Budget 2023-24 Expectation: Agrochemical industry seeks PLI scheme, GST cut in pesticides

Budget 2022-23 had brought in renewed focus on the agriculture sector. The agrochemical industry indeed needs more support in going forward. While the industry collectively supported announcements aligned towards promoting sustainable agriculture such as the introduction of Kisan Drones, Sovereign Green bonds, Rs 2.37 lakh crore Minimum Support Price (MSP) for farmers, encouraging natural farming, among others, a lot needs to be done to augment the agricultural sector, especially the agrochemical manufacturing side. It is imperative considering the Government’s wholehearted focus towards Make in India and Aatmanirbhar Bharat. Many players in the agrochemical sector have requested ministries to encourage indigenous manufacturing of agrochemicals in the last few years. Address import duty, custom duty anomalies Currently, the import duty on agrochemical raw materials is 7.5 per cent and the import duty on finished products is 10 per cent. We would recommend the Government to increase this glaring gap so that our local manufacturers can be benefited and our dependence on imports can be minimized to some extent. In line with the same, we would also expect the Government to introduce a Production Linked Incentive (PLI) scheme for the sector and raise the custom duty on imports of formulations from abroad. The PLI scheme will hugely benefit domestic manufacturers, reduce the sector’s dependency on imports from China, incentivise local production and contain import dependencies. The Government should consider increasing custom duty on formulations imports to encourage indigenous manufacturers who have the requisite expertise and capacity to not only meet burgeoning domestic demands but also cater to export requirements. Reduce GST on pesticides The Government should also consider reducing the GST on pesticides to 12 per cent from the current 18 per cent to bring parity in taxation on agro inputs. The GST on fertilisers is 12 per cent and like fertilisers and seeds, pesticide is also an agro input product and therefore, should be treated equally. It is important to note that crops worth approximately Rs 90,000 crore are lost every year owing to pests and diseases. Therefore, a reduction in GST on pesticides will greatly benefit farmers and increase the agricultural production in our country. Pesticides are an important agro input that assists in curbing pests and diseases on plants and plays a significant role in increasing agricultural production. A reduction in GST will enable more and more farmers in India to protect and harvest their crops without incurring much losses, as well as help them in getting better returns on investments. Adopt policies to support new tech for pesticides There is also an urgent need to adopt policies and provisions to support new technologies for Intermediates and Technical Grade Pesticides. Even the Pesticides Manufacturers and Formulators Association of India (PMFAI) has requested the Government to extend financial support and other expansion assistance for developing technologies for intermediates and technical grade pesticides domestically, under the ‘Make in India’ programme. Increase funds to agri sector We would also like to urge the government to increase fund flow to the agriculture sector in the budget FY 23-24, so as to improve farming infrastructure across the country. This will play an instrumental role in increasing farmer’s income. Our country might have become self-sufficient as far as foodgrain production is concerned but it has also been ranked 7th on the Global CRI (Climate Risk Index, 2021). This coupled with the growing population (we are to surpass China in 2023 itself) mandates the increase in agricultural output as a necessity. Global percentage of hungry population has been increasing after declining for a decade. We must take the responsibility of being the ambassador of goodwill beyond our domestic duties. It is important to increase the quantity and quality of our produce for which agrochemicals are a necessity. In conclusion, we must make efforts to help farmers have access to the best quality agrochemicals at affordable prices. The writer is the Founder-Director, Safex Chemicals Ltd. Views are personal. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.