Budget 2024: Raju Kapoor seeks tax incentives for agri R&D investments by private sector

New Delhi: “The agricultural sector which is the backbone of the Indian economy has been through a challenging year. With monsoon playing truant, agricultural growth has diminished from 4.7% last year to 1.4%, which further added to the rural distress. This budget presents a crucial opportunity to address these concerns and propel the sector towards a brighter future,” said Raju Kapoor, Director, Industry & Public Affairs, FMC India while sharing his expectations for the Budget 2024.

“The government must prioritize agriculture and rural India, focusing on making farmers more resilient while simultaneously mitigating food inflation that disproportionately affects society’s underprivileged segments,” outlined Mr. Kapoor.

“Firstly, the budget must acknowledge the stark reality of food inflation, aggravated by stock restrictions on essential commodities such as pulses, wheat, and rice. This disproportionately affects the most vulnerable sections of society, demanding immediate attention. Similarly, the import dependence on pulses and oilseeds, the government’s commitment to providing free rations under the Annapurna Yojana, and climate change further necessitate a robust domestic production system supported by developing an innovation ecosystem,” Mr. Kapoor added further.

Sharing his recommendations, he opined: “The government should prioritize R&D investments aligned with national priorities, focusing on developing climate-resilient crop varieties, microbial products, and sustainable farming practices. To facilitate the widespread adoption of technology, the budget should also incentivize the private sector participation in building a robust agricultural innovation ecosystem. Tax incentives for R&D investments by the private sector can encourage the development and integration of cutting-edge technologies. Furthermore, GST on agricultural inputs, such as agrochemicals, should be brought under the GST Council’s purview and potentially lowered to 12% maximum to ease the financial burden on farmers.”

On Kisan Samridhi Yojana, Mr Kapoor feels that it should be strengthened to empower farmers with greater financial support and its utilization at farmers’ hands should be linked to the use of advanced agricultural inputs. “Kisan Samruddhi coupons that could be used to purchase agricultural inputs would enhance productivity. This will ensure timely access to essential resources and subsequent financial support to the farmers. We expect that the budget should have adequate resources for capacity-building initiatives, and should incentivize the investments by private companies to train farmer groups, particularly women, creating awareness and adoption of modern growing practices.  Easy access to adequate and affordable credit will further empower farmers to be able to adopt these technologies and enhance their livelihoods.”

“Extending the PLI scheme for production and export of latest innovation crop protection chemicals in India will provide long term dividend to India. Similarly, aligned to the theme of making India the Global Drone Hub, expanding the PLI scheme for building the agri-drone component manufacturing ecosystem will go a long way. In a nutshell, we envisage that this budget is focused on agriculture, which will further lay the foundation for a strong, sustainable, and prosperous future for Indian farmers and the nation,” he concluded.