Budget 2023-24: Agri Experts Hail Government's Move to Boost Farm Sector

The government aims to diversify the agricultural industry and provide new opportunities for farmers and rural communities by concentrating on the development of animal husbandry, dairy, and fisheries. The increased credit target will be helpful in promoting the expansion and growth of these businesses by helping to overcome some of the problems they now face, including a shortage of capital and insufficient investment.

To encourage States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers, the "PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth" will be introduced.

Sabyasachi Majumdar, Senior Vice President & Group Head - Corporate Ratings, ICRA Limited expressing his views said that “The Union Budget 2023 has a healthy focus on the farm sector, which is likely to benefit the fertilizers sector. The budget envisages launching of the PM PRANAM scheme to incentivize States and UTs to promote alternative fertilizers and balanced use of chemical fertilizers to achieve an optimal balance of NPK in the soil, which has been distorted because of excessive use of N ingredients.”

He said “It also focuses on creating a pan-India micro-fertiliser and pesticide manufacturing network. Moreover, the National Green Hydrogen Mission envisages a shift in usage to green hydrogen from natural gas which will reduce the dependence on fossil fuels over a longer term. The Government has budgeted Rs. 1.31 lakh crore for urea subsidy and Rs. 44,000 crore for nutrient based subsidy, taking the total budgetary allocation to Rs. 1.75 lakh crore. This allocation is lower than last fiscal’s revised estimates as well as ICRA’s estimates of around Rs. 2.0 lakh crore for FY2024 at current prices. ICRA however believes that there will be a calibrated subsidy allocation, depending on the evolving subsidy requirements during the course of the coming financial year."

Sandeep Sabharwal, Group Chief Executive Officer, Sohan Lal Commodity Management Pvt. Ltd. on Agri sector said that “Increase in agricultural credit target to Rupees 20 Lakh Crore is a welcome step for the farm sector. The proposal to decentralise storage will go a long way in controlling the post-harvest losses and also it will be an enabler as well as a catalyst for increasing farmers returns specially when it is coupled with 10,000 FPO program, Operation Greens and eNWR (electronic negotiable warehouse receipts). This step is aligned to the goal of doubling farmers’ income. While the exclusion of GST on the lease rentals that go as input to Agri warehousing services was much expected in this Budget as it becomes a cost to service providers which rather gets passed on to the consumer. We have been advocating for this since long, and we hope that the Finance Ministry will consider this proposal subsequently”.