The Finance Commission said it will look into all the recommendations made by the panel for finalising its own report to the Central government for revenue sharing with states for the five years from FY22 to FY26
Private sector players should be roped in for anchoring specific schemes to scale up farm exports from India for which the Central government could act like an enabler, a high level panel has told the Fifteenth Finance Commission (FFC).
The panel which had members such as ITC Chairman and Managing Director Sanjiv Puri and Nestle India chairman and managing director Suresh Narayanan has recommended ways to scale up farm exports from $40 billion to $70 billion in a few years, FFC said in a statement. The panel gave its report to FFC on Friday.
The Finance Commission said it will look into all the recommendations made by the panel for finalising its own report to the Central government for revenue sharing with states for the five years from FY22 to FY26. FFC will recommend performance-based incentives to states to accelerate reforms in various areas including in the farm sector.
The panel said that agriculture exports would need about $8-10 billion in investments across inputs, infrastructure, processing and other demand boosting measures. Additional exports will likely to create about seven to 10 million jobs and these measures will lead to higher productivity and farmer income, FFC said in its statement, quoting the panel’s recommendations.
These suggestions are likely to drive reforms in states after the Narendra Modi administration rolled out key reforms in July by way of Presidential orders to unshackle the farm sector and boost farmer incomes.
These measures lifted the legal hurdles in the development of a seamless national market for farm produce and sought to open up new avenues for farmers to sell their wares. The Centre also prohibited setting stock limits on agriculture produce except in times such as war or famine and allowed trading in farm produce outside wholesale markets without being subject to state levies.
Agriculture and allied activities covering dairy, animal husbandry and food processing was also a key part of the ₹20 trillion financial package finance minister Nirmala Sitharaman announced in May.
FFC said the high level panel suggested that focus should be on 22 crop value chains and that existing schemes, Finance Commission allocation and private sector investment should be used to finance the measures meant to support farm export growth. At present the Central government transfers 42% of its tax revenues to states. FFC will recommend the new formula for the five years from FY22.