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Budget 2024 Expectations: Agricultural Leaders Call for Increased Investment and Reforms

Leaders in the agricultural sector are calling for significant investments and comprehensive reforms to bolster rural infrastructure and promote sustainable growth.

Shivam Dwivedi
Agriculture Field (Representational Image Source: Pexles)
Agriculture Field (Representational Image Source: Pexles)

Budget 2024 Expectations: As the nation looks forward to the upcoming budget, key figures in the agricultural sector are urging the government to prioritize substantial investments and sweeping reforms to enhance rural infrastructure and promote sustainable growth. With a focus on strengthening road networks, irrigation systems, storage facilities, and embracing advanced technologies, these leaders emphasize the importance of a collaborative approach between the government and private sector to drive productivity, reduce post-harvest losses, and ensure climate resilience in India's agriculture.

Rajesh Aggarwal, Managing Director of Insecticides (India) Ltd, emphasized the critical need for enhanced rural infrastructure. "In anticipation of the upcoming budget, the agricultural sector eagerly awaits increased investment in rural infrastructure and comprehensive reforms. Strengthening road networks, irrigation facilities, and storage infrastructure is pivotal to minimizing post-harvest losses and enhancing market access for farmers. This initiative not only intensifies productivity but also generates employment, catalyzing rural economies," Aggarwal stated.

He highlighted the importance of collaborative efforts between the government and the private sector to integrate advanced technologies and efficient farming practices. "Enhanced supply chain management, supported by public-private partnerships, ensures streamlined operations and accessibility to quality agricultural inputs, including crop protection products like insecticides and biologicals," he added. Aggarwal also stressed the need for robust strategies for pest management and sustainable water management, advocating for funding climate-smart agriculture innovations like solar-powered irrigation and rainwater harvesting.

“Moreover, boosting the agricultural supply chain through expanded storage capacities and improved transportation networks is essential to reducing wastage and enhancing farmers' incomes. By focusing on these priorities, policymakers can nurture a resilient agricultural ecosystem, driving sustainable growth and prosperity across rural India," he added.

Echoing these sentiments, Maninder Singh Nayyar, CEO and Founder of CEF Group, underscored the importance of sustainability and urban farming as drivers of economic progress. "As we approach Budget 2024, it's essential to prioritize sustainable growth with significant investments in infrastructure and structural reforms. At CEF Group, we see sustainability and urban farming as key drivers of economic progress," Nayyar commented.

Nayyar called for the budget to emphasize waste reduction and organic farming to build a resilient agricultural ecosystem. "Supporting renewable energy and green technologies will tackle environmental challenges and ensure rural prosperity. By fostering collaboration, Budget 2024 can lead to a sustainable future for Indian agriculture and uphold our duty to protect the environment for future generations," he concluded.

Raju Kapoor, Director, Industry & Public Affairs, FMC India

"The agricultural sector which is the backbone of the Indian economy has been through a challenging year. With monsoon playing truant, agricultural growth has diminished from 4.7% last year to 1.4%, which further added to the rural distress. This budget presents a crucial opportunity to address these concerns and propel the sector towards a brighter future. The government must prioritize agriculture and rural India, focusing on making farmers more resilient while simultaneously mitigating food inflation that disproportionately affects society's underprivileged segments.”

“Firstly, the budget must acknowledge the stark reality of food inflation, aggravated by stock restrictions on essential commodities such as pulses, wheat, and rice. This disproportionately affects the most vulnerable sections of society, demanding immediate attention. Similarly, the import dependence on pulses and oilseeds, the government's commitment to providing free rations under the Annapurna Yojana, and climate change further necessitate a robust domestic production system supported by developing an innovation ecosystem.”

“The government should prioritize R&D investments aligned with national priorities, focusing on developing climate-resilient crop varieties, microbial products, and sustainable farming practices. To facilitate the widespread adoption of technology, the budget should also incentivize the private sector participation in building a robust agricultural innovation ecosystem. Tax incentives for R&D investments by the private sector can encourage the development and integration of cutting-edge technologies. Furthermore, GST on agricultural inputs, such as agrochemicals, should be brought under the GST Council's purview and potentially lowered to 12% maximum to ease the financial burden on farmers,” he added.

