The Union Minister of Agriculture and Farmers Welfare Narendra Singh Tomar said in Rajya Sabha that the govt is keen on enhancing the participation of private and corporate entities into the agriculture sector. He listed a host of incentives aimed at roping them in.
While public investment usually strengthens infrastructure of the sector, private investment is associated with enhanced productive capacity. 100 per cent FDI in food retail, as envisaged by the govt, will encourage foreign investments in establishing appropriate post-production infrastructure to strengthen the food supply chains, Tomar felt.
Tomar felt the provision of exemption to Farmer Producer Companies (FPCs) under Income Tax Act – the Budget 2018 has offered an IT exemption to all FPCs with a turnover of upto Rs 100 crore per annum, by considering their incomes as agricultural income will incentivise corporate sector to partner with farmers as FPCs.
The Model Agriculture Produce & Livestock Marketing (Promotion & Facilitation) Act 2017, which provides the opportunity for private sector to set up private markets, alternate marketing channels, online market platforms etc. in both agriculture and livestock marketing.
The Model Agriculture Produce & Livestock Contract Farming & Services Act (Promotion & Facilitation) Act, 2018, which enables private sector investments by way of capital, technology and extension all along the value system.
As per estimates of capital formation released by Central Statistics Office, Ministry of Statistics and Programme Implementation, Gross Capital Formation (GCF) in agriculture and allied sectors at current prices for the year 2016-17 (latest available) is estimated at Rs 64410 crore and Rs 279066 crore for public and private sector respectively.
As per report of the “Committee on Doubling Farmers Income”, in absolute terms, the additional private investment in agriculture sector that will be required to enable the doubling of farmers’ real income in India by 2022-23 is Rs. 78,424 crore at 2015-16 prices (Rs. 46,298 crore at 2004-05 prices).
The total quantum of private investment should increase (with added investment of Rs. 78,424 crore) from Rs. 61,000 crore in 2015-16 to Rs. 139,424 crore by 2022-23, at 2015-16 prices growing at an annual rate of 12.5 per cent.