High Level Group On Agricultural Exports

On 31^st July, 2020, the High Level Group (HLEG) on Agricultural Exports set up by the Fifteenth Finance Commission submitted its report to the Commission.
The HLEG was set up in February, 2020 under the Chairmanship of Sanjiv Puri (ITC Chairman) 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.

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

Crop Value Chains

It recommended a greater focus on 22 crop value chainswith a demand driven approach.
It has also suggested solving Value Chain Clusters (VCC) holistically with focus on value addition and performance-based incentives to the state governments for the period 2021-22 to 2025-26, to accelerate reforms in the agriculture sector.

State-led Export Plan

It 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.
These plans will be action-oriented, time-bound and outcome-focused.
For the success of the State-led Export Plan, the following factors need to be considered:
Plans should be collaboratively prepared with private sector players and Commodity Boards.
Leveraging of state plan guide and value chain deep dives.
Institutional governance should be promoted across state and centre.
Funding through convergence of existing schemes, Finance Commission allocation and private sector investment.

Centre should be an Enabler

As per the suggestions of the group, the Centre should enable state-led plans and institutional governance should be promoted across states and Centre.
Thus, robust institutional mechanisms need to be enforced to fund and support implementation.

Pivotal Role of Private Sector

The HELG pushed for private sector players to have a pivotal role in ensuring demand orientation, feasible project plans and in providing funds for technology, based on business case and for creating urgency and discipline for project implementation.

Finance Commission

Set up under Article 280 of the Constitution, its core responsibility is to evaluate the state of finances of the Union and State Governments, recommend the sharing of taxes between them, and lay down the principles determining the distribution of these taxes among States.
Under Article 281 of the Constitution, the President of India is required to cause laying of the Finance Commission report before each House of Parliament along with an explanatory note and the action taken by the government on the Commission’s recommendations.

15^th Finance Commission

It was constituted on 27^thNovember 2017 against the backdrop of the abolition of Planning Commission (as also of the distinction between Plan and non-Plan expenditure) and the introduction of the goods and services tax (GST), which has fundamentally redefined federal fiscal relations.
The Terms of Reference of the current Commission have some distinctive features, including recommending monitorable performance criteria for important national flagship programmes and examining the possibility of setting up a permanent non lapsable funding for India’s defence needs.
Its recommendations will cover a period of five years from April 2020 to March 2025.