The expectation that the Finance Minister would give the right signals to investors in the agriculture, warehousing and cold chain infrastructure space through an integrated package of measures to be announced in the Budget has been largely belied.
The Finance Minister has, as in the last year’s budget, announced a Rs 5,000 crore allocation for creation of warehousing including cold stores using RIDF funds to be administered through Nabard. Following the Budget speech last year, Nabard had also announced an interest subvention and re-finance scheme through banks that lend to such warehouse infrastructure projects. Unfortunately, for reasons not known, RBI objected and the scheme stands scrapped. A similar announcement shows that the Government and the RBI do not know what the other side is doing. It is hoped that the Finance Minister will bring clarity on this issue in the coming days and this will not remain a paper announcement.
The budget allocation of Rs 10,000 crore towards the proposed Food Security legislation is clearly a gross under-provision. However, the extension of the crop loan interest subvention scheme to crop loans given by private sector banks is a welcome announcement. Similarly, the incentive given for aggregation of farm produce to farmer producer organisations and producer companies is also a good initiative. Exemption of service tax for testing of agricultural produce will also help the movement towards standardisation and gradation of farm produce.
Sanjay Kaul, MD & CEO, NCML