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Focus: GS-III Indian Economy

Why in news?

The High-Level Group (HLEG) on Agricultural Exports set up by the Fifteenth Finance Commission to recommend measurable performance incentives for States to encourage agricultural exports and to promote crops to enable high import substitution, has submitted its report to the Commission.

Highlights of the recommendations

After intensive research and consultations and taking inputs from stakeholders and the private sector through intensive consultations, the HLEG has made its recommendations, major among which are:

  1. Focus on 22 crop value chains – demand driven approach.
  2. Solve Value Chain Clusters (VCC) holistically with focus on value   addition.
  3. Create State led export plan with participation from stakeholders.
  4. Private Sector should play an anchor role.
  5. Centre should be an enabler.
  6. Robust institutional mechanism to fund and support implementation.

The Group in its report has recommended a State-led Export Plan – 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.

The Group has also said that for the success of the State led Export Plan, the following factors needed to be considered: –

  1. Plans should be collaboratively prepared with private sector players and Commodity Boards.
  2. Leveraging of state plan guide and value chain deep dives.
  3. Private sector should play an anchor role in driving outcomes and execution.
  4. Centre should enable state-led plans.
  5. Institutional governance should be promoted across state and centre.
  6. Funding through convergence of existing schemes, Finance Commission allocation and private sector investment.

Views of HELG

  1. India’s agricultural export has the potential to grow from USD 40 billion to USD 70 billion in a few years.
  2. The estimated investment in agricultural export could be in the tune to USD  8-10 billion across inputs, infrastructure, processing and demand enablers.
  3. Additional exports are likely to create an estimated 7-10 million jobs.
  4. It will lead to higher farm productivity and farmer income.
December 2023