Presenting the Union Budget 2023-24 in the Parliament on Wednesday, Finance Minister Nirmala Sitharaman said that an Agriculture Accelerator Fund will be set up to encourage agri-startups by young entrepreneurs in rural areas and the agricultural credit target will be increased to Rs 20 lakh crore. The minister also highlighted that digital public infrastructure for agriculture would be built as an open source, open standard and interoperable public good. The budgetary provisions announced for the agriculture and cooperative sector are transformative.
“To realise this vision, the government has already initiated the computerisation of 63,000 Primary Agricultural Credit Societies (PACS) with an investment of 2,516 crores. In consultation with all stakeholders and states, model bye-laws for PACS were formulated enabling them to become multipurpose PACS. A national cooperative database is being prepared for country-wide mapping of cooperative societies,” highlighted the Finance Minister.
Welcoming the provision announced by the Finance Minister, Cooperation Minister Amit Shah dubbed the decisions as “unprecedented”, and said, “With the plan of setting up the world’s largest decentralised storage capacity, farmers associated with cooperative societies will be able to get fair prices. In the next 5 years, the government will also establish new multipurpose cooperative societies, primary fisheries societies and dairy cooperative societies in every panchayat.”
A new Ministry of Cooperation was formed with a mandate to realise the vision of ‘Sahakar Se Samriddhi’. The ministry has been allocated Rs 1150.38 crore for FY 2023-24. For 2022-23, the estimated budget for the ministry was Rs 900 crore which was revised to nearly Rs 1,624 crore.
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Decoding the budgetary provisions for agriculture and cooperative sectors from credit flow, facilities and fallout point of view, Anshumman Joshi, Cooperative banking expert and Chairman, Dhanvarsha Group says, “Computerisation of PACS would be immediately followed by digitisation. Sub-laws would be amended to create multi-purpose societies. Higher credit facilities and restructuring of PACS are pathbreaking measures and this will transform farmers’ income and life. Going forward, we will have warehouses at the district and village levels. Farmers would go there with their all kinds of produce – grains, vegetables, dairy, and fisheries among others and there will no middlemen at any level.”
To help the farmers in storing their produce, the government plans to set up a decentralised storage capacity. This will help farmers store their produce and realise remunerative prices through sales at appropriate times. The government will also facilitate the setting up of a large number of multipurpose cooperative societies, primary fishery societies and dairy cooperative societies in uncovered panchayats and villages in the next five years.
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“Digitalisation would strengthen the entire agricultural supply chain through revamped cooperative societies including PACS. We got clear indications that the government would be amending two very important Acts to accelerate the cooperative movement in the country. Both the Reserve Bank of India (RBI) Act 1934 and the Banking Regulations Act are expected to be amended during this Budget session. We strongly recommend that the RBI Board should consist of a sizeable number of government-nominated members who have a deep understanding of the cooperative sector. And Master Circulars pertaining cooperative banking should not come without their approvals,” expounds Joshi, adding that in order to protect farmers and cooperative institutions and to ensure banks should not frequently become defunct under 35A of the banking laws.
“Let half of the Board Members be nominated from the government with experience in cooperative banking along with a Deputy Governor with responsibilities of cooperative banking and institutions and see the transformation they can bring into the farming sector as a whole. With this provision, the RBI can ensure that its policies and rules in Master Circulars are issued with wider consultations and opinions of the nominated members,” recommends Anshumman Joshi.
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Rajesh Aggarwal, Managing Director, Insecticides India, says, “An integrated approach for a sustainable future is visible in the Budget 2023. The agriculture credit target is to be increased to Rs 20 lakh crore against Rs 18 lakh crore up in 2022-23 which is 11.11 per cent higher year-on-year basis. This is a very positive step for the enhancement and encouragement of the agro sector and the upliftment of the farmers. Also, with an investment of INR 2,516 crore for computerisation for 63,000 primary agriculture credit societies, the government has made an “agri push” for a better tomorrow. These steps will help the farmers to go to the next level of farming.”
Echoing similar views, Dr Kalyan Goswami, Director General, Agro Chem Federation of India says, “It’s a very much balanced budget. The proposed Agriculture Fund would encourage agri-startups by young people in the rural segment. Modernisation of over 63,000 primary agricultural credit societies would also boost in rural development.”
The experts dub Union Budget 2023-24 as a well-thought strategy of the government, a technology-driven and knowledge-based inclusive economy.
“The announcements made for the agriculture sector will augment production, promote science and tech-led agriculture, encourage cooperative societies for farmers and provide better-decentralised storage facilities. The hike in agriculture credit target to Rs 20 lakh crore will provide necessary financial aid to the farmers,” points out Sanjiv Lal, MD & CEO, Rallis India.
Narinder Mittal, Managing Director, CNH Industrial India & SAARC – Agriculture Division emphasises, “The Union Budget 2023 has a strong emphasis on sustainable agriculture and economic growth. It sets a record-high goal for agriculture credit of Rs. 20 lakh crore, which would enable Indian farmers to increase their output with the assistance of smart machines and techniques.”
