“The state of agriculture in India is dismal despite farm sops in successive budgets year after year. There is a lot that needs to be done for the sector. At SLCM, we would like to see a clear policy thought process in the budget for the sector which till now was focused on the input side of the farm be it crop loans, subsiding fertilizers, etc.
There is a clear need for the sector to move ahead in terms of forward integration i.e. once the crop has got harvested there is a requirement for it to have credit finance behind it. There are lot of NBFCs and agri-tech companies which are trying to come in this space but are faltering for lack of finance at the right time and right price. So, it will be a welcome move if we see something on this side.
Coming to the post-harvest agri-logistics side i.e. warehousing, we have seen sops in terms of creation of assets but we have not seen steps to make the entire industry profitable. It is therefore imperative that going forward tax sops and liability lines are made available to these firms especially which are in the cutting edge agri-tech space to ensure that benefits of all the technology and schemes are passed on to the end consumer. This will create much needed pull for the sector, make the industry profitable thereby ensuring private capital / investment into the sector.
In the farm sector, the Return on Equity (ROE) is the very basic problem that the entire farm sector is facing. This is due to the fact that liability lines are not available in right time and right quantum. Since the sector is tackling majority of the population of India and consumption, it is important that some sort of tax sop structure is devised to educate and facilitate the sector.
One ask that has been there for some time now, has been to do away with GST on leases of warehouses, as lease expense on warehousing services provided on the leased warehouses is treated as commercial expense. GST that we have to pay on the leases of warehouses is an expense on us and there is no input mechanism on the same. We are of the view that such smaller things and larger sops in terms tax benefits and credit availability will help the industry grow faster and bigger.
Also, longer tenure growth of the industry should not be compromised to fix a shorter problem. A long term policy which clearly envisages movement towards the free market mechanism both in terms of pricing and volume of the industry therefore should be built in to help the industry.
There should be a national policy on agriculture which talks about free movement of goods, free flow of credit, and export and import policy of India. This will create larger and stable market and ensure credit availability which in turn will empower the sector to grow thereby ensuring private participation.”