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BUDGET

Budget - Farmers-agro processing units link to cut post-harvest losses
Thursday, 02 February, 2017, 08 : 00 AM [IST]
Our Bureau, Mumbai
Though the proposals made in Union Budget 2017-18, seem to have excluded the announcements expected by food processing companies except MSMEs, it does offer a solution for the long-standing issue of post-harvest losses.

The Budget has proposed to integrate farmers who grow fruits and vegetables with agro processing units for better price realisation and reduction of post-harvest losses. A model law on contract farming would therefore be prepared and circulated among the states for adoption.
 
Further, since a large number of milk processing units set up under the Operation Flood Programme have become old and obsolete, a Dairy Processing and Infrastructure Development Fund would be set up in NABARD with a corpus of  Rs 8,000 crore over three years. Initially, the fund will start with a corpus of Rs 2,000 crore.

Agri reforms
The agriculture sector has received a record breaking allocation of 10 lakh crore. Reforms were undertaken on the suggestions submitted by the National Institution for Transforming India(NITI) Aayog's study over farming. The new policy will be launched considering the Punjab pattern of the contract farming to uphold interests of the farmers. The new policy will enable farmer to grow exclusively for the the food manufacturer or the company. The central policy in this regard is underway which will be taken up by the states.

FDI
The Finance Minister has announced that the government has decided to abolish the Foreign Investment Promotion Board (FIPB) in 2017-18.  He said that a roadmap for the same will be announced in the next few months. The minister said that this became possible as The Foreign Investment Promotion Board (FIPB) has successfully implemented e-filing and online processing of FDI applications and more than 90% of the total FDI inflows are now through the automatic route. In the meantime, further liberalisation of FDI policy is under consideration and necessary announcements will be made in due course, the minister added.
 
Highlights of the Budget 2017-18
  • For  the The Pradhan Mantri Mudra Yojana the lending  target has been set at Rs. 2.44 lakh crore in 2017-18, doubling it from the ones in 2015-16 with priority to be given to Dalits, Tribals, Backward Classes, Minorities and Women.
  • Coverage of National Agricultural Market (e-NAM) to be expanded from 250 markets to 585 APMCs. Assistance up to Rs 75 lakh will be provided to every e-NAM.
  • In order to make MSME companies more viable, income tax for companies with annual turnover upto 50 crore is reduced to 25%.
  • An integrated Public Sector ‘Oil Major’, to match the performance of huge international and domestic private sector oil and gas companies, is proposed.
  • An expert committee will be constituted to study and promote creation of an operational and legal framework to integrate spot market and derivatives market in the agricultural sector, for commodities trading.
  • e- NAM to be an integral part of the framework.
  • The Foreign Portfolio Investor (FPI) Category I & II exempted from indirect transfer provision. Indirect transfer provision shall not apply in case of redemption of shares or interests outside India as a result of or arising out of redemption or sale of investment in India which is chargeable to tax in India
  • In order to make MSME companies more viable, income tax for companies with annual turnover upto ` 50 crore is reduced to 25%
  • Under the reoriented MGNREGA to support our resolve to double farmers’ income, about 10 lakh farm ponds are expected to be completed by March 2017 against the targeted 5 lakh farm ponds. This will contribute greatly to drought proofing of gram panchayats. The budgetary provision of Rs.38,500 crores under MGNREGA in 2016-17 has been increased to Rs. 48,000 crores in 2017-18, the highest ever allocation for MGNREGA, the Finance Minster added.
Lastly, Customs duty on Cashew nut, roasted, salted or roasted and salted has been increased from 30% to 45% in order to encourage the domestic industry.
 
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