The Indian Finance Minister, Nirmala Sitharaman, has announced a range of measures to support the country's agricultural sector and agritech startups, including a new ₹1 lakh crore corpus for long-term interest-free loans
Emphasising the pivotal role of the agricultural sector in the country's economy, Finance Minister Nirmala Sitharaman unfolded an array of announcements in the interim budget. These measures not only aim to fortify the agricultural domain but also offer a significant impetus to agritech startups across the nation.
"Farmers are our 'Annadata'… The sector is poised for inclusive, balanced, and higher growth and productivity. These are facilitated by farmer-centric policies, income support, coverage of risks through price and insurance support, and promotion of technologies and innovations through startups," stated the finance minister.
In addition to outlining the Modi government's efforts in agriculture, Sitharaman detailed plans to leverage technology, foster research and development, and enhance private sector participation to amplify productivity.
Building on the success of Nano Urea, the application of Nano DAP to various crops is set to expand across all agro-climatic zones. A strategic initiative will be devised to achieve 'atmanirbharta' for oil seeds like mustard, groundnut, sesame, soybean, and sunflower. The budget also allocates a renewed focus on research for high-yielding varieties, widespread adoption of modern farming techniques, market linkages, procurement, value addition, and crop insurance.
Furthermore, a comprehensive programme supporting dairy farmers will be formulated, drawing from the success of existing schemes such as the Rashtriya Gokul Mission, the National Livestock Mission, and Infrastructure Development Funds for dairy processing and animal husbandry.
The implementation of Pradhan Mantri Matsya Sampada Yojana (PMMSY) will be intensified to bolster farm yields to five tonnes per hectare from the current 3 tonnes. The objective is to double exports to ₹1 lakh crore and generate 55 lakh employment opportunities shortly, establishing five integrated aquaparks.
The budgetary announcements for the agricultural sector received a warm welcome from agritech stakeholders. Abhilash Sethi, Investment Director at agriculture-focused VC fund Omnivore, expressed optimism, noting that the focus on agriculture and food processing is an encouraging sign for agritech startups.
Addressing the agritech community's expectations, Sitharaman revealed the establishment of a ₹1 lakh crore corpus to provide 50-year interest-free loans. The corpus aims to furnish long-term financing or refinancing with extended tenors and low or nil interest rates. Although the sectors benefiting from this corpus were not specified, agritech stakeholders are hopeful of inclusion.
Prashant Vasan, CEO of Madras Mandi, praised this move, stating, "This will provide us with a conducive financial environment to further innovate and contribute to the agricultural ecosystem." The budget also extended startup tax benefits until March 31, 2025, aligning with the growth strategy and encouraging strategic partnerships.
However, the interim budget left specific points untouched. Agritech ecosystem stakeholders believe there is a pressing need for IP-led biotechnology and alternate materials startups in agriculture. They advocate for government intervention as the first buyer to establish credibility for these startups in global markets. Additionally, they emphasise the importance of large-format credit guarantee schemes and policies to limit buyer credit periods, especially for B2B agri-trading companies.