29 January 2020 | Opinion
NuFFooDS Spectrum brings to you the industry expectations from the Union Budget 2020-21
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The Union Budget for 2020-21 is all set to be presented on Saturday, February 1, 2020.
What is likely to be announced and what not will be answered soon. Nevertheless, the industry is ready with its bag of expectations.
NuFFooDS Spectrum brings to you the industry expectations from the Union Budget 2020-21-
"India’s has a burgeoning young working population with a median age of 28.4, making the needs of nutrition and health through good quality food the most urgent need of the country. While many in urban India are calorifically sufficient, nearly 70% are nutritionally deficient, which causes several long-term health problems and diseases. The availability of a balanced diet for working adults is of utmost importance to individuals, as it is to the nation.
The critical need for India is for affordable, tasty, nutritional, and hygienic food made accessible to working millennials in an easy and convenient manner so they do not have to make compromises on health due to the type of food they consume daily.
At the same time, India’s food wastage is estimated to be around 67,000 million tonnes every year valued at Rs. 92,000 Crores, which can and must be saved with modern food preserving technologies.
We urge the Hon’ble Finance Minister to accommodate budgetary allocations in three important areas for a healthier India;
(1) Income Tax rebate for three years for companies helping reduce food wastage using modern food preserving technologies like cold-pasteurization High Pressure Processing (HPP) who can give assurance of extended shelf life of ready-to-eat, cooked meals of upto 4 months or more.
(2) Zero GST bracket for food processing companies that source agri-produce directly from farmers, fishermen and poultry farmers, creating farm-to-table access for agri-produce by eliminating the agricultural middleman."
Naveen Chander, Co-founder, NuTy, Bengaluru
"I would like to see a budget that gives due importance to the organic food sector. According to an ASSOCHAM-EY joint report, the Indian organic packaged food market is expected to grow from INR 533 million in 2016 to over INR 871 million by 2021. The government needs to create an ecosystem that helps enterprises to tap into the immense growth opportunities in this sector.
For more Indians to go organic, it’s essential to have a dedicated budget allocation for converting conventional farmers to organic farmers. We need smart schemes that promote natural and organic farming. Once farmers see the value addition in growing organic foods, efforts to raise awareness about its myriad benefits to human and environmental health will start bearing fruit - beyond select urban pockets. It helps Indians eat healthy and stay healthy.
Similarly, the government needs to incentivise companies to embrace sustainability. One major incentive could be to wave off GST for a short period of time for products with plastic-free packaging. This will help businesses to come up with innovative solutions and alternative technologies to reduce their environmental footprint. Whether it’s replacing single-use plastic with eco-friendly materials or packaging solutions that focus on recycling, the FMCG industry needs the right push from the government to herald a green tomorrow."
PC Musthafa, co-Founder and CEO, iD Fresh Food, Bengaluru
"In the past 4 years, the overall business has been affected by demonetization, GST implementation, Banking Crisis etc. The MSME sector contributes to around 30-40 percent of India's GDP despite the social, logistical and other challenges it is constantly subjected to. However, the nutraceutical industry has seen a double-digit growth consistently over this period, and I believe the Union Budget should take measures to ensure adequate flow of credit into the MSME sector, rationalize the GST as well as improve ease of doing business. This will help retain the growth and spur further demand for an already growing market."
Sushil Khaitan, CEO & Director, Purenutrition.me, Mumbai
"Indian agribusiness enterprises currently suffer from lack of new investments. The key agriculture productivity-enhancing segments such as the Seed sector, crop protection sector and farm mechanization have suffered from lack of new investments that is worth reflecting. Investment in innovation is insignificant due to the lack of risk capital flowing in this sector. The Billion Dollar plus invested is towards the e-commerce platforms and retail networks without any significant incremental investment in farm productivity-enhancing inputs or food process capacity creation. The government commitment of investing 1.5 billion in early-stage companies through the sovereign Venture Fund focused Fund of Funds is largely deployed in e-commerce and product aggregation investments. We do anticipate significant mortality for the start-ups for want of any scale up investment in innovation-intensive agriculture and food-related investments. For the last decade, we have denied every possible technology in agriculture due to impeding regulations and denial of product approvals. We foresee investment need of 1 Billion Dollar for the scale-up of investments in game-changing agriculture and life science start-ups that are currently left to exit without any investment flow for innovation validation and scale-up.
The government needs to see ways to ensure flow of early stage capital in agri and food ventures that are in the forefront of new innovation. Create a more accountable dispensation of the Fund of Funds investment in Funds that are sector focused in investments.
The government needs to unlock serious bottlenecks in regulations governing agri business. The National Biodiversity Act is a major bottleneck that cripples the agri input sector and agriculture research. The draconian act cripples investments in Indian seed sector and plant based process industry. Concerns of industry over the last decade to address the draconian provisions of this Act and the corresponding regulations remain unaddressed. The myriads of legal cases pending under this act deters any investor to make investments in this sector. Applied research focus for farm productivity is at a stand-still in public and private sector due to numerous restrictions imposed by the Act.
The potential for investment incentives in precision agriculture is enormous. The farm entrepreneurship has huge potential to attract significant investment in high throughput productive agriculture with youth engaging in farm entrepreneurship adopting contemporary high density farming. The focus on diversified horticulture crops and nutrition focused fruit orchards can bring competitive horticulture produce to feed the burgeoning retail network in the country and post-harvest processing opportunity."
K Vijayaraghavan Chairman, Sathguru Management Consultants (and) Partner, Innovation in Food & Agriculture Fund, Hyderabad