Context: The High Level Group (HLEG) on Agricultural Exports set up by the Fifteenth Finance Commission has submitted its report.
The Terms of Reference of the HLEG: The HLEG was set up to recommend measurable performance incentives for states to encourage agricultural exports and to promote crops to enable high import substitution.
- To assess export & import substitution opportunities for Indian agricultural products in the changing international trade scenario.
- To recommend strategies and measures to increase farm productivity, enable higher value addition, ensure waste reduction, strengthen logistics infrastructure etc.
- To identify the impediments for private sector investments along the agricultural value chain and suggest policy measures and reforms.
- To suggest appropriate performance-based incentives to the state governments for the period 2021-22 to 2025-26, to accelerate reforms in the agriculture sector.
- Demand driven approach: Focus on 22 crop value chains.
- Focus on value addition: Solve Value Chain Clusters (VCC) holistically.
- Create a State led export plan: With participation from stakeholders.
- Role of Private Sector: Should play an anchor role.
- Role of Centre: Should be an enabler.
- Robust institutional mechanism: To fund and support implementation.
A State-led Export Plan:
- Proposed in the report is a business plan for a crop value chain cluster, that will lay out the opportunity, initiatives and investment required to meet the desired value chain export aspiration.
- These plans will be action-oriented, time-bound and outcome-focused.
- The success of the State led Export Plan will depend on the following factors-
- Plans should be collaboratively prepared with private sector players and Commodity Boards.
- Institutional governance should be promoted across state and centre.
- Funding through convergence of existing schemes, Finance Commission allocation and private sector investment.
Private sector to play a pivotal role:
- In ensuring demand orientation and focus on value addition;
- Ensuring project plans are feasible, robust, implementable and appropriately funded;
- Providing funds for technology based on business cases and for creating urgency and discipline for project implementation.
Potential of India’s agricultural export:
- To grow from USD 40 billion to USD 70 billion in a few years.
- Estimated investment in agricultural export could be USD 8-10 billion across inputs, infrastructure, processing and demand enablers.
- Job creation: Additional exports are likely to create an estimated 7-10 million jobs.
- Higher farm productivity: It will lead to higher farm productivity and farmer income.
15th Finance Commission:
- The Fifteenth Finance Commission was constituted on 27 November 2017, under the chairman NK Singh.
- The Term of Reference of 15th FC:
- The demand on the resources of the Central Government particularly on account of defence, internal security, infrastructure, railways, climate change, etc.
- The demand on the resources of the State Governments, particularly on account of financing socioeconomic development and critical infrastructure, etc.
- The impact of the GST, including payment of compensation for possible loss of revenues for 5 years, and abolition of a number of cesses ,etc.
- New dynamic: The reorganisation of the State of Jammu and Kashmir into two Union Territories - one of Jammu and Kashmir and one of Ladakh - presents a new dynamic.
- Formula that decides a State’s share
Weight in 15th FC
Weight in 14th FC
(17.5 - 1972, 10 - 2011 Census)
Forest and Ecology