Budget 2024 Expectations: Smart Irrigation To Agri-Credit; Here's What Agriculture Sector Seeks

Budget 2024 Expectations: The total Budget of the Ministry of Agriculture and Farmers Welfare in FY23-24, is Rs 1.25 lakh crore. Of this, provision of Rs 60,000 crore has been made for PM-Kisan

In the Union Budget for FY23-24, Finance Minister Nirmala Sitharaman allocated Rs 1.25 lakh crore to Ministry of Agriculture and Farmers' Welfare, including Agricultural Education and Research. Of this, provision of Rs 60,000 crore has been made for the Modi government's scheme, Pradhan Mantri Kisan Samman Nidhi (PM-Kisan). Modi government increased the allocation in agriclulture by manifold from Rs 27,662.67 crore in 2013-14. On February 1, 2024, Finance Minister Nirmala Sitharaman will unveil the Interim Budget for FY25.

There are about 86 per cent small farmers in the country, who have been greatly benefited through the Kisan Credit Card (KCC). Rs 23,000 crores has been allocated for this, to enable farmers continue to avail its benefit. The government wanted farmers to focus on Animal Husbandry, Dairy and Fisheries, hence the agricultural loan target has also been increased to Rs 20 lakh crore. Provision of Rs 450 crore has been made for the Digital Agriculture Mission started by the Centre, and about Rs 600 crore was allocated for the promotion of agriculture sector through technology.

According to experts, this Budget is likely to keep the focus on fiscal consolidation and increase welfare spending, however, may not involve any major policy changes. They broadly anticipate tax relief measures and announcements to support agriculture and the rural sector, while maintaining a focus on the capex push. 

Ashvin Patil, founder and director of Biofuels Junction, in his pre-Budget expectations, said that the inclusion and recognition of those working with agri-residues as feedstock for biofuels in the priority sector lending mandate in the Budget can help open up significant financing opportunities for smaller players in the industry and rural entrepreneurs.

"Currently, aspects such as tractor financing are part of priority sector lending, which benefits from lower interest rates. It would not only provide financial impetus to emerging sectors within agriculture but also align with broader goals of sustainability and innovation in agricultural practices. It will also encourage farmers to refrain from stubble burning and contribute to the growing biofuel industry, creating a sustainable cycle of waste-to-wealth," Patil said.

Like other sectors, agriculture is  also eyeing better alocation. However, since 2024 is an election year, the finance minister will present an Interim Budget or a Vote on Account in February, rather than a comprehensive annual Budget. The new full Budget will come after the general elections.

Sanjay Borkar, CEO and co-founder, FarmERP, said the Agriculture Accelerator Fund in the previous Budget provided significant support to agri-tech start-ups. “We are hopeful for policies that not only streamline regulatory processes but also encourage cross-border collaborations, fostering a global, collaborative approach. The key to advancing our agricultural sector lies in government initiatives that incentivise cutting-edge technologies, encompassing sustainable and precision farming, AI-driven analytics, and smart irrigation systems,” he said, while that a favourable Budget should allocate resources for agricultural technology R&D, focusing on solutions to address evolving agri-business needs.

Hemant Sood, founder at FinDoc is hopeful ad expects that Budget will be forward-looking, eyeing to cater to the next 25 years. “The Budget can boost economic growth while covering a wide range of sectors, including agriculture, digitalisation, green energy, and catering to all economic classes. The agriculture sector is also given attention, with the allocation of Rs 79,000 crore for the Pradhan Mantri Awaas Yojana.”