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FM announces measures to Boost agri sector

Union Finance Minister Nirmala Sitharaman on Monday virtually tabled the much-awaited Union Budget 2021 post Covid-19 pandemic and amidst the much-hyped and politically sensitive farmers’ protests over the farmers’ bill.

FM announces measures to Boost agri sector
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FM announces measures to Boost agri sector

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New Delhi: Union Finance Minister Nirmala Sitharaman on Monday virtually tabled the much-awaited Union Budget 2021 post Covid-19 pandemic and amidst the much-hyped and politically sensitive farmers' protests over the farmers' bill. Therefore expectations were understandably very high. She announced a slew of measures to revive the sagging economy which registered a record decline last year. Sitharaman announced some reforms for the farmers of the country. She said that Rs 75,100 crore has been allocated for the farmers of the country. The FM also announced an increase in agriculture credit target to Rs 16.5 lakh crore in FY 2021-22.

Apart from this, the government also said that procurement of produce by the government under the Minimum Support Price (MSP) will continue at a steady pace. Under this, 43.36 lakh wheat-growing farmers will be benefited from government procurement under the MSP as against 35.57 lakh previously. The total amount paid to paddy farmers has also been increased to Rs 1.72 lakh crore in 2020-21. However, what possibly overshadowed under announcements at the end of her budget presentation was the imposition of Agriculture Infrastructure and Development Cess (AIDC) of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel.

However, there would be no additional burden on the consumer overall as the finance minister also proposed to reduce Basic Customs Duty on these items, she said.

"I propose an Agriculture Infrastructure and Development Cess (AIDC) on a small number of items. However, while applying this cess, we have taken care not to put additional burden on consumers on most items," FM Sitharaman said in her Budget speech. Consequently, unbranded petrol and diesel will attract basic excise duty of Rs 1.4, and Rs 1.8 per litre respectively. The Special Additional Excise Duty (SAED) on unbranded petrol and diesel shall be Rs 11 and Rs 8 per litre respectively. Similar changes have also been made for branded petrol and diesel.

Experts, however, said that they were expecting more aggressive and more focused measures to drive rural consumption. Since rural consumption is the key, the government was expected to consider investments in building rural infrastructure – roads, public transport, water etc in a much more focussed manner. With a view to ensure farmers' welfare and address the agrarian scenario, several efforts were expected to be directed to provide adequate water that could be used for modern irrigation and advanced farming techniques. At the same time, we could also expect fund allocations towards soil health, crop insurance to be allocated in the budget.One would have also thought that the budget would focus on food safety initiatives across the agri ecosystem by providing trainings and education programs across the value chain. In a bid to spur exports, one expected a slew of measures on improving food safety and quality or incentivizing food set-ups and storage facilitation centres.

Ritwik Mukherjee
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