What the Agritech Industry Expects From Union Budget 2023-24
Agritech sector certainly deserves a sharp focus by government in the incoming union budget since the traditional agriculture industry is ripe for disruption
By Rajesh Ranjan • Dec 23, 2022
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Agritech industry has become an attractive avenue for investors and governments likewise owing to the rich dividends that technological application can provide: driving better productivity and sustainable practices. Traditional agriculture is replete with many sectoral inefficiencies due to fragmented infrastructure, issues emanating from supply chain managements, and insufficient data on landholdings in remotest places.
In light of the structural challenges that have become rampant in rural India, governments are relying on agritech startups with unique agtech solutions and a bigger risk appetite to resolve some of the impending challenges, in order to create value for all the relevant stakeholders.
The Union Budget 2022-23 is a testament to the public-private partnership that needs to be undertaken and the essential role that government of India needs to play. We can see the government taking cognisance of the importance of kisan drones, chemical-free natural farming and supporting the delivery of digital and high-tech services to farmers across the country. Moreover, seeking financial support for startups may become partially easier with the co-investment model under NABARD facilitating raised funds with blended capital.
One such area that needs a closer attention by government in the Union Budget 2023-24 is the tax relaxation for various players across the value chain which have created scalable solutions impacting farmers lives for good. For instance, the onset of Farming-as-a-service (FaaS) and Farm-to-fork has opened better opportunities for farmer community to improve their farming practices and thereby the generated output. Startups who are facilitating such a sea change need government support in terms of text sops so that they can smoothen their business operations.
Similarly, subsidised credit is the need of the hour for early startups and SMEs in the agrarian sector who have the solutions in place but don't possess the economic wherewithal or marketing budgets to reach farmers at scale. Low interest rate loans will certainly help businesses scale up their operations and reach the right target audience within the entire farmer community with their products or services.
Hence, startups that are laser-focused on accelerating technological adoption and use artificial intelligence (AI), machine learning (ML), remote sensing, big data, blockchain technology, internet of things (IoT), Geographic Information System (GIS) technology, drones and robots to revamp India's agricultural sector - will be thoroughly supported by Indian government and should see some add-on measures highlighted in Union Budget 23-24.
The government has already dispensed financial support to hundreds of startups through Innovation and Agri-entrepreneurship Development Programme under the Rashtriya Krishi Vikas Yojana (RKVY), and there are expectations to see an uptick in similar funding in 2023 too.
What's most promising for private players is government's agenda to drive Public -Private Partnerships (PPP model) in order to bring the latest technological services and offerings to farmers across the country.
Agritech sector certainly deserves a sharp focus by government in the incoming union budget since the traditional agriculture industry is ripe for disruption that will benefit both farmer community and businesses.
