Further to Prime Minister Shri Narendra Modi’s announcement on economic reforms aggregating INR 20 lakh crores to help the economy recover from the impact of Covid 19, on May 15, 2020, the Hon’ble Finance Minister released the third set of reforms with special focus on agriculture and allied industries. This is expected to give special impetus to sectors like agriculture, fisheries and other allied activities.

The key reliefs announced by the Finance Minister in part III of the reforms are the following:

  • A scheme for providing interest subvention at 2% per annum announced for dairy cooperatives for the financial year 2020-21.
  • Agri-Infrastructure fund of Rs 1,00,000 crores extended for funding agriculture infrastructure projects at farm gate and aggregation point.
  • Rs 10,000 crores fund for formalisation of Micro Food Enterprises (MFEs) to improve health and safety standards by upgrading technology of unorganised MFEs. This is enable them to attain FSSAI standard along with brand building and marketing.
  • Funds of Rs 20,000 crore to be extended for fishermen through Pradhan Mantri Matsya Sampada Yojana for integrated sustainable, inclusive development of marine and inland fisheries. The fund is divided into Rs 11,000 crores for development of activities in marine, inland fisheries and aquaculture and the remaining Rs 9,000 crores is earmarked for developing fishing harbours, cold chains, markets etc.
  • National Animal Disease Control Programme to be implemented with a total outlay of Rs 13,343 crore to address foot, mouth disease and brucellosis.
  • Animal husbandry infrastructure development fund of Rs 15,000 crores to be set up to support private investment in dairy processing, value addition and cattle feed infrastructure.
  • Rs 4,000 crores to be extended for promotion of herbal cultivation and National Medical Plant Board to develop a corridor of medicinal plants along the banks of Ganges.
  • Rs 500 crores to be extended for beekeeping initiatives. A scheme is to be introduced for infrastructure development in relation to integrated beekeeping development centres, collection, marketing and storage centres. Special focus is to be given on implementation of standards and developing traceability system and capacity building with thrust on women.
  • A scheme to subsidise transportation and storage including cold storages by 50% for Tomatoes, Onion and Potatoes farmers which shall expanded and extended to all fruits and vegetables.
  • Facilitative legal framework to be created to enable farmers to engage with aggregators, large retailers, processors, exporters in a fair and transparent manner.
  • Agricultural Marketing Reforms to provide marketing choices to farmers to sell produce at attractive prices, barrier free inter-state trade and a framework for e-trading of agricultural produce.
  • Amendment of Essential Commodities Act, 1955 to be done to attract investment and make agriculture sector competitive. Cereals, edible oil, oilseeds, pulses, onion and potato to be deregulated.

The proposed reforms could potentially unfetter the agriculture markets, bolstered by the growing agritech sector. The exact blueprint of the proposed reforms will be known only once the necessary notifications are issued. The next leg of reforms (i.e. part IV of the reforms) are likely to be announced tomorrow (May 16, 2020) and we will be running similar updates for the same.

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