Interim Budget: Agritech industry expects credit push, incentives for tech enablement

Agritech players in India sit tight as the upcoming interim budget kindles hopes for a push on credit, incentives for technology enablement within Agriculture with artificial intelligence and the digital public infrastructure.

This comes as Finance Minister Nirmala Sitharaman is scheduled to present the interim Budget on February 1, which will be the last major economic document of the Narendra Modi-led government ahead of the 2024 Lok Sabha elections.

The interim budget follows a year when the Union Budget marked significant progress in addressing crucial reforms for the agricultural sector, with 'green growth' among its seven key focuses. The advancements ranged from augmenting farmer credits, promoting green initiatives and embracing precision farming. There was also a noteworthy emphasis on artificial intelligence-driven processes and robust financial support was allocated to diverse agricultural verticals, including fisheries and animal husbandry.

According to media reports, the government is set to announce a substantial increase in the agricultural credit target to Rs 22-25 lakh crore for the next fiscal, in the upcoming interim Budget.

Karthik Jayaraman, co-founder and managing director at Waycool, believes that in the interim Budget, the focus lies on sustaining the positive momentum in agriculture and nurturing startup growth. Jayaraman believes that while 2023 laid a promising foundation, some challenges persist, demanding nuanced solutions for sustainable growth.

He expects incentives for private equity investments in the food and agriculture sector. “...There is a need to incentivise investments into the sector, to create durable, large scale organisations in the food and agri space. The incentivisation can, for example, be in the form of exempting long-term capital gains on private equity investments in the food and agriculture sector, fostering innovation or supporting agriculture related activities,” said Jayaraman.

In a recent interview with Moneycontrol, Chattanathan Devarajan, co-founder of Arya.ag said he expects an increased allocation for key farm sectors as there is a need to improve productivity, efficiency and farm-level incomes. He added that there is a need to route subsidies into the incorporation of new technology into the post-harvest segment of agriculture.

Similarly, Waycool’s Jayaraman also expects rapid incorporation of the digital public infrastructure stack into agriculture and further promotion of the use of AI in the sector.

“A national grid of  sensors that can track atmospheric and soil conditions, and capture precise data on the same, will be an asset that can be leveraged by multiple stakeholders for yield prediction, disease onset prediction, AI based irrigation management and several such applications,” he added.