Feb 4, 20212 min read

Budget 2021: Government of India proposes ‘Agri Infra Cess’ & expansion of Operation Greens

Finance Minister Nirmala Sitharaman has announced the expansion of the scope of Operation Greens to boost the export of agricultural commodities. She said that to boost value addition in agriculture and allied products and their exports, the scope of the ‘Operation Greens Scheme’ that is presently applicable to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable products.

Also, she announced Agricultural Infrastructure and Development Cess aimed at improving infrastructure for the agriculture sector. The Agriculture Infrastructure Funds would be made available to APMCs for augmenting their infrastructure facilities.

While tabling the Union Budget 2021 in Parliament, she said:

“There is an immediate need to improve agricultural infrastructure so that we produce more, while also conserving and processing agricultural output efficiently and resulting in enhanced remuneration for the farmers,”

Agriculture Infrastructure and Development Cess (AIDC) has been proposed on import of specified goods including Apple -35%, Crude Palm Oil 17.5%, Crude Soya-bean oil -20%, Crude Sunflower seed oil -20%, Peas - 40%, Kabuli Chana - 30%, Bengal Gram - 50%, ChickPeas - 50%, Lentils - 20%, Wine- 100%, Vermouth and other wine of fresh grapes flavored - 100%, Other fermented beverages, for example, Cider, Perry, Mead, sake, a mixture of fermented beverages and non-alcoholic beverages - 100% and Brandy, Bourbon whiskey, Scotch, etc- 100%.

For the agriculture sector, she said that the MSP regime now stands at 1.5 times the cost of production across all commodities. The procurement has also continued to increase at a steady pace. This has increased payment to farmers substantially.

She said that around 1.68 crore farmers are registered and Rs 1.14 lakh crore of trade value has been carried out through e-NAMs. Keeping in view the transparency and competitiveness that e-NAM has brought into the agricultural market, 1,000 more mandis will be integrated with e-NAM.

Also, the Finance Minister proposed substantial investments in the development of modern fishing harbors and fish landing centers. To start with, 5 major fishing harbors – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – will be developed as hubs of economic activity.

Commenting on the Union Budget, Amith Aggarwal, CEO & co-founder, Agribazaar, says, “Whether, through the continued efforts towards the digitization of the agri-sector or the expansion of the Agri infra fund, I believe all the initiatives announced in the Budget will augur well for India's farmers and farming industry over the short-, medium- and long-term.”