Union Budget 2020: Accommodating cold storage challenges

Finance Minister Nirmala Sitharaman today presented her second Union Budget under the Modi government. With the present critical economic scenario taking the nation through rough and tricky blocks, the announcement may give some respite to the incessant storage, farm produce, and transportation concerns among others that has been taking a tow on cold storage and F&B sector.

The 2.5 hours of budget speech clearly catered to the demand side of the economy by trying to put more money in the hands of individuals, falling under three categories — aspiring India, economic development, and caring society.

Looking at the trending and impending issues like demand for sustainable transportation for farm produce, and cold chain facilities for perishable food products, we can witness the government has accommodated funds and policies to address these challenges. An under-developed food processing value chain is another issue that needs to resolved, and we need to have required technology and storage upgradation in the existing cold storage plant and machineries been an urgent need to upgrade existing cold storage plant and machinery and technology.

• India has an estimated capacity of 162 million metric tons of cold storage, reefer van facilities and so on. NABARD will undertake an exercise to map and geo-tag them,” she said during the speech.
• Shares of logistic companies surged after the Finance Minister Nirmala Sitharaman on Saturday proposed to build a seamless national cold storage chain.
• Announced an estimated investment of ₹21,000 Crores for upgrading cold storage to address the stock piling concerns for perishable commodities.
• Announced of launching KRISHI UDAAN YOJANA for safe transit of perishable goods for both National and International routes.
• ₹4,400 crores allocation for Clean Air, further harness the environment.
• National Logistics Policy will soon come into existence further leveraging the single window e-logistics market.
• Setting-up Kisan Rail for quick transportation of Farm produced goods across the country.
• Village Store scheme: To be run by SHGs providing holding capacity to farmers further reducing their logistics cost
• Government will provide viability gap funding for warehousing.
• FM says Govt will stick to commitments of Paris Climate Accord.
• There are thermal power plants which are old, carbon emissions are high, advised to close those, which have emissions over permissible norms, says Sitharaman.

Live Stock:
• Doubling milk processing capacity from 53.5 million MT to 108 million MT by 2025.
• Artificial insemination to be revised from existing 30 percent to 70 percent

Water Management:
• Committed to OD-plus in order to sustain ODF Behaviour
• Emphasising on liquid and grey water management
• Focus on Solid waste collection, source segregation and processing.

The industry leaders see this budget as a hope to aid the sleeping and covered issues being faced by the industry. Mr. Prakasan, COO, Sterling & Wilson, MEP Business says “The Big Infrastructure push in the union budget 2020 is a big step towards boosting the economy and the sector. Government announced a huge spend over 102 trillion rupees ($1.44 trillion) on roads, ports, airports, irrigation and other infrastructure, over the next five years. This is definitely a demand revival step and will create an environment for sustainable growth. This budget is a big growth driver and proposes to step up the construction and MEP industry sectors in the country. I am definitely positive that this budget is going to work for the MEP sector”.

Purushothaman, President, Danfoss India said “The budget restores our confidence for agriculture and allied industries to increase their contribution to GDP in coming days. With the expansion of NABARD refinance scheme and extension of Agri-credit to ₹15 lakh crores, there definitely is a greater scope to address the industry’s challenges at a grass-root level. The ability of states to fuel infrastructure support in tandem with the push for increased cold chain infrastructure for agriculture, horticulture, dairy and fisheries will be key to tackling the food loss in our country.

With efficient implementation, the Kisan Rail and Krishi Udaan schemes will be helpful in buckling down the overall cost within the farm-to-fork process, thereby driving profitability for farmers and reducing prices for consumers. Additionally, the vision to double our milk capacity to 108 MT tonnes by 2025 and raise fish production to ₹2 lakh tonnes through FFPOs will help in building a new ecosystem of start-ups across the agriculture and allied sectors and thereby help create newer job opportunities in the nation. Overall, the budget this year certainly brings in exciting times ahead as we look forward to great advancements in our rejuvenated ecosystem.

Ranganath N. K, Area Managing Director, INDO Region, Grundfos, “We welcome this year’s budget which sharply focuses on issues that propels the growth of aspirational India. Addressing the challenges of severe water stress in the nation as one of its top most agenda, this budget gets to the bottom of things by proposing comprehensive measures for 100 water-stressed areas. Given that the budget also aims to empower famers by increasing their dependence on off-grid solutions with solarised grid-connected pumps through the PM Kusum Scheme, I think that this will act as a catalyst to sustainable irrigation solutions across the country. This abundant allocation in agriculture is likely to positively rural development. We are greatly excited to see the budget allocation for Jal Jeevan Mission. Also the foreseen investment in the renewable energy sector will enable the government to achieve its national action plan on climate change.”