Key Highlights (AH & Dairy): Budget Speech of Minister of Finance, GoI on February 1, 2020

Para 22(1): Prosperity to farmers can be ensured by making farming competitive. For this, farm markets need to be liberalised. Distortions in farm and livestock markets need to be removed. Purchase of farm produce, logistics and agri-services need copious investments. Substantial support and hand-holding of farm-based activities such as livestock, apiary, and fisheries need to be provided for. Farmers desire integrated solutions covering storage, financing, processing and marketing.

Para 23: Adopting sustainable cropping patterns and bringing in more technology are integral to our plan. All this and more can be achieved through working with and in cooperation with the States.

Para 23 (1): We propose to encourage those State governments who undertake implementation of following model laws already issued by the Central government:
a) Model Agricultural Land Leasing Act, 2016;
b) Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017;, and,
c) Model Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2018.

Para 23 (5): India has an estimated capacity of 162 million MT of agriwarehousing, cold storage, reefer van facilities etc. NABARD will undertake an exercise to map and geo-tag them. In addition, we propose creating warehousing, in line with Warehouse Development and Regulatory Authority (WDRA) norms. Our government will provide Viability Gap Funding for setting up such efficient warehouses at the block/taluk level. This can be achieved, where States can facilitate with land and are on a PPP mode. Food Corporation of India (FCI) and Central Warehousing Corporation (CWC) shall undertake such warehouse building on their land too.

Para 23 (7): To build a seamless national cold supply chain for perishables, inclusive of milk, meat and fish, the Indian Railways will set up a “Kisan Rail” – through PPP arrangements. There shall be refrigerated coaches in Express and Freight trains as well.

Para 23 (12): Non-Banking Finance Companies (NBFCs) and cooperatives are active in the agriculture credit space. The NABARD re-finance scheme will be further expanded. Agriculture credit target for the year 2020-21 has been set at Rs 15 lakh crore. All eligible beneficiaries of PM-KISAN will be covered under the KCC scheme.

Para 23 (13): Our government intends to eliminate Foot and Mouth disease, brucellosis in cattle and also peste des petits ruminants (PPR) in sheep and goat by 2025. Coverage of artificial insemination shall be increased from the present 30% to 70%. MNREGS would be dovetailed to develop fodder farms. Further, we shall facilitate doubling of milk processing capacity from 53.5 million MT to 108 million MT by 2025.

Para 23 (14): Blue Economy: Our government proposes to put in place a framework for development, management and conservation of marine fishery resources.

Para 24: Now, for the fund allocation for the 16 different steps mentioned in Para 23, they are being stated under two different categories:

For the sector comprising of Agriculture and allied activities, Irrigation and Rural Development an allocation of about Rs 2.83 lakh crore has been made for the year 2020-21. Its divided, inter-alia:
a) For Agriculture, Irrigation & allied activities – Rs 1.60 lakh crore
b) For Rural development & Panchayati Raj – Rs 1.23 lakh crore

(Dairy India Editorial Note: Improving the lives of those associated with agriculture and farming was one of the most anticipated budget reform this year. To that extent, the government has allocated Rs 2.83 lakh crore for agriculture, irrigation and allied sectors for 2020-21. The government also reiterated its goal of doubling the farmers’ income by 2022 and has announced a 16 points action plan for alleviating the agriculture sector.)

Review of Customs duty exemption for certain imported goods:
Customs exemption have been reviewed to weed out such entries that are redundant, outdated or have outlived their utility. On such review, 80 exemptions are being withdrawn by making suitable amendment/rescission of relevant notifications. The exemptions being pruned on review, inter-alia, include withdrawal of exemption/concessional rates on the following goods, namely:
Agro and animal based products Tuna bait, skimmed milk and certain milk products, sugar beet seeds, raw sugar, certain alcoholic beverages, whey and isolated soya protein, soya fibre, etc.

Para 119. Concessional tax rate for Cooperatives
Cooperative societies play an extremely important role in our economy in facilitating access to credit, procurement of inputs and marketing of products to their members. These cooperatives are currently taxed at a rate of 30% with surcharge and cess. As a major concession and in order to bring parity between the cooperative societies and corporates, I propose to provide an option to cooperative societies to be taxed at 22% plus 10% surcharge and 4% cess with no exemption/deductions. Further, I also propose to exempt these cooperative societies from Alternative Minimum Tax (AMT) just like companies under the new tax regime are exempted from the Minimum Alternate Tax (MAT).