Farm infra given boost: Sanjay Kaul

"The Finance Minster has recognised that a major cause for food inflation has been due to supply side constraints, exacerbated by huge gaps in post harvest storage infrastructure for agricultural produce, especially for fruits and vegetables," observed Sanjay Kaul, MD &CEO, National Collateral Management Services Ltd (NCMSL).

He expressed happiness at the fact that Finance Minister took heed of the industry's fervent pleas and granted "infrastructure status" to all post harvest infrastructure, including cold storages. Hitherto, only port handling facilities of agri produce had been declared as “infrastructure”.
 
He did some number crunching on the occasion: "There is an estimated 32 million shortage in storage capacity, and even conservative estimates put the immediate investment requirement at Rs 10,000 crore. The grant of infrastructure status to this sector will provide a major fillip for investment in this vital sector.
 
Kaul also said that the Finance Minister’s announcement that modern storage infrastructure, such as silos would be eligible for “viability gap” funding is also a good initiative to encourage modern storage practices. He termed the decision to reduce customs duty to 2.5% on the import of all cold storage equipment as a "complete package of relief" to the sector.
 
He hailed the announcement to pilot test cash transfers in place of grant of subsidies for kerosene and fertilisers as "another excellent initiative" but found it underwhelming that the initiative hasn't been extended to food subsidies.