Marking the Indian economy’s entry into the Covid-recovery phase, this year’s budget has built on the fiscal decisions of 2021 with more concrete forward-thinking steps for Indian agriculture. In my opinion, the highlights of this budget were the recognition of technology as key to boosting agriculture, the focus on sustainability in farming and the support to the startup community as valuable development partners.

The long simmering conversation around drone usage came to a fruitful conclusion with the Sub-Mission on Agricultural Mechanization (SMAM) program. Promoting drone use for spraying and monitoring in agriculture will help scale up precision farming massively and startups will play an important role in facilitating ‘drone shakti’. Under NABARD’s stewardship, the new agritech focused fund with blended capital is poised to help agri-entrepreneurs and millions of farmers via FPOs to become more climate smart and resilient. While some have pointed out the lack of any subsidy for fueling drone adoption, what the startups in this space really need is a transparent and smooth regulatory framework towards which SMAM is the first step.

Acknowledging the impact of global warming, rising cost of cultivation and concerns around human and planetary health, sustainable agriculture has been pushed to the centre stage. This is an important step towards climate-proofing Indian agriculture and securing the livelihoods of millions of smallholders in the country. The budget went as far as the educational institutes (agricultural universities) and spot lit the much-needed update of their curriculum to make students more suited to solve the changing needs of Indian agriculture. This for me signified a deeper understanding of the current challenges and more integrated ways to begin addressing them. We have much to do in the agrifood life sciences space that can accelerate sustainable agriculture and I hope this is a stepping stone to more targeted support in the near future.

We should have been tipped off by the budget on a tablet but this year the focus on digitizing India is commendable. It is particularly difficult to lend to farmers due to various systemic barriers to access and falling back on informal sources hamper farmer profits. Establishing 75 digital baking units via scheduled commercial banks, ensures a rural focus. It is also an encouraging sign for agri fintech startups to enter the space and challenge the status quo with innovations. Also access of digital tools to rural India will have a larger ripple effect of more agritech solutions being available and accessed by farmers.

If the last budget left the agritech sector a little despondent, this one made up for it to a certain extent. Throughout the year, the Startup India and Stand-Up India initiatives have helped our sector grow aggressively. While a year’s increment in tax incentives is welcome news, more provisions for agritech startups would have been ideal as it is still a relatively young space. Entrepreneurs are addressing chronic problems in the value chains, navigating various government regulations and building connections at the grass-root level. Therefore, agritech startups need longer to stabilize and may require more targeted support from the Centre.

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Processed agri commodities represent a $150 billion market. These commodities typically go through well-established clusters of processing units that control this high-value market. In light of the plan to enhance Indian roadways by 25,000 Kms, and the ‘One Station One Product’ program, it is a safe bet that we are finally taking significant steps towards decentralizing food processing, which can help retain more value of the customers wallet closer to the growers.

I find this Budget a heartening signal for technology focused entrepreneurs who are looking at the agri sector, to be a little bolder and start their journey sooner than later.

The author is a partner at Omnivore. Views expressed are personal

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