The Hindu Business Line : Farm sector needs comprehensive package for dynamic growth

The growth of the agriculture sector has been constant over many years at 2.5 per cent to infuse dynamism into the sector, the Government should introduce a comprehensive package that covers irrigation, farm input usage, viability of industrial units involved in farm input supply and other services.

The Government should protect the domestic industry against vagaries of imports while ensuring that the country’s food security remains uncompromised and the dependency on imports is reduced.

Automobiles (two-wheelers and cycles): India has the potential to become an export hub for bicycles.

Fiscal supports such as export subsidies, excise duty exemption for steel inputs, as well as service tax exemptions will help reduce costs and boost sales of bicycles. Key recommendations are:

• To initiate environmental-friendly projects such as creation of bicycle lanes to reduce pollution and traffic

• Incentives for investment in electric bike projects to save oil imports.

The Government should provide full exemption from excise duty for specified parts in the making of e-bikes and impose uniform VAT at 4 per cent for e-bikes across India to ensure product affordability.

• Special 2 per cent interest rebate for the auto component sector and an anti-dumping duty on Chinese steel can boost the performance of the sector.

Financial sector (insurance and NBFCs): The Government should extend the scope of tax exemption to all sectors including vehicle insurance and help the insurance industry penetrate the market with a variety of products to meet the needs of all sections.

The insurance industry needs various reforms, especially vis-À-vis motor vehicle insurance, and renewal should be made mandatory for both third party liabilities and damages.

The Government should also make amendments to the SAFRESI Act to include NBFCs so that this sector can take use of securitisation and asset re-construction.

Food industry (sugar): International crude prices have again reached $70/ barrel which indicates a greater probability of sugar manufacturers of Brazil choosing to produce fuel ethanol over sugar, creating an international shortage of the commodity.

Sugar being a common man’s commodity, it is important to ensure that the supply side restriction does not lead to domestic shortage.

The Government should provide subsidised natural gas to sugar refineries and introduce fiscal benefits for new technology investments and working capital requirements.

This will guarantee reasonable availability of stocks at all times for the domestic market.

Vellayan,

Vice-Chairman and

Director – Strategy, Murugappa

Corporate Board