The entire country is focused on February 1, 2024, as Finance Minister Nirmala Sitharaman will unveil the 2024 interim budget on this day. The budget year 2024–25 is rapidly approaching. India is a country primarily focused on agriculture, and this industry receives significant funding every year.
The country’s eyes are focused on February 1, 2024, as Finance Minister Nirmala Sitharaman is scheduled to unveil the 2024 interim budget. The budget for 2024–25 is drawing near. India is mostly an agricultural country, and this industry receives significant funding in each budget.
Let’s see what this sector might earn from the budget for 2024.
Experts predict that in the next budget for 2024, the government will raise the Agricredit aim. The estimated sum is between Rs. 22 and Rs. 25 lakh crores. The government will take action to guarantee that qualified farmers will receive this credit.
Agri Credit Upgrade:
As of now, 82% of the Rs 20 Lakh crore Agri credit target has been reached by the end of December 2023. The agriculture and rural sectors would likely continue to be given priority in this interim budget for 2024, according to the Director General of the industry association CII Chandrajit Banerjee.
Grant for Fertilizers:
CII contends that there is a need for a more rationalization of the present fertilizer and food subsidies.
The data from the 2011–12 Household Consumer Expenditure Survey serves as the foundation for the current Indian food subsidy scheme. To build such an important subsidy scheme, this is an antiquated database. Therefore, a plan to implement the latest data should be developed by the Indian government.
A subsidy of Rs. 4 trillion is anticipated for fertilizers in the next fiscal year. In FY25, food subsidies are expected to cost $26.52 billion, about 10% more than the $24.11 billion allotted in FY24, according to the Ministry of Consumer Affairs, Food, and Public Distribution’s forecasts.
taxes on R&D expenditures:
Additionally, the government is granting a 200% tax rebate on R&D spending in order to encourage breakthroughs in agriculture. The CEO of Namdhari’s Group, Gurmukh Roopra, asserts that the forthcoming 2024 budget need to include this tax rebate as well. This will motivate producers of tractors and other agricultural mechanization companies to continually prioritize research.
Increased Focus on Farm Automation:
India is an agricultural country, although there is not much farm mechanization there. Mechanization of the agricultural sector is at just 40%, a far cry from the 75% and 57% of China and Brazil, respectively.
Given that the number of workers in the agricultural industry is expected to decline in the near future, now is the right moment for the Indian government to refocus its efforts on farm mechanization. There have been significant changes in agricultural employment over the past 60 years.
As an illustration, in 1980 72% of Indians were employed in agriculture; by 2000, that percentage had dropped to 60%.
The agriculture industry employed 43 percent of India’s workforce in 2022. Research on the market indicates that this labor share will eventually drop to as low as 25%. Given that farm mechanization helps address labor shortages, it is highly valued in light of the ongoing decline in the number of farmers.
Furthermore, given India’s declining productivity, farm mechanization is imperative. India falls short of China, whose agricultural productivity per hectare is 5 tons for wheat and 6.7 tons for rice. Just 2.4 tons of rice and 3 tons of wheat are produced per hectare in India.
Farming mechanization and providing incentives for tools are two strategies that could increase overall production.
What Are Industry Experts’ Opinions on the 2024 Projected Budget?
Mr. Narinder Mittal, Managing Director & Country Manager, CNH India & SAARC, believes there is a lot of potential in this industry. He said, “We expect a forward-looking Union Budget this year as well, given that the government has made agriculture a top priority.” We hope to see policies that can further support the use of innovation and technology to improve agri-mechanization in our nation, thereby preparing the agricultural sector for the future. Long-term industry success will depend on initiatives to raise farmers’ knowledge of contemporary farming techniques, financial literacy, and other pertinent topics.”
Mr. Narinder Mittal, Managing Director & Country Manager, CNH India & SAARC, believes there is a lot of potential in this industry. He said, “We expect a forward-looking Union Budget this year as well, given that the government has made agriculture a top priority.” We hope to see policies that can further support the use of innovation and technology to improve agri-mechanization in our nation, thereby preparing the agricultural sector for the future. Long-term industry success will depend on initiatives to raise farmers’ knowledge of contemporary farming techniques, financial literacy, and other pertinent topics.”
Every budget made an effort to address the issues facing the farming industry and give significant financial support to both the farmers and the major players in this sector. The next budget is an interim budget for 2024; the final budget for 2024 is expected in July 2024, following the Lok Sabha elections.
Nevertheless, with its anticipated tax breaks, substantial Agri-credit, and fertilizer subsidies, this 2024 budget is probably going to make a significant contribution to the expansion of the agriculture sectors. Industry insiders advise the government to adopt a new stance in favor of mechanizing agriculture and providing subsidies for farm equipment.
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