ValueFin – Manoj Rawat: Budget 2019 Expectations
One of the most important focus area for this Budget 2019 is to empower NITI Aayog & STARTUP India initiative to create a highly focused group that offers time bound implementable solutions on doubling the income of farmers, accelerate credit flow in agriculture and enable real ground level innovations that are impactful & scalable, says Manoj Rawat, MD & CEO, ValueFin India Credit.
The Union Budget 2019 should create a long term enabling atmosphere for supporting new and early stage rural focused Financial Services Institutions, financial start-ups working in agriculture, MSME and rural sector. They should be supported by introducing “suitable incentives” like allowing interest subvention of 4% on credit availed, similar to that given to banks, refinance facilities at 6-7% interest rate from Developmental Financial Institutions (DFIs) like NABARD, MUDRA Bank and SIDBI and incentivise
agriculture innovation focussed impact funds including Alternative investment funds (AIFs), Venture Capital, Private Equity funds by a relaxing tax criteria to 2.5% to 4%. This may help spur innovation in this sector and accelerate growth agriculture and allied sector.
Another point which DFIs needs to review is seeking minimum vintage criteria like 3 or 5 years of operations for availing credit line, which leaves out most of the new and innovative financial services start-ups.
NITI Aayog along with Start-up India Initiative needs to collaborate to come up with precise steps for a timeline bound implementation program that will result in the four critical outcomes namely;
• Enable timely access of agriculture credit to each farmer & Agriculture enterprise in value chain.
• Help farmers get the rightful prices for produce by accelerating implementation of Electronic National Agriculture Market project (e-NAM)
• Promoting serial innovations in agriculture & rural financial sector which otherwise seem to have missed the benefits of current FinTech revolution across India.
• NITI Aayog may also consider constituting a focused group of experts and professionals to address the aforesaid aspects but also to review & realign the Priority Sector Lending program, the largest directed credit delivery program (which USD 350 bn annually), where Agriculture credit is one the most critical component.