“The Kisan Samridhi Yojana should be strengthened to empower farmers with greater financial support and its utilization at farmers’ hands should be linked to the use of advanced agricultural inputs. Kisan Samruddhi coupons that could be used to purchase agricultural inputs would enhance productivity. This will ensure timely access to essential resources and subsequent financial support to the farmers. We expect that the budget should have adequate resources for capacity-building initiatives, and should incentivize the investments by private companies to train farmer groups, particularly women, creating awareness and adoption of modern growing practices.  Easy access to adequate and affordable credit will further empower farmers to be able to adopt these technologies and enhance their livelihoods.”

“Extending the PLI scheme for production and export of latest innovation crop protection chemicals in India will provide long term dividend to India. Similarly, aligned to the theme of making India the Global Drone Hub, expanding the PLI scheme for building the agri-drone component manufacturing ecosystem will go a long way. In a nutshell, we envisage that this budget is focused on agriculture, which will further lay the foundation for a strong, sustainable, and prosperous future for Indian farmers and the nation."

Soumyak Biswas, Partner, Food and Agribusiness, Management Consulting, BDO India

"As part of the tactical measures, the budget may look at improving productivity measures, bring down the overall cost of production so that they can remain competitive in the global markets and make decent returns.

Some of the short-term interventions which the Government may consider are listed below:

  1. Subsidies for sustainable farming - The Budget may subsidize usage of foliar application fertilisers and bio-fertilisers to promote sustainable farming. Given the adverse impact of urea on soil health, reallocating the fertiliser subsidy to promote alternative inputs can address this issue effectively.
  2. Boosting Agri Exports - Despite being among the global leaders in production of various agriculture and horticulture products, India ranks relatively lower when it comes to agri-exports. The Budget should allocate funds to expedite creation of agro-processing clusters and link them to global markets and ensure the ecosystem is in place ranging from production, farm gate logistics, processing, quality checks and outbound logistics and certifications.
  3. Revamping Commodity Boards - Commodity Boards will need to reinvent their roles significantly. Allocation towards such Boards may increase with focus on identifying new initiatives which can be taken up on PPP models.
  4. Rationalising Tax Rates - Tax rates may be rationalised specially on agri-chemicals (the rate may be lowered from 18%), for agro-equipments (GST rates for tractors may lowered from existing 12%) and seeds.
  5. Driving Convergence in Social Sector Schemes - The Government may lay emphasis on driving convergence across several social sector schemes which essentially can address the issues plaguing the farming community.

In terms of strategic interventions, it is important the budget focus on laying the foundational pillars for creating a resilient and sustainable agriculture sector which is touted to emerge as the food bowl of the world. In this regard, some suggestions which may be worth mentioning:

  1. Increased Allocation for R&D - Greater allocation towards R&D should be a welcome move which can be utilised for improving productivity of current crops, develop new variants, focus on crop/ animal health, drive innovations across product and supply chain
  2. Technology Adoption and Infrastructure Development - Increased allocation to drive technology adoption, creation of back-end infrastructure and expediting rolling out the agriculture stack can be a game changer in the agriculture industry.
  3. Off-Farm Rural Income and Livelihood Improvement - Continuing with the mission of driving ‘off-farm’’ rural incomes and livelihood improvement and conceptualising new ones such as National Goats and Sheep Mission can help millions of small and marginal farmers and give a boost to rural income and drive consumption."

Pradeep Palelli, Co-founder & CEO, Thanos Technologies

"As we anticipate the upcoming budget, we at Thanos Technologies see immense potential for synergy between the agriculture and technology sectors, particularly through drone applications. We expect the government to recognize this intersection and provide support that benefits both industries. From the agricultural perspective, we hope to see subsidies and training programs that make drone technology accessible and adaptable for farmers of all scales. This would empower farmers to harness cutting-edge technology to enhance productivity and sustainability.

On the technology front, we anticipate investments in R&D centers dedicated to developing drones specifically tailored for agricultural use in our diverse climatic conditions. Additionally, we expect a reduction in import duties on specialized components, potentially by 10-15%, to reduce costs and foster innovation.

A balanced approach would also include tax incentives for tech companies developing agricultural solutions, ensuring that the benefits reach the end-users, our farmers. A possible 5-year tax holiday for such investments could spur rapid adoption and innovation. By striking this balance, we can drive technological advancement while ensuring that our agricultural sector reaps the benefits, leading to increased productivity and sustainability."

