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Indian Economy

Economic Stimulus-III

  • 16 May 2020
  • 8 min read

Why in News

Recently, the Union Finance Minister announced the measures to strengthen Infrastructure Logistics, Capacity Building, Governance and Administrative Reforms for Agriculture, Fisheries and Food Processing Sectors as part of the third tranche of Atmanirbhar Bharat Abhiyan.

Key Points

  • Agri Infrastructure Fund
  • Formalisation of Micro Food Enterprises
    • A ₹10,000 crore scheme promoting ‘Vocal for Local with Global outreach’ will be launched to help 2 lakh Micro Food Enterprises (MFEs) who need technical upgradation to attain Food Safety and Standards Authority of India (FSSAI) food standards, build brands and marketing.
    • Existing micro food enterprises, FPOs, Self Help Groups (SHGs) and Cooperatives will be supported.
    • The focus will be on women and SC/ST owned units and those in Aspirational districts and a Cluster based approach (e.g. Mango in Uttar Pradesh, Tomato in Karnataka, Chilli in Andhra Pradesh, Orange in Maharashtra etc.) will be followed.
  • Pradhan Mantri Matsya Sampada Yojana
    • The scheme will be launched for integrated, sustainable, inclusive development of marine and inland fisheries.
    • ₹11,000 crore for activities in Marine, Inland fisheries and Aquaculture and ₹9000 crore for Infrastructure (fishing harbours, cold chain, markets etc) shall be provided.
    • The focus will be on Islands, Himalayan States, North-east and Aspirational Districts.
  • National Animal Disease Control Programme
  • Animal Husbandry Infrastructure Development Fund
    • Under it, a fund of ₹15,000 crore will be set up, with an aim to support private investment in Dairy Processing, value addition and cattle feed infrastructure.
      • Animal rearing or husbandry is considered an associate business with agricultural activities in rural India and is an integral component of Indian agriculture, supporting the livelihood of the rural population.
    • Incentives will be given for establishing plants for export of niche products.
      • A niche product is a product targeting a specific section of a larger industry and market. Niche products are often (but not always) more expensive than more generic products.
      • Example: Organic foods, Speciality foodstuff like high-quality coffee, Customisable products, etc.
  • Promotion of Herbal Cultivation
    • 10,00,000 hectare will be covered under Herbal cultivation in next two years with an outlay of ₹4,000 crore which will lead to ₹5,000 crore income generation for farmers.
    • The National Medicinal Plants Board (NMPB) has supported 2.25 lakh hectare area under cultivation of medicinal plants and will bring 800-hectare area by developing a corridor of medicinal plants along the banks of Ganga.
      • NMPB was set up by the Government or India on 24th November, 2000 to promote medicinal plants sector.
      • Currently, the board is located under the Ministry of AYUSH.
  • Beekeeping Initiatives
    • With an outlay of ₹500 crore, Government will implement a scheme for:
  • Extension of Operation Greens
    • Operation Greens run by the Ministry of Food Processing Industries will be extended from Tomatoes, Onion and Potatoes (TOP) to all fruit and vegetables, with an outlay of ₹500 crore.
    • It will provide 50% subsidy on transportation from surplus to deficit markets, 50% subsidy on storage, including cold storages and will be launched as pilot for the next 6 months and will be extended and expanded.
    • This will lead to better price realisation to farmers, reduced wastages and affordability of products for consumers.
  • Amendments to Essential Commodities Act, 1955
    • Under the amendments to the Essential Commodities Act (ESA), agriculture food stuffs including cereals, edible oils, oilseeds, pulses, onions and potatoes shall be deregulated.
    • Stock limits will be imposed under very exceptional circumstances like national calamities, famine with surge in prices.
    • Further, no such stock limit shall apply to processors or value chain participants, subject to their installed capacity or to any exporter subject to the export demand.
  • Agriculture Marketing Reforms
    • A Central law will be formulated to provide:
      • Adequate choices to the farmer to sell their produce at remunerative price.
      • Barrier free Inter-State Trade.
      • Framework for e-trading of agriculture produce.

Advantages from the Reforms

  • The two recent reforms of amendment in the ECA and the proposed formulation of a Central law that will not bind farmers to sell their crop only to licensed traders in the Agricultural Produce Market Committee (APMC) mandis of their respective talukas or districts will empower farmers.
    • ECA will define clear triggers in terms of “price surges” for imposition of stocking limits.
    • These provisions will be incorporated in the Act itself to remove any scope for administrative ambiguity.
    • This will help in inflation-targeting within the ceiling of 6% as prescribed by the Reserve Bank of India.
  • While agriculture is a state subject and state governments have accordingly enacted their own APMC Acts, the new Central law apparently relies on Article 301 (Freedom of trade, commerce and intercourse) of the Constitution along with entries in the Seventh Schedule (defines and specifies allocation of powers and functions between Union and States).
    • These give powers to the Centre to regulate all interstate and intrastate trade and commerce in foodstuffs, which can be used to create an integrated national market by removing restrictions placed by APMC laws.

Source: PIB

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