COVID-19, Highlights of Government of India’s financial package Part – III: Highlights of May 15, 2020
Seven (7) economic measures for strengthening infrastructure, capacities and building better logistics
I. Economic measures for strengthening infrastructure
1. Change effected by Government/proposed change to be effected
One lakh crore rupees (Rs. 1 lakh crore) was allocated for the development of agricultural and food processing infrastructure.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
The Government has announced provision of one lakh crore rupees (Rs. 1 lakh crore) for aggregators, primary agriculture cooperative societies and for strengthening farm gate infrastructure. It includes cold storage, supply chain and start-ups wanting to procure directly from the farmers.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
The fund announced as part of the stimulus package will help in strengthening the farm gate infrastructure for farmers. The Indian food economy is mainly urban and is dependent on rural-urban supply chains. However, given the current state of the economy, the Government needs to monitor the system-wide effects such as food price inflation and related social unrest. If ignored, such results may undermine food supply chains and, thus, food security in the short term and productivity investments in the medium run.
II. Vocal for Local with global outreach
1. Change effected by Government/proposed change to be effected
Government introduced a ten thousand crore rupees (Rs. 10,000 crores) scheme for the formalisation of Micro Food Enterprises (MFE). The scheme promotes Prime Minister's vision of Vocal for Local with global outreach.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
Ten thousand crore rupees (Rs. 10,000 crores) would be allocated for food enterprises. It would be executed on cluster-based approach. Health and well-being, nutritional, wellness-related, herbal products, forest-based produce will be included in the same.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
The ten thousand crore rupees (Rs. 10,000 crores) scheme for the formalization of Micro Food Enterprises (MFE) and the cluster-based approach will help in building capacity at regional levels and better supply chain integration. Overall, the announcements will help in addressing supply chain issues. The marketing of local products globally will be assisted with the help of this fund. This is intended to benefit two lakh (2 lakh) micro food enterprises, by bringing up to level, modernising them, branding them, etc.
III. Economic measures for marine activities
1. Change effected by Government/proposed change to be effected
Twenty thousand crore rupees (Rs. 20,000 crore) would be allocated to marine activities, fisheries by the Government.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
The Finance Minister (FM) announced twenty thousand crore rupees (Rs. 20,000 crore) for fishermen under the Pradhan Mantri Matsya Sampadha Yojana.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
The measures announced will help in reviving the agriculture, dairy, fisheries and allied sectors, taking closer to the Prime Minister’s vision of self-reliant country. All COVID19 related deadline extensions relating to fisheries activities, many of them involving overseas contracts, have been honoured and many measures to help marine and coastal farmers have been taken. Fifty five (55 lakh) people are expected to get employment from this program.
IV. Economic measures for animals
1. Change effected by Government/proposed change to be effected
National Animal Disease Control Programme for Foot and Mouth Disease and Brucellosis was launched by the Finance Minister with a total outlay of thirteen thousand three hundred forty three crore rupees (Rs. 13,343 crore).
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
The FM announced over thirteen thousand crore rupees (Rs. 13,000 crore) for one hundred per cent (100%) vaccination of all cattle to treat foot and mouth disease.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
The measures announced will help in reviving the agriculture, dairy, fisheries and allied sectors, taking closer to the Prime Minister’s vision of self-reliant country. India is one of the largest milk producers in the world, and the suggested initiatives and reforms will help the country to make a mark internationally with the higher quality dairy products. These are going to fulfil the aim of doubling farmers’ income and establishing Indian products in the international market
V. Economic measures for dairy infrastructure
1. Change effected by Government/proposed change to be effected
The FM allocated fifteen thousand crore rupees (Rs. 15,000 crore) for dairy infrastructure.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
The FM announced that an Animal Husbandry Infrastructure Development Fund of fifteen thousand crore rupees (Rs. 15,000 crore) will be set up.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
The measures announced will help in reviving the agriculture, dairy, fisheries and allied sectors, taking closer to the Prime Minister’s vision of self-reliant country. India is one of the largest milk producers in the world, and the suggested initiatives and reforms will help the country to make a mark internationally with the higher quality dairy products. These are going to fulfil the aim of doubling farmers’ income and establishing Indian products in the international market.
