a push to these tools. This would also create an entrepreneur mindset for farmers, who would learn to be self-sufficient.
Start-ups would have to leverage provisions announced under other existing schemes. There has been a focus on start-ups through Start-Up India, Stand Up India schemes. The development of roads, ports, etc helps maximize supply chain efficiency, warehousing, cold storage, and post-harvest parts of the chain would become more secure. For example, as agri-credit has been increased, there is an opportunity for start-ups to operate in the fintech space and come up with improved products for farmers to utilize these resources.
Conclusion on Budget 2021 for Agritech Startups
Though the budget does not explicitly allocate any funds to AgriTech start-ups, it has supporting schemes which the AgriTech community can leverage. The Budget helps the rural farmer become capable with resources, funds and market place for trading, which is also the objective of AgriTech start-ups. Both the government and the AgriTech startups should work together for the betterment of farmers in India and this budget should be seen as supportive in the long run.
Also read on our portal, “CSC Kisan e- Mart allows farmers to sell online”