Vimal Kumar, Managing Director, Best Agrolife Ltd

“As India prepares for the Union Budget 2024, it is imperative for the government to take decisive steps to support the agrochemical sector, given its vital role in ensuring food security and sustainable agriculture. Our heavy reliance on imports from China highlights the need for implementing Production-Linked Incentive (PLI) benefits to boost local production. Additionally, increasing import duties on domestically produced raw materials can further encourage this growth. Lowering GST rates from the current 18% to 5% will reduce costs for farmers, thereby improving their income and the overall farm economy. Providing incentives will encourage micro-entrepreneurs to promote modernization through initiatives such as 'Drone as a Service' and the use of advanced machinery. Furthermore, introducing robust measures to combat counterfeit and spurious materials will ensure the integrity and safety of agrochemicals in India.”

Deepak Bhardwaj, Co-Founder and Director, of IoTechWorld Avigation

“Under the Modi 3.0 government, the agritech industry is set for a transformative leap, with significant investments poised to revolutionize Indian agriculture. To support the deepening of drone penetration at the grassroots level, government subsidies will play a crucial role. Additionally, increased curbs on foreign-made drones and their parts will benefit Indian drone manufacturers under the Make in India initiative. Innovations in precision farming, data analytics, and smart irrigation systems will enhance productivity and sustainability. Leveraging AI and IoT, farmers can make data-driven decisions, optimize resource use, and reduce environmental impact. The ease of documentation and faster file processing and approvals under the Agriculture Infrastructure Fund (AIF) scheme are expected to further drive this transformation. These advancements will improve yield quality and quantity while empowering farmers with better market access and financial stability. The Modi government may introduce a Rs 750-crore Agri-SURE fund for agri-startups and accelerate the AIF and the Integrated Scheme for Agricultural Marketing. A robust agritech ecosystem will boost food security, rural development, and overall agricultural growth, positioning India as a global leader in sustainable farming practices.”

Kunal Gupta, Head-Dhuri Plant, KRBL

"The upcoming 2024 Budget presents an opportunity for significant support in the agriculture sector. Increased funding for research can deliver improved crop yields and foster innovation in cutting-edge technologies. This, along with flexible export policies and Minimum Support Prices (MSP), can open new markets for Indian farmers and boost exports. However, a balanced approach is needed. While promoting exports and controlling inflation are vital, overdependence on fertilizer subsidies requires a shift towards sustainable practices. Additionally, farmer education, infrastructure upgrades, support for small farmers, and climate change adaptation are crucial for building a truly resilient and prosperous agricultural sector in India."

Bodhisattwa Sanghapriya Founder & CEO IG Drones

“The Indian drone sector has witnessed rapid growth in recent years, and the upcoming Union Budget has raised expectations for policy measures and fiscal incentives to further boost this industry. In 2021, the government announced a subsidy of Rs 120 crore under the Production-Linked Incentive (PLI) scheme for drone manufacturers and their components. We anticipate an extension of this scheme to help the Indian drone sector compete globally. As India aims to become a global drone hub by 2030, the industry looks forward to initiatives that promote the adoption and development of drone technology. Additionally, a focus on training youth in drone technology is essential for generating employment and creating a highly skilled workforce. The use of drones for defense and security purposes is also expected to receive a significant boost from the government. We are hopeful that Budget 2024 will elevate India’s drone industry to new heights of innovation and growth. Furthermore, reports of Google planning to set up a drone manufacturing factory in a southern state have naturally raised domestic industry expectations.”

Sanjiv Kanwar, Managing Director- Yara South Asia, a Subsidiary of Yara International

“As we anticipate the Union Budget, our focus is on policies that will invigorate the agricultural sector, foster ease of doing business, and promote a more sustainable and resilient agricultural ecosystem. We expect initiatives that will enhance credit and insurance frameworks for farmers and introduce an agriculture accelerator fund to spur growth. Addressing India's growing population necessitates a strong emphasis on sustainable soil management practices, including regenerative agriculture, along with water-efficient technologies and streamlined crop nutrition regulations. Additionally, tax parity for fertilizers and micronutrients, coupled with direct benefit transfers, will empower farmers to improve both the quantity and quality of their produce while minimizing environmental impact. This, in turn, will strengthen India's position in the global market. We are committed to working with the government and industry stakeholders to streamline regulations and promote a robust agricultural economy that empowers farmers, ensures ease of doing business, and prioritizes long-term sustainability.”

To be continued...

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