COVID-19 economic package: Industry experts give mixed reactions, highlight limitations

Agriculture experts and organisations gave a mixed reaction to the government's economic package announced on Thursday to help farmers ensure unhindered farm activities during this ongoing COVID-19 crisis. "Except for extension of moratorium in repayment of crop loan and providing Kisan Credit Card (KCC) to more farmers, there was no big economic package announced for the farming community," Bharatiya Kisan Union (BKU) spokesperson Dharmendra Malik said in a statement.

" The measures will not help farmers become self-reliant "instead will force them to commit suicide.They feel cheated by the government," he added.

"The agriculture value chain needs special focus and this along with the farm mechanisation industry should certainly be considered as essential service in the country,"

Tractor and Mechanization Association President T R Kesavan said. Agriculture is critical to a large and populous nation like India and self-reliance (atmanirbhar) is key for food security, he said adding that technology and farm mechanisation is key to achieve this, while expecting more measures from the government in future. However, other industry chambers and organisations FICCI, PwC India and Council on Energy, Environment and Water (CEEW) hailed the decisions saying it would provide big support to the farmers.

"The initiative to boost credit of 2 lakh crore to increase coverage of 2.5 lakh farmers under KCC will surely increase the credit umbrella and help increase their liquidity issue given the acute cash crunch during covid situation," PwC India's Ajay Kakra said.

"It's encouraging to see additional liquidity support to farmers in distressing times," CEEW's Senior Programme Lead Abhishek Jain said.

"We hope that the government has planned for the implementation of these schemes well in conjunction with the state governments who will have a major role to play here," FICCI President Sangita Reddy added. HDFC Securities MD & CEO Dhiraj Relli said again the focus has been more on providing concessional credit and liquidity support rather than direct fiscal transfer except for interest subvention and free food.

The measures are welcome from human suffering alleviation perspective and the modus operandi could relieve the feared pressure on the fiscal situation. However this may not result in direct and immediate boost to demand and hence the economic revival could take some time, he noted. According to him, although proliferation of schemes could have been avoided. Deepthi Mathew, economist at Geojit Financial Services, said what was needed was direct cash transfer which would have supported the low-income earners and farmers as they are the worst hit in the current situation.

She also said that like the previous announcements today's are also focused on providing credit support, mainly by way of extension of the existing programmes. Ashish Vaid, President of Indian Merchants Chamber (IMC), said the help for three crore small and marginal farmers in their post-Rabi and pre-Kharif season through enhanced working capital loans through NABARD is welcome. However, Wilfred Sigler of CRIF HighMark, the country's first microfinance-focused credit bureau, said the support to the farmers by way of Rs 2 lakh crore of concessional credit through Kisan credit cards will empower and boost rural economy.

Tech-based agri marketplace AgriBazaar co-founder Amith Agarwal said the government has rightfully identified the agricultural sector as one of most impacted and the Rs 2 lakh crore loan to the farmers is a big relief to them. EY India Partner Satyam Shivam Sundaram said that the concessional farm loans through KCC are a "big step" towards institutional credit to the marginal and small farmers, who have hitherto mostly been availing credit from the informal sector at a very high rate.

Furthermore, along with the e-National Agriculture Market (e-NAM), these initiatives would also facilitate farmers' adoption of market transactions for inputs, farm mechanisation, and sale of produce, thereby, ensuring a higher share of income for the farmers, he said. Toyota Kirloskar Motor (TKM) said the second tranche of the stimulus package will help in reviving the agriculture sector at the grass-roots level besides playing an instrumental role in reviving demand and opening new avenues for other industries.

"The schemes introduced for the farmers as part of the 'Atmanirbhar Bharat Abhiyan', will definitely help in reviving agricultural sector at a grass-root level. COVID-19 has clearly derailed livelihoods of many people, these schemes will gradually help in ameliorating the disruptions caused in the lives of common people," said Naveen Soni, Senior Vice President, Sales and Services, Toyota Kirloskar Motor.