Upcoming Union Budget 2021 will be very crucial for the agriculture sector

The three farm bills in FY2020, the focus of the government has to be on the development of Agriculture Infrastructure which is critical for the successful take-off of these marketing reforms.

Prasanna Rao, Co-Founder & CEO, Arya said, “We hope for the inclusion of On lending by Banks to Agri Fintech Startup NBFCs under PSL for all categories of loans otherwise classified as agriculture in PSL, and the subsidies benefits under Agri Infrastructure Fund and other government schemes to be extended to setting up of flexible and in-demand storage solutions including Hermetic Storage solutions and Agri-NBFCs to be allowed borrowing through the ECB route.

Further, on this Chattanathan Devarajan, Managing Director of Aryadhan Financial Solutions Private Ltd. said, “I think the biggest challenge for the government in the current budget will be raising resources. Imposing an additional tax burden does not augur well for markets; hence this will be a dilemma. While the government will be thinking in terms of how to increase demand for consumption, in the backdrop of the COVID-19 pandemic, it may not be sufficient enough a resource to meet the budgetary gaps.”

One of the ways that they can do this is to advance 25 per cent of the tax collections for the next two years with a rebate on tax for the next two years. A formula can be built out which is attractive both at the Individual and at Corporate tax levels. This may even be tried for GST too. It is optional, it may not face much resistance as an idea, he said.

People may even opt for it given the fact that bank deposits have gone up and rates of deposits are low. This reform will help the government to meet the resources required and in turn, benefit the taxpayer.  Moreover, since only 25 per cent is being targeted with the improvement in the economy, this gap will get abridged in the ensuing years and the strain on the following years may not be very significant, Devarajan added.