Union Budget 2022-23: Key things to expect for Agri and allied sectors

1 Feb 2022 , 09:29 AM

Agriculture and allied, fertilisers and sugar stocks will be in focus during the Union Budget 2022-23 announcement. The Finance Minister Nirmala Sitharaman is set to announce the country's Union Budget today.

To drive the economy, the FM in November 2020 had announced an additional provision of Rs 65,000 crore to be disbursed as the fertiliser subsidy as part of the stimulus package (Atmanirbhar Scheme). This provided much-needed support to the fertilisers industry in lowering the subsidy receivables and leverage levels to a large extent.

CARE Ratings in its Union Budget 2023 expectations report said " However, what followed was a massive spurt in prices input commodities. Phosphoric acid and ammonia saw a strong uptick in rates even as natural gas prices for fertiliser companies rose the most."

For fertilisers, CARE 's report said that the industry expects a higher allocation of subsidies towards urea as well as non-urea fertilisers in the upcoming Budget FY23,

Meanwhile, for the sugar industry, the government took several favourable policy measures for the sector such as the advancement of ethanol blending target of 20% to 2025 from 2030, a clear roadmap involving various stakeholders for the rollout of E20, and a further hike in ethanol prices.

CARE for the sugar industry said that "no major announcements are expected other than the fact that the government may continue to make allocations towards schemes for the development of the industry as the problem of sugarcane arrears remains."

"With the government aiming to increase the diversion of sugarcane towards ethanol and fix ethanol supply targets, policy measures and incentives to promote biofuel and flex-fuel vehicles that aim to support ethanol blending are likely," CARE said.