The Indian economy is significantly impacted by the dairy and livestock sector, contributing 5% to the national economy while providing employment to 80 million dairy farmers. The Union Budget 2022-23 is anticipated to positively impact this sector through numerous initiatives aimed at boosting sustainability, particularly in light of the ongoing Covid-19 pandemic.
Current State of Dairy and Livestock Sector
Dairy is India’s single-most significant agri-commodity. Economic revival, rising per capita consumption of milk and milk products, dietary changes, and increased urbanisation have fuelled the growth of the dairy industry by 9-11% in 2021-22. Furthermore, the livestock sector has registered a Compound Annual Growth Rate (CAGR) of 8.15% over the previous five years ending in 2020. Liquid milk, which accounts for over half of the dairy industry’s contribution, is expected to maintain stable growth, and the organised dairy sector has seen more rapid growth compared to the unorganised segment.
Budgetary Initiatives for Sector Growth
The government’s ‘Vibrant Villages Programme’ targets border villages in northern India with low population densities and limited connectivity. The programme looks to enhance infrastructure and provide better market access to the many livestock farmers concentrated in these rural areas. Additionally, the government has proposed to reduce Alternate Minimum Tax from 18.5% to 15%, and lower the surcharge on cooperative societies from 12% to 7%. These measures are expected to augment income for cooperative societies and their members, who predominantly hail from rural areas and farming communities.
Allocations to Central Sector Schemes
Funding for the Rashtriya Gokul Mission and National Programme for Dairy Development has been increased by 20% in the budget for 2022-23. This enhancement is predicted to increase the productivity of indigenous cattle as well as improve milk quality. The livestock sector has received a funding increase of over 40% for 2022-23, with central sector schemes receiving a boost of more than 48%.
Health and Disease control in Livestock
The budget for livestock health and disease control has been enhanced by almost 60% for 2022-23 compared to last fiscal year. This increased allocation is aimed at ensuring healthier livestock across the nation.
Digital Banking Incentives
Incentives for digital banking, payments, and fintech innovations are expected to introduce greater transparency in the livestock sector, particularly in milk procurement. The government plans to introduce a completely paperless, e-bill system for procurement, streamlining the process further.
Challenges to the Dairy and Livestock Sector
Several issues continue to plague the dairy and livestock sector. These include the threat posed by dairy analogues, plant-based products, adulteration, inadequate fodder resources, ineffective control of animal diseases, lack of conservation strategies for indigenous breeds, absence of quality services and skills for improving productivity, and inadequate infrastructure support.
Schemes for the Dairy and Livestock Sector
Several schemes have been introduced to support the sector. These include the Animal Husbandry Infrastructure Development Fund (AHIDF), National Animal Disease Control Programme, Rashtriya Gokul Mission, National Artificial Insemination Programme, and National Livestock Mission.
A Way Forward
Productivity can be increased by better health care provision, improved breeding facilities, and effective management of dairy animals. This could potentially lower the cost of milk production. Creating awareness about clean milk production and various schemes introduced by the Department of Animal Husbandry and Dairying, along with the new Ministry of Cooperatives, can help dairy farmers adapt and evolve for the future.
