The forthcoming budget must look to leverage the resilience to enable the growth of agriculture by more than 4 per cent in the coming few years while being more environmentally responsible. There are certain crucial aspects to be considered for this transformation. Setting up a National Agriculture Council on the lines of the GST council, comprising of centre and state representatives along with the representatives of the private food and agriculture sector to drive long-term strategy can prove to be the stepping stone. Incentivising access to formal banking and financial services basis good loan repayment practices will help in uplifting the current state using enhancing the credit availability to agriculture to beyond Rs 18 lakh crore at affordable interest rates for farmers and farm-level processing infrastructure, instead of being consumed by corporates. Alongside, incentivising the private sector players in agriculture who handhold the formation and growth of FPOs/FPCs by offering tax breaks on such substantiated investments can be beneficial in the longer run. Further, upgrading the quality control infrastructure across the country to ensure the availability of quality inputs to farmers and agriculture produce to processors and consumers will strengthen the backbone of Indian agriculture.
As the farmers look to navigate through the pandemic, bringing down the GST levied on agricultural inputs to a maximum of 8 per cent and exemption of income tax on the investments being made by agricultural sector companies can be substantial considering agricultural extension is critical to technology adoption. Following that up, incomes three times the investment in R&D each year must be exempted from the income tax levy.
The upcoming budget can additionally provide special incentives for R&D, manufacturing, training and certification of precision agriculture mechanisation including drones to encourage sustainable agriculture and develop India as a smallholder farmers’ precision agriculture hub. Linking the PM Kisan Nidhi for the purchase of advanced inputs by the farmers decontrolling fertilisers from subsidy and starting a DBT system for bonafide farmers to enhance efficiency can be probable solutions. Having the technical grade pesticides import classification changed from the existing chapter 3808 HSN code to HSN 2909 aligned to the global norms can also iron out the supply chain for Indian agriculture.
