With the announcement of the interim budget for 2024 around the corner, industry and agricultural sector players expect a boost in the agri-entrepreneurship segment. Each sector has special requirements that need to be fulfilled and the organic food and FMCG sector requires attention at some points. The organic food sector is on the verge of a major breakout and a lot of key industrial players are bullish on it. This is the perfect time for the government to extend benefits to the sector that can be passed on to every contributor to the sector. Besides industrial and corporate incentives, there is also a special need to incentivise the small farmers who have a major role to play in the development of the sector. The general elections are expected to be declared anytime now and it is a major factor that would influence declarations and announcements made during the budget session. To boost rural employment, however, the government is expected to announce sops and benefits, targeting the agricultural sector. How would the 2024 budget impact agri-entrepreneurship and the FMCG sector on the whole, let’s take a look.
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Urban Development Outpaces Rural
The development in the urban parts of the country continues to be far ahead of that of its rural counterpart. Governments, both at the centre and the state have an unavoidable challenge to accommodate the huge chunk of urban population with the resources. To fulfil the needs of the larger chunk of the population in cities and towns, certain aspects of the rural sections take a back seat. However, the government has time and again shown its intention to promote an all-inclusive fiscal policy that impacts even the remotest parts of the country. Agricultural incentives and benefits passed on to the rural population also impact the functioning of the FMCG sector. The central government has been promoting the start-up culture in the country ever since. Several new businesses have been started and doing well in the rural parts of the country, which promote organic foods and other agricultural products. It is the right time to provide such businesses with a much-needed boost. It would not only be a fuel that propels the rural economy forward but would also have a lasting impact on the nation’s progress.
Agri-Entrepreneurship, a Saga Of Many Unsung Heroes
The agri-entrepreneurship sector of the country is one of the most unorganised yet prospering parts of the Indian economy. Almost every member of the rural community contributes to this sector, directly or indirectly, however, the benefits are not shared proportionately. From financing to distribution, every aspect related to the sector is somewhat self-dependent. Food and grain procurement is largely managed by the central and state governments and cooperative banks provide the much-needed finance to run the majority of activities. However, there is a need to look deeper into the rural economic setup. Consumers in the cities and metros have developed a preference for herbal, organic, chemical-free, pesticide-free, natural and unadulterated agri-products. This preference is not only restricted to the food category, but other FMCG products like natural and herbal toiletries are high in demand. Small players and individual entrepreneurs are major contributors to this segment and there is a need to organise this sector that holds great potential. A large number of agri-entrepreneurs work through the unorganized paraphernalia and yet sustain. The 2024 budget is expected to address the demands and needs of this economic segment and provide a much-needed boost.
Rural Focus of FMCG Players
The rural population contributes to about 40% of the total FMCG consumers in the country. This figure is motivating some of the major players in the sector to look towards the villages and small towns for deeper market penetration. Also, expansion into the rural parts of the country would help in more efficient sourcing of the agri-products and eventually boost the organic product segment. The 2024 budget is expected to play a major role in streamlining the rural paraphernalia which would allow more FMCG players, both big and small to expand. This would not only benefit the FMCG companies but also the agri-entrepreneurs, organic farmers, small dairy owners and farmers with small land holdings.
The budget would not only impact the overall economy but would also define the way forward for agri-based businesses, enterprises and individuals.