The finance minister's thrust on the proposal to grant 'infrastructure sector' status to cold storage facilities, exempting cold chain equipment from excise duties, besides the overall thrust on ensuring agricultural growth, was supported by commodity exchanges and experts. They said that incentives to farming and warehousing sectors announced by the finance minister would help improve the agricultural value chain and unlock the contribution that farmers could make to the country's economic growth in the years to come.
"The finance minster has recognised that a major cause for food inflation has been due to supply-side constraints, exacerbated by huge gaps in post-harvest storage infrastructure for agricultural produce, especially for fruits and vegetables," Sanjay Kaul, managing director and CEO, National Collateral Management Services Ltd (NCMSL), said.
Responding to industry's fervent pleas, all post-harvest infrastructure, including cold storages, have been granted 'infrastructure status' by the finance minster.
"Hitherto, only port handling facilities of agri produce had been declared as 'infrastructure'," he said. It is estimated that there exists a 32-million tonne shortage in storage capacity for agricultural produce in the country and there is need of investment to the tune of Rs 10,000 crore for the sector.
"The recent episode of inflation in vegetables and fruits has exposed serious flaws in our supply chain and the government-regulated mandis sometimes prevent retailers from integrating their enterprises with the farmers. There is need for the State Governments to review and enforce a reformed Agriculture Produce Marketing Act urgently," Pranab Mukherjee said in his address in Parliament.
"The proposed review of the APMC Act should spur some changes. I also welcome the announcement of direct transfer of cash for kerosene, diesel and fertilisers, as it would stop pilferage, ensure benefits reach those they are intended for and also make the subsidy bill worthwhile," R Ramaseshan, MD & CEO, NCDEX, said.
" The decision to create 15 lakh metric tonne of silo storage capacity under the Public Entrepreneurs Guarantee Scheme is a positive step and the government should look at silo storage for all its long term storage needs like having buffer stock and strategic reserves,"