The 2021-2022 Union Budget came with several new changes for the economy, especially the Agtech sector by way of budgetary increases to the agricultural ministry, the agricultural sector and allied services as well as major central sector schemes, which together form the foundation for India’s Agtech sector. There was a significant budgetary increase as compared to previous years, with Finance Minister, Nirmala Sitharaman, having delivered the 2021 Union Budget Speech.
The Agtech Sector Budgetary Breakup
The Agricultural Ministry
The agricultural ministry was given a budget expense of Rs 1.32 lakh crores with the breakup being, Rs 1.22 lakh crore being allocated to the Department of Agriculture, Cooperation and Farmers’ Welfare for revenue expenditure and 56 crores being allocated for capital expenditure.
The Department of Agricultural Research and Education on the other hand only received Rs 8,513 crores for revenue expenditure and was given no allocation for the capital expenditure.
Agriculture and Allied Services
The ministry’s budget allocation aside, the agricultural sector and the allied services witnessed a rise in its budget allocation, making the Agtech sector one of the largest funded sectors of the 2021-2022 budget allocation breakup. The agricultural sector and the allied services sector received Rs 1.48 lakh crores for 2021-2022.
The Outlay of Major Schemes
When it comes to the Major Central Sector Schemes, the Agtech sector saw a more specified budgetary allocation towards its efforts and purposes. The budget allocation for the ‘Promotion of Agricultural Mechanization for in-situ Management of Crop Residue’ was Rs 700 crores from last year’s Rs 600 crores.
On the extreme end of the spectrum, the ‘Agriculture Infrastructure Fund (AIF)’, which had seen a revised budgetary allocation in the 2020-2021 budget for Rs 208 crores, saw a drastic spike in the 2021-2022 budgetary allocation of Rs 900 crores.
Another staggering jump in allocation was that of ‘Crop Science’ with a budgeting of Rs 708 crores, a significantly higher budget than last year’s allocation of Rs 612 Crores.
What Agtech Players Can Look Forward to:
During her two-hour budget delivery, Sitharaman also announced an increased allocation of funds to ‘Rural Infrastructure Development Fund’, from Rs 30,000 crores to Rs 40,000 crores. This is a significant development as these investments will increase rural-Agri infrastructure development such as enhanced crop monitoring and post-harvest facilities.
Many Agtech players see the increase in the credit as a sign of good things to come and a larger role for the agricultural and Agtech sectors in the economy.