29 January 2019
On Friday 25 January 2019, the Prime Minister of India forecasted that “New India” is on the way to becoming the fifth largest economy in the world. This growth in the Indian economy is primarily consumer driven and the export needs to outpace its current growth rate to make India the   fifth largest economy in the world. With this view, the Government of India has introduced “Agriculture Export Policy” in December 2018. The policy is aimed at doubling the agricultural exports, and farmer’s income by 2022, and enable farmers to benefit out of export opportunities in the international market.  

As food processing industry is gaining strong ground in India, the sector has high expectations from the government for the upcoming budget. Government too recognizes that the growth of food processing industry and job creation in associated sectors will bring down the rural distress as well as reduce farmer’s loan waiver hunt. Some of the prime areas that need to be covered in the forthcoming budget are discussed here.
We believe, rationalization of tax rates, improvement in the food value chain and a higher budgetary allocation for the food ministry are some of the key expectations that every stakeholder in this sector is hoping to be addressed in the upcoming budget. SKP budget wish-list for food processing sector are as follows


  • Increase and expansion of minimum selling price to some new crops as well, if not all food crops across the country,
  • The government has launched e-NAM however there is no significant impact on the income of the majority of the farmers due to the lower adoption rate of e-NAM. Currently, total food grain distribution through e-NAM stands at only 5.8% on an average since its inception in April 2016. Therefore, we believe, the government is likely to provide additional measures to increase the farmer’s income through this initiative,
  • Currently, contract farming is largely done through informal agreement and there is a need to create a framework for contract farming and create formal linkages with farmers which will increase the farmer’s income,
  • As the election is due this year, we believe, the government is likely to take a populist view in the food processing sector and propose insurance coverage of crops by the government and/or partial waiver of farmer’s loan,
  • Higher incentives for contract and group farming to help farmers and contractors move up in the value chain.
  • To promote – “Make in India” and compliment “Agriculture Export Policy, 2018”, the government is likely to provide export incentives grant for food processing companies,
  • Reduction in the corporate tax rate in line with expectations from other industries. 
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