The government's focus on boosting the farming sector will have wide benefits for India's broader economy, business leaders say, after a slew of announcements made in this year's union budget to support agriculture.
In the budget presented to parliament last week, measures put forward by finance minister Arun Jaitley for farmers include liberalising agricultural exports and ensuring farmers get higher prices for crops.
With about half of India's population dependent on agriculture and the majority of the country residing in rural areas, corporate heads say such steps will ultimately benefit other industries.
“The measures announced...to benefit the farmer community and boost the agriculture sector will be instrumental in maximising farmers’ incomes while reducing waste and inefficiencies that contribute to inflation,” said Albinder Dhindsa, the co-founder and chief executive of Grofers, a low-cost online supermarket in India.
“The growth focus around ease of living is laudable, and we are hopeful that this will anchor the future growth of the Indian economy.”
India's farming sector has struggled in recent years because of poor monsoon rainfall, which has led to weak crops.
In the longer term, boosting the rural economy will help generate greater consumer demand from those areas, thereby creating potential to cater to a larger number of customers, according to companies.
“The budget addresses rural and farm distress in a targeted manner by pinpointing root causes and providing solutions to the problems faced,” says Rajiv Shastri, the executive director and chief executive of Essel Mutual Funds.
Hanmantrao Gaikwad, the chairman and managing director of BVG Life Sciences said: “I see that the government is aiming to drive professionalism, standardisation, and specialisation in the agriculture sector. In the long run, this will strengthen the agriculture and allied sectors, and bring in more jobs into both rural and urban economies.”
But others point there is still work to be done before India reaps the rewards of the announcements made in the budget.
“An unbridled focus on agriculture coupled with enabling policies will go a long way in benefitting the larger farming community,” says Shilpa Divekar Nirula, the chief executive of Monsanto in the India region. “These initiatives if complemented with enabling policies would go a long way.”