Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
AGRICULTURE & FERTILIZER
BUDGET HIGHLIGHTS & IMPACT
In the budget, government has continued to provide thrust on its four-pronged
strategy covering 1) agricultural production 2) reduction in wastage of produce 3)
credit support to farmers and 4) impetus on the food processing sector.
Last year Nutrient Based Subsidiary (NBS) policy was successfully implemented for
all fertilizers except urea. The policy has been well received and the availability of
fertilizers has improved in the country. The extension of the NBS regime to cover
urea has also been under consideration.
To deal with the production and distribution bottlenecks, government has increased
allocations for the various schemes under the ongoing Rashtriya Krishi
Vikas Yojna (RKVJ) from Rs 67.5 bn last fiscal to Rs 78.6 bn in 2011-12. Similarly,
following are the key takeaways for the agriculture sector.
n 27% increase in targeted agriculture credit from Rs 3750 bn last year to
Rs 4750 bn in 2011-12.
Impact: Government has been constantly aiming at increasing the direct lending
to the farmers. In addition to the 25% increase in proposed agriculture credit,
the present interest subvention scheme of providing short term crop loans at
7% to farmers is further reduced to 4%. These higher outlays for the sector
provide a positive outlook for the sector. Continuance of loan concessions to
the farmers would also help in sustaining current growth in rural demand.
n Enhancing the storage and cold chains to boost the agriculture supply
chain in the country; expediting the processes of setting up of Mega food
parks
Impact: Strengthening the food supply chain has been among the key focus
areas of the government. It aims at expediting the process of setting up 15
mega food parks in addition to the proposed 15 in 2011-12. This is likely to
improve linkage between agriculture and industries and reinforce meaningful
investment in the sector. Government has also proposed for the introduction
of various viability gap funding schemes to boost public private partnership
in the sector.
n Reduction of basic custom duty on micro-irrigation equipment from 7.5%
to 5%.
Impact: Irrigation has been a thrust area for the government. Accelerated
irrigation programs that entail significant addition of farm land required to
be irrigated is likely to benefit from this. Micro irrigation is considered as
an environment friendly and efficient means of irrigation especially for dry land
farming.
n Include capital investment in fertilizer production as an infrastructure sub
sector.
Impact: Investment in fertilizer sector is capital intensive. Capacity addition
in this space has remained muted since past few years. Including capital
investment in the fertilizer production as an infrastructure space would benefit
the sector in the medium to long term.
n Special attention to palm oil promotion
Impact: The domestic production of edible oil meets only 50% of country's
annual demand. The gap in supply is met with relatively pricey imports.
Government has proposed to provide Rs 3 bn to bring 60,000 hectares of land
under palm plantation by integrating farmers with the market.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
AGRICULTURE & FERTILIZER
BUDGET HIGHLIGHTS & IMPACT
In the budget, government has continued to provide thrust on its four-pronged
strategy covering 1) agricultural production 2) reduction in wastage of produce 3)
credit support to farmers and 4) impetus on the food processing sector.
Last year Nutrient Based Subsidiary (NBS) policy was successfully implemented for
all fertilizers except urea. The policy has been well received and the availability of
fertilizers has improved in the country. The extension of the NBS regime to cover
urea has also been under consideration.
To deal with the production and distribution bottlenecks, government has increased
allocations for the various schemes under the ongoing Rashtriya Krishi
Vikas Yojna (RKVJ) from Rs 67.5 bn last fiscal to Rs 78.6 bn in 2011-12. Similarly,
following are the key takeaways for the agriculture sector.
n 27% increase in targeted agriculture credit from Rs 3750 bn last year to
Rs 4750 bn in 2011-12.
Impact: Government has been constantly aiming at increasing the direct lending
to the farmers. In addition to the 25% increase in proposed agriculture credit,
the present interest subvention scheme of providing short term crop loans at
7% to farmers is further reduced to 4%. These higher outlays for the sector
provide a positive outlook for the sector. Continuance of loan concessions to
the farmers would also help in sustaining current growth in rural demand.
n Enhancing the storage and cold chains to boost the agriculture supply
chain in the country; expediting the processes of setting up of Mega food
parks
Impact: Strengthening the food supply chain has been among the key focus
areas of the government. It aims at expediting the process of setting up 15
mega food parks in addition to the proposed 15 in 2011-12. This is likely to
improve linkage between agriculture and industries and reinforce meaningful
investment in the sector. Government has also proposed for the introduction
of various viability gap funding schemes to boost public private partnership
in the sector.
n Reduction of basic custom duty on micro-irrigation equipment from 7.5%
to 5%.
Impact: Irrigation has been a thrust area for the government. Accelerated
irrigation programs that entail significant addition of farm land required to
be irrigated is likely to benefit from this. Micro irrigation is considered as
an environment friendly and efficient means of irrigation especially for dry land
farming.
n Include capital investment in fertilizer production as an infrastructure sub
sector.
Impact: Investment in fertilizer sector is capital intensive. Capacity addition
in this space has remained muted since past few years. Including capital
investment in the fertilizer production as an infrastructure space would benefit
the sector in the medium to long term.
n Special attention to palm oil promotion
Impact: The domestic production of edible oil meets only 50% of country's
annual demand. The gap in supply is met with relatively pricey imports.
Government has proposed to provide Rs 3 bn to bring 60,000 hectares of land
under palm plantation by integrating farmers with the market.
No comments:
Post a Comment