VI. Economic measures for herbal plants
1. Change effected by Government/proposed change to be effected
The FM allocated four thousand crore rupees (Rs. 4,000 crore) for promotion of herbal plants.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
The FM announced that four thousand crore rupees (Rs. 4,000 crore) will be allocated for promotion of herbal cultivation. Ten lakh (10,00,000) hectare will be covered in the next two (2) years for the same.
4. Clarification required
Currently, no clarifications are required.
5. AJC
The measures announced will help in reviving the agriculture and allied sectors, taking closer to the Prime Minister’s vision of self-reliant country. These are going to fulfil the aim of doubling farmers’ income and establishing Indian products in the international market.
VII. Economic measures for bee keeping
1. Change effected by Government/proposed change to be effected
The FM allocated five hundred crore rupees (Rs. 500 crore) for bee-keeping initiatives.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
The FM announced that five hundred crore rupees (Rs. 500 crore) for bee-keeping to benefit two lakh (2 lakh) bee-keepers. Government to implement a scheme for infrastructure development related to beekeeping which aims to increase income for with special thrust on capacity building of women.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
The measures announced will help in reviving the agriculture and allied sectors, taking closer to the Prime Minister’s vision of self-reliant country.
Three (3) economic reforms for governance and administrative
I. Amendment of Essential Commodities Act, 1955 (ECA)
1. Change effected by Government/proposed change to be effected
The Government is to amend the ECA to enable better price realisation for farmers. Agriculture products including cereals, edible oils, oilseeds, pulses, onions, and potatoes would be de-regulated from essential commodities.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
The Government will make changes to the ECA to enable better price realisation for farmers. Agriculture foods like cereals, edible oils, oilseeds, pulses, onions and potatoes will now be deregulated. There will be stock limit imposed under very exceptional circumstances like a famine with surge in prices. Stock limits won't apply to processors or value chain participants.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
Amendments to the ECA, reforms in agricultural marketing and risk mitigation through predictable prices will empower farmers, strengthen agricultural food processing linkages and enable demand-driven value added agriculture. The reforms will encourage investments in food processing and together with the infrastructure outlays will contribute in shaping a competitive agricultural value chain, reduce wastages and raise farmer incomes. The decision to amend the ECA is a correct measure to ensure supply chain continuity and trade flows in the event of short supplies and exceptional circumstances. In an event like COVID-19, this will be helpful to control supply chain disruptions.
II. Central law for farmers
1. Change effected by Government/proposed change to be effected
A central law will be formulated by the Government to provide adequate choices to the farmers to sell produce at an attractive price, barrier-free interstate trade and framework for e-trading of agricultural produce.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
A facilitative legal framework will be created to enable farmers for engaging with processors, aggregators, large retailers, exporters in a fair and transparent manner. There will be a central law so that farmers will have a choice to sell the products at fair price without any inter-state barrier. E-trading will be allowed.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
The Government will bring in a law to implement agriculture marketing reforms to provide marketing choices to farmers. The law will provide adequate choices to farmer to sell produce at attractive price. This would ensure that the farmers get better price and get assured returns before sowing season.
III. Central legal framework for farmers
1. Change effected by Government/proposed change to be effected
Government extended Operation Greens from Tomatoes, Onion and Potatoes (TOP) to all fruits and vegetables.
2. Date of applicability and period till when applicable.
Currently no date has been prescribed.
3. Brief synopsis of the change including prior position, change in position and effect of the change
The Government extended Operation Greens, which covers tomatoes, onions and potatoes to all fruits and vegetables. The scheme included fifty per cent (50%) subsidy on transportation from surplus to deficient markets. It also has a fifty per cent (50%) subsidy on storage, including cold storages. The pilot was done for six (6) months and will now be expanded and extended. The plan is expected to deliver better prices, reduced wastages and affordable produce.
4. Clarification required
Currently, no clarifications are required.
5. AJC viewpoint
The announcements will help improve farmer realisations and also help them build better market linkages for their produce.