The measures in the Union budget would help the agriculture and life sciences sectors by providing support at several points. According to Rana Kapoor, CEO and managing director of Rabo Bank, sectors like tea would benefit from abolition of excise duty and the Rs 1 cess to be used for a separate fund for development, modernisation and rehabilitation of the sector along with the price stabilisation fund for tea, coffee and rubber sectors.
At the same time, agricultural and dairy products have been protected by not reducing peak customs rates as high level of subsidy support was enjoyed by the products in many developed countries. Simultaneously, the boost to infrastructure through funds set aside for rural roads, sanction of 2 private airports and modernisation of sea ports of JNPT, Navi Mumbai and Cochin etc. will have positive spin- offs on the entire agricultural sector and ease exports and trade.
In fertilisers, the urea price hike by a percentage higher than that of DAP will go towards correcting the NPK imbalance in fertislier use. In other words, urea use will come down and that of other types of fertiliser go up.
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In the related field of life sciences, the provisions for faster depreciation, exemption from CVD (countervailing duty), and exemptions from excise on the life saving equipment would provide the stimulus for longer investments in the high-end medical facilities.
The increased incentives offered for clinical trials, biotechnology and pharmaceutical companies will see increase in fund allocation by pharmaceutical companies towards R&D.
This would aid the emergence of India as the hub for bio-tech research and applications.
The budget focuses infrastructure creation through government private partnership. Kapoor said Rabo could play a major role in formation of public private partnerships for infrastructure creation owing to its co-operative origins.