Budget 2022: Finance Minister Nirmala Sitharaman today (1 Feb) presented the annual Budget that was focused on ensuring assured income to the farming community with an announcement of Rs. 2.37 lakh crore as direct payments for minimum support price (MSP) to wheat and paddy growers for the fiscal year 2022-23. She said that "Farm procurement value for FY23 to be ₹2.37 trillion”.
It is worth mentioning that the announcement has come after year-long farmers’ protest demanding guaranteed MSP for farm produce ended with the Centre repealing three controversial farm laws.
Experts' Views on Budget 2022
Let’s know what the agriculture experts and industrialists feel about the budget 2022. Were they happy or disappointed with it?
D Narain, President, Bayer South Asia and Global Head of Smallholder Farming said, “Despite the pandemic’s impact on the Indian economy, the agriculture sector has been resilient and continues to be a key driver of economic growth. The announcement in this year’s budget on strengthening the delivery of digital and hi-tech services to farmers through the public-private partnership model will go a long way in improving the scaling up of Agri value chains and help Indian farmers reap the benefits of technological advancements. Major initiatives like promoting the use of ‘Kissan drones’, funds to finance start-ups for agriculture and rural enterprises, supporting FPOs through these enterprises, and boosting domestic oilseed production, have the potential to transform the sector. At Bayer, we will continue to work with the government and the farmers to boost incomes, deliver on sustainability goals and accelerate rural entrepreneurship and development.”
Simon Wiebusch, Country Divisional Head, Crop Science Division of Bayer for India, Bangladesh & Sri Lanka (IBSL) commented, “Agriculture forms the backbone of India’s economy, facilitating rural employment, development and food security. As part of the agricultural input industry which is an important contributor to this journey of growth, making Indian farmers more sustainable and prosperous, we welcome the continued impetus on agriculture in the Union Budget 2022. We hope that the measures to streamline the Agri value chain and enhance farm productivity through the PPP model will increase smallholder farmer incomes. Boosting domestic oilseed production, ensuring direct monetary benefits to farmers for their agricultural produce, encouraging the use of drones for agriculture and strengthening FPOs through innovation and technology, are steps in the right direction. As a life sciences company with 125 years presence in India, we aim to spearhead efforts towards improving rural prosperity through modern technology and global best practices to support smallholder farmers.”
R. G. Agarwal, Group Chairman, Dhanuka Agritech Ltd. commented that "The Government's focus on augmenting infrastructure via the ‘Gati Shakti’ plan, focus on the promotion of usage of drones for various farm activities including crop assessment, digitisation of land records, spraying of insecticides and nutrients is indeed a welcome step and would immensely help the agriculture sector. It would have been also apt had the Finance Minister also reduced GST and customs duty rates on some of the agro-chemicals products, which would have reduced the overall cost for the farmers."
Vimal Alawadhi, MD, Best Agrolife Ltd. welcomed the growth-oriented Budget where the Government focused on the overall development of the economy. The Government’s intent to improve the agriculture sector was visible in the Budget announcements. Though we expected various measures for the Indian Agrochemical industry, there was no announcement regarding the industry's growth. Similarly, the farm sector was also eagerly waiting for the reforms to reduce the cost of farm inputs and modern technologies required for increasing the farmer’s income and pushing up the agriculture sector’s growth beyond 3.9%.
He added that in line with the Government’s focus on modern-day agriculture, we will continue educating the farmers about the judicious use of safe agrochemicals.
Rajesh Aggarwal, Insecticide India ltd. says, this year's budget has a special emphasis on encouraging the use of Kisan Drones for crop assessment, digitization of land data, and insecticide & nutrient spraying. This will undoubtedly provide a boost to the agriculture industry and the input industry as well. Spray by drones will help to save on water and will increase the uniformity and efficacy of crop protection and nutrition products. Tax incentives for agribusiness startups will benefit the overall agriculture sector. The government has also announced that money will be made available through NABARD to finance agricultural and rural enterprise startups relevant to the farm product value chain. All of these actions will tremendously benefit farmers. The government has also reduced the cost of mobile phones, which will encourage more small and marginal farmers to adopt the technology.
Taranjeet Singh Bhamra, CEO & Founder, AgNext Technologies* said, I would like to commend the government for putting forward an enterprising vision of India at 100. The agriculture sector has proven its resilience from external shocks like the COVID pandemic, with growth at 3.9% in FY2021-22, an increase from 3.6% last year. The budget’s focus to increase technological intervention in agriculture value chains will further help to cushion the sector against global uncertainties.
