Rural-themed budget underlines opportunities across agri-value chain
Assured remuneration through MSP is a key positive
Farmers to benefit from direct access to inter-linked agri-markets
Strengthening of infrastructure to support ease of living
Focus on affordable housing, road construction, water supply initiatives
JISL to see continued growth momentum into 2018-19
Consolidated order book of INR 40,253 Mn across hi–tech agri inputs, agroprocessing
and plastic divisions –strong execution translating into performance gains
Improving earnings profile and reduced borrowings footprint driving a healthier balance sheet
We believe this has been excellent budget for agriculture, water, renewable and food
processing sector. All these announcements will further aid already strong momentum company
is having across all business segments.
Few specific items worth Notings are as follows:
"MSP for the all unannounced crops of Kharif at least at one and half times of their production costs"
This will result in higher amount of funds in the hands of farmers which shall improve investment sentiment and encourage farmers to buy drip irrigation
system which can help them increase production and productivity.
Under Pradhan MantriKrishiSinchaiYojana (PMKSY) – Per Drop More Crop amount allocated has been increased from ’ 3000 crores to ’ 4000 crores, registering almost 33% additional funds. Subsidy to various states for Micro Irrigation Project is allocated under this head. This will be very helpful to increase retail Micro Irrigation business through various states. This is budgeted under Agriculture Ministry.
Under Ministry of Water resources, ’ 15,000 crores to complete 48 accelerated irrigation benefit program by December 2019. This will help company’s Micro Irrigation Project division as well as piping business.
Government had set up a Long Term Irrigation Funds (LTIF) in NABARD for irrigation works. Total corpus of und planned to be is ’ 40,000 crores. Government has announced that these funds not can be used to fund specified command area irrigation development project. This will help company’s micro irrigation project division by having access to integrated projects.
There in additional allocation of ’ 2,000 crores for micro irrigation under department of financial services.
Budget papers have clarified that ’ 5,000 crore micro irrigation fund through NABARD announced last year will be operationalised soon. this will help states to take larger targets for micro irrigation
Government intension to buy surplus solar power at reasonably remunerative rates will create strong demand for solar water pumps of our Company. This will act like a third crop (Solar Crop) for farmers and create assured monthly income.
There are other specific provisions for cluster development, operation Green and other initiatives which will especially give boost to food processing division. Increased custom duty on fruit juices will provide more protection to domestic industry.
Government has reiterated it’s support for Smart City and Amrut City projects. Under these program new tenders / works worth more than ’1,00,000 crores are expected next 2–3 years. Recently our company has been getting lot of such projects which will allow us to grow pipe business. We find that this budget talks about welcome fresh thinking on some long term structural pain points of agri sector. Proper implementation of these structural initiatives will make agriculture more remunerative for farmers and create significant opportunity for us to grow all our product lines.
Commenting on the developments Mr. Anil Jain – Vice Chairman & Managing
Director, Jain irrigation Systems Ltd., said:"With a clear motive to increase retained
earnings in the hands of the farmer the budget for 2018–19 has laid out the groundswork
for further structural initiatives to support agriculture as a whole. In my opinion signalling
a higher MSP and at the same time extending the benefit of MSP to all crops is a
standout move. Measures already at hand to facilitate adoption of micro–irrigation
solutions will further contain the farmers susceptibility to erratic monsoons.The
announcements have also focused on post–harvest value–addition through
augmentation of the food–processing infrastructure in a committed fashion.We see the
strengthening of mechanisms to facilitate direct linkages between the farmer and the
marketplace laying the foundation of a more equitable growth.Higher investments into
the rural economy to augment both physical and social infrastructure is destined to
create a more sustainable engine for the overall expansion of the national GDP."
About Jain Irrigation Systems Ltd:
Our Company, Jain Irrigation Systems Limited (JISL) with it’s motto ’Small Ideas, Big
Revolutions’ with more than 10,500+ associates worldwide and revenue of ˜USD 1
Billion, is an Indian multinational company with manufacturing plants in 30 locations
across the globe. JISL, its subsidiaries and associates are engaged in providing
solutions in agriculture, piping, infrastructure through manufacturing of Micro Irrigation
Systems, PVC Pipes, HDPE Pipes, Plastic Sheets, Agro Processed Products, Renewable Energy Solutions, Tissue Culture Plants, Financial Services and other
agricultural inputs since more than 34 years. It has pioneered a silent Productivity
Revolution with modern irrigation systems and innovative technologies in order to save
precious water and has helped to get significant increase in crop yields, especially for
more than 6 million small farmers. It has also ushered in new concept of large scale
Integrated Irrigation Projects (IIP). More Crop Per Drop™ is the company’s approach
to water security and food security. JISL is early pioneer for IOT in the agri–sector and