The government’s dedicated focus to increasing investment in the agriculture and the agritech sector will allow for all-inclusive development that will benefit farmers as well as agribusinesses. The proposed PPP (Public Private Partnership) mode scheme to promote the delivery of digital and hi-tech services in the agriculture sector will lead to greater cooperation between the private agritech players and public research institutions.
Fiscal support from the government will provide the necessary impetus for the growth of the rural economy and the export potential of India’s agri-commodities. For agritech sectors, this is a favorable budget that will pave the way for robust growth of the agritech players, especially the start-ups, to scale domestically and internationally. The emerging agritech startups will enjoy the dual benefits afforded to the sunrise agritech sector and start-up ecosystem in the budget of 2022.
Amit Sinha, Co-Founder, Unnati said, “Budget has a strong focus on agriculture with a specific focus on the delivery of high tech services, funding of startups through NABARD, focus on “Drone Shakti” for farmers, climate action. There is a good balance of the short term and long term measures. It’s very forward-looking with a long-reaching impact on how Agriculture will grow in India. These initiatives will solve the core problem of improvement of farm productivity and help improve farm incomes significantly”.
Prasanna Rao, MD & Co-founder, Arya.ag said, The Union Budget has set the ball rolling for the agritech sector in the country. The special focus around the post-harvest considerations related to millet farming is a welcome step and will help enhance the country’s farm produce quotient. The Budget has also placed agritech in the right limelight with the Finance Minister reposing faith on the role of these new age players to transform the agriculture sector in the country under the PPP mode. Furthermore, Finance Minister’s assurance on government support to FPOs (Farmer Producer Organizations) and small farmers to procure farming equipment as well as gain access to technology-led capabilities and services is also in the right direction. Overall the intent to inculcate a strong element of digitization in form of Kisan drones for crop assessment, in the agri value chain, will leapfrog India’s place in the global agriculture landscape. Pertaining to start-ups, the move to extend the tax incentive scheme till March, 2023 is encouraging and will benefit a large set of players.
Sandeep Sabharwal, CEO, SLCM Group said Budget 2022-23 has provided impetus towards inclusive growth in Agriculture. Announcements on digitalization, NABARD fund with blended capital to fund startups is also a welcome move. Emphasis on skill development in agriculture with reference to university syllabus revision is a step in the right direction to empower the industry. Logistics under agri sector has been provided the much needed boost through creation of new logistics parks and efficient railway network.
On the other hand, a lot of policy making has been done but focus on execution hasn’t been pushed as needed. industry demands like Rationalize GST , getting cheaper Insurance for Agri has not been given required attention. It would have been a welcome decision if institutions providing Agri credit like NBFC’s , Agri procurement companies were given some schemes to cover Agri related bad debts just as Bad bank has been put in service for commercial banks. Fast Track courts for conflict resolution in the agri sector continue to be a distant reality.
Amit Saraogi, Managing Director, Anmol Feeds, Chairman for Livestock Taskforce, CII for Eastern Regional Council, Director Member of MCC Chambers of Commerce & Industry and Chairman of Council on Animal Husbandry, Fisheries & Rural the year 2021-2022 said, the livestock and animal husbandry sector contributes 4.11% to GDP and 25.6% to total agriculture GDP, yet there was inadequate attention presented to the sector in the Union Budget of 2022. Duty reduction on certain inputs required for shrimp aquaculture to promote its exports is a welcome move as it will further boost entrepreneurial mindset and help in job creation. Lowering production cost of shrimp hatchery and feed will promote growth in the sector. The fisheries and aquaculture sector has tremendous potential to generate livelihood and income. However, marine and dairy products were left untouched by the budget. Like announcements made for wheat and paddy farmers, MSP was needed to be fixed for the poultry sector as well. This would have benefited the poultry farmers to a large extent. The industry also expected a viable solution towards controlling the ever spiraling of the raw material prices as it has been plaguing the already overburdened industry. The budget for Blue Revolution has not been outlaid.
He added that the blended capital fund to startups for agriculture & rural enterprise will be valuable for the sector. Making optimum utilization of technology and IT in the farming sector is required for modernization of the industry and keeping up with the post digital world. While development of infrastructure, roads and railways will also benefit the agriculture sector in terms of efficient logistical and supply chain management, the industry expected a lot more from the Budget to support farmers who are the backbone of our country.
Ajay Kakra, Leader – Food and Agriculture, PwC India said, “The focus on start-ups and AgriTech in the budget will be helpful for the development of a digital ecosystem and technology inclusion in the agri sector. However, most industry aspirations remain unmet.
Balram Yadav, Managing Director of Godrej Agrovet said, “It is a balanced budget that is focused on infrastructure boost, supporting agriculture sector with incentives and technological fillip. River interlinking projects, Ken-Betwa link will definitely improve farming and livelihood facilities to farmers and local population. The decision to revise syllabi of agricultural universities, and use of Kisan drones for crop assessment, digitization of land records, spraying of insect pesticides is a step in the right direction to modernize the agriculture sector. Introduction of post offices into the core banking sector will provide an impetus to financial inclusion in the rural parts of the country. Yes, there were expectations which have not found space in the budget, but as the FM stated, it’s a budget that looks at overcoming the pangs of pandemic and focus on the next 25 years of growth.”
Subhashis Banerjee, CIO, ARTPARK (AI & Robotics Technology Park) said, "Using Drones for crop assessment, digitization of land records as well as spraying of insecticides and nutrients is a great initiative taken by the Indian government. The agriculture sector will be transformed with the use of drones as well as other futuristic technologies. Govt should take steps to enhance this technology and map the efficacy of such measures so that there is quantifiable data for future decision making. At ARTPARK, we are already supporting General Aviation under ARTPARK innovation program to bring this initiative by the government into reality."
D.R.E Reddy, CEO and Managing Partner, CRCL LLP said, "The Union Budget 22-23 have taken a growth-oriented approach for most of the sector focusing majorly on agriculture, farming, education and health sector. Starting with the PM Gati Shakti which will put forth the economy giving a boost to the supply chain and employing over 44% of the population in this sector while continuing to contribute to the country’s gross value. The encouragement to Agricultural universities will create necessary awareness of organic farming, modern-day agriculture, and will enable to provide better career opportunities for the upcoming generation. The idea of the Kisan drone for crop assessment, digitization of land records, spraying of insecticides and nutrients will give inclusive development to farming. With this phase, India is to grow at 9.27%, the highest among all large economies. With a focus on contributing to the environment, chemical-free natural farming focusing on soil, biodiversity and human well-being is a welcome move. Overall major decisions taken are favouring in striking a balance between boosting rural demand and investing in infrastructure while continuing on the path of fiscal consolidation to maintain macro stability."
Siraj Chaudhry, MD & CEO, NCML said, the budget has made a sincere attempt to promote the use of technology in Agriculture and make it future-ready. The last mile digital connectivity has the potential to drastically alter the Agri landscape of the country and by announcing the completion date of the Bharat Net project by 2025, the budget has attempted to bridge the digital divide between the villages and urban areas by 2025. Steps like the provision of funds through NABARD for Agri start-ups and rural enterprises will help in infusing capital in the budding ecosystem of value chain start-ups along with ensuring delivery of digital and hi-tech services to farmers and stakeholders of Agri value chains. With the availability of cheaper funds, these value chain start-ups will be able to widen their reach and help in providing much-needed technical support to farmers. Emphasis on the use of Kisan drones for crop assessments, digitization of land records are welcome steps and would help companies involved in the gathering of crop and weather data.
The announcement of a domestic scheme to reduce dependence on oilseed imports seems to be in line with the previously announced National Mission on Edible Oils – Oil Palm with a financial outlay of Rs.11,040 crores for reducing the edible oil imports. There is a real need to align the academic research in Agriculture with the market and the proposed reforms in the syllabi of Agricultural universities to align it with the needs of modern-day agriculture has been a long-standing demand of the Agriculture sector which finally seems to be fulfilled.
He added that the budget proposes to phase out a large number of exemptions applicable on some Agri products, chemicals, drugs. Though the fine print is still awaited this decision might have an inflationary effect on Agri nutrients, agrochemicals and pesticides which could further stoke food inflation.
CropLife India, an association of 15 R&D driven crop science companies, and the leading voice of the plant science industry in India, compliments the Government of India for initiating the use of Drones for Agrochemical Sprayingin the Union Budget 2022-23. The use of drones will be promoted for crop assessment, digitization of land records, spraying of insecticides and nutrients. The government will facilitate a fund with blended capital raised under the co-investment model through NABARD to finance agri start-ups and rural enterprises in a PPP model. The fund would finance start-ups for agriculture and rural enterprise relevant for the farm produce value chain. The activities of these start-ups will include inter-area support for farmer-producer organizations (FPOs), machinery for farmers on a rental basis at the farm level, and IT-based services.
Asitava Sen, Chief Executive Officer, CropLife India shared,"It is extremely delightful to witness the inclusion of “Kisan Drones” in the Union Budget 2022-23. The Government’s push towards Digitalization of Agriculture coupled with the focus on Hi-Tech services would enhance rural entrepreneurship and infuse youth back in the farmlands, boosting the income of the farmers”.
Sen added, “CropLife India is very happy to be part of the transparent deliberations within Department of Agriculture, Central Insecticide Board and Ministry of Civil Aviation and industry experts in the development of the pragmatic SOP and Guidelines for product Registration requirements for drone application for agrochemicals, in an exemplary schedule. These guidelines will now be studied and set the benchmark for ongoing engagements in other Asian countries.”
Raman Bhatia, Founder & Managing Director, Servotech Power Systems Limited said, the key decisions made on the renewable energy front illustrated in the Union Budget 2022 precisely addresses the most critical challenges halting India's speedy transition to a clean new era. The allocation of additional Rs 19,500 cr to the Production Linked Incentive (PLI) for the development of high-efficiency solar modules, thoughtful policies & action plans, supporting incentives for green bonds would not only accelerate our pace to achieve the 2030 target of 280 GW of installed solar capacity but would also help deliver on the 2070 net-zero emissions target commitment made by PM Narendra Modi at the COP26 summit held last year in Glasgow and play a pivotal role in tackling the global crisis of climate change.
Sanjiv Lal, MD and CEO, Rallis India, “Firstly, I must compliment the government for the pro-agriculture budget. The Government took important steps to boost the agricultural sector and it clearly reflects in the budget proposals. The involvement of Kisan drones for crop assessment, land records, and spraying of insecticides will not just drive the use of technology in the agriculture sector but also open up a spectrum of new development opportunities for farmers. The digital delivery of hi-tech services to farmers using the PPP model, with the involvement of public sector research, institutions, and other stakeholders of the agriculture value chains, is a key reform needed to keep up with the new era of digitization. The budget has been well thought through aiming to reduce the country’s dependence on imports of oilseeds through a comprehensive scheme to increase domestic production. In addition to this, the exemption is also being rationalized on tools for the agri-sector which are manufactured in India. Lastly, the announcement of the fiscal year 2022-23 being the International Year of Millets bring a new ray of light for the farmers.”
Ram Kaundinya, Director General, Federation of Seed Industry of India (FSII) said, “The Budget did not spell out any specific initiative for the biotech sector, however, it had a few things for the agri sector—especially the thrust on millets and increasing the domestic production of oilseeds. In the Economic Survey, the government underlined the need for enhanced research in agriculture as well as oilseeds in addition to the need for crop diversification. However, no announcements to boost research in breeding and biotechnology were made in the Budget. For instance, It would have been in the fitness of things if the government had said that modern science and biotech would be used to boost oilseeds production in the country. Also some incentives for crop diversification from rice and wheat to Oilseeds would have been very appropriate. Our industry sought restoration of tax-deductibility of research expenditure but looks like it has not been approved. ”
George Rajkumar, Country President, Grundfos India said, “Budget 2022 has laid the foundation for India@100 with the Government showing its commitment towards a sustainable and a greener future for Indians. With India expected to grow at 9.27%, the much-needed impetus towards climate action has been observed in this year’s budget. The allocation of INR 60,000 crores towards the ‘Har Ghar Nal Se Jal’ initiative to connect 3.8 crore households with tap water connection is commendable and will also boost the country’s water infrastructure. While nearly half of our population is residing in urban areas, the focus on sustainable measures for megacities must also include sustainable management of water and wastewater to prevent loss of water, improve recycling and also reduce destruction from natural calamities such as floods and droughts. The roadmap of transitioning towards a circular economy across sectors is also a welcoming move and will have a direct impact on our fight against climate change. The introduction of sovereign green bonds for funding of green infrastructure and the energy audit mechanisms for large commercial buildings will be a game-changer for infrastructure projects, enabling further carbon reduction while we grow our economy by leaps and bounds.”
Deepak Yadav, Founder, GreenSat Innovation Labs Pvt Ltd. said, the budget for 2022 has given both impetus and direction to the Agri-tech revolution, which has been gaining momentum in the country for the last few years. With the rapid penetration of technology and agriculture being the primary industry; it is encouraging to see the government take steps towards the promotion of this trend. The introduction of funding for start-ups via Nabard will help resolve the seed capital issues faced by numerous entrepreneurs. Today, data has become crucial for the success of almost every activity. In agriculture, thorough data analysis and data-based predictions are critical aspects that aid in improving the income of farmers, yield quantity, and quality of output. The announcement of steps like stress on Digital land records, India’s own digital currency, and increased usage of drones will establish a Big Data culture in the agriculture sector. These measures will make it easier for tech-backed agri-tech companies to reach out to an expanded set of farmers. With this budget, one can say that the gap between Indian farmers and prosperity is getting bridged with each passing day.
Dr. Kishore Indukuri, Founder & MD, Sid's Farm said, "We at Sid's Farm welcome the initiatives for farmers in the Union Budget of 2022. As a boost to our vision of natural farming, the Government has announced the promotion of chemical-free natural farming throughout the country. That the Government will launch a scheme of PPP mode with the involvement of public sector research and extension institutions along with private agritech players and stakeholders of agri value chains, is also an encouraging step towards creating efficient building blocks and greater reach. All in all, a good budget for the agri sector."
Dhiresh, Co-founder and CEO of agri-tech startup Neem Tree Agro Solutions, says that The union budget 2022, caters well to the expectation of the farmers. Their pending MSP of 2.37 lakh crores for the Rabi season wheat and Kharif season paddy will be directly paid to them in their bank accounts, which I feel is an upright step. Availability of credit facilities has always been an area for the government to ponder upon and the budget 2022 deals with it in an effective way. Also key steps like the introduction of domestic schemes to reduce dependency on oilseed imports and infrastructure development by railways for small farmers was the need of the hour and I feel good to see it being incorporated in the Budget.
The expectations of the agritech industry was exorbitant from this year’s Union budget and the Government has presented some great initiatives, which is in alignment with the expectations. The promise to finance start-ups in agriculture and rural enterprises for farm produce value chain in accordance with NABARD is praiseworthy. Use of Kisan Drones for crop assessments, land records and spraying of insecticides is very convenient. We firmly believe that this year is going to be the year of ag-tech start-ups, the year is also important as this is the target year for doubling the farmers’ income.
Mrityunjaya Singh, Managing Director, CLAAS Agricultural Machinery Pvt. Ltd. says, “We at CLAAS India have always believed in the welfare of farmers by promoting effective farm practices. The outlay of direct MSP in the Union Budget for paddy & wheat will be a boon to small & medium-sized farmers. The focus on digital intervention to improve farming efficiency will further boost this subject where a lot of action is already being seen through start-up enterprises. The inclusion of post-harvest processes, targeted use of biomass in Thermal power plants will result in major protection of the environment. CLAAS sees this as an opportunity to grow further in India and make farmers' lives even better with the support of the government.”
Ramesh Doraiswami, Managing Director and Chief Executive Officer, National Bulk Handling Corporation (NBHC) said, “We welcome the proposals announced in the Union Budget presented by the Hon'ble Finance Minister Smt. Nirmala Sitharaman yesterday. The Budget priority on stimulating growth and employment through a substantial infra-led capital investment of Rs.7.5 lakh crores is commendable. Another notable feature of the Union Budget is its support to technology-led growth. Agriculture sector has been given further impetus through initiatives such as the Oilseeds mission, promotion of Kisan Drones for crop assessment/protection, direct MSP benefit credit to farmers, support to organic farming and the post-harvest value chain.”
Ravichandran Purushothaman, President of Danfoss India said, “We welcome the progressive and growth-oriented budget presented by the Finance Minister Nirmala Sitharaman for 2022-23. As part of India’s new blueprint of infra growth for the ‘Amrit Kaal’, the increased capital expenditure, 35.40 percent above last year, will create more infrastructure, which will have a huge multiplier effect on the economy. With economic growth pegged at 9.2%, ahead of other large economies, and a sharp focus on sustainability and circular economy, India is well poised to withstand the challenges and reach closer to the $5 trillion GDP ambition.
With capital expenditure estimated at INR 10.68 lakh crore for 2022-23, the government has laid out the roadmap to boost India’s holistic growth. The Budget has also given the much-needed impetus to India’s agriculture and education sector with measures such as 2.37 lakh crore direct MSP payment to farmers, DESH stack, One Class One Channel. By promoting chemical – free natural farming, industries can now lead the way in boosting sustainable productivity and increased income of farmers.
While the highlight of the budget was on healthcare and infrastructure sector, some prudent initiatives for MSMEs and India Inc for start-ups have also been announced. The announcements related to green bonds and energy savings for commercial buildings, highlights India’s commitment to the reduction of carbon emissions.
To facilitate energy management, Government of India has promoted the adoption of the Energy Service Company business model for large commercial buildings. By enabling capacity building and energy audits, performance contracts, common measurement and verification protocols, this service helps in imbibing energy savings as a core value in industries across India. By providing major financial allocations to energy efficiency and data centres the path towards clean energy storage is clearer than ever. We hope that Budget 2022 acts as a guiding force to lead our government’s 'India@100' initiatives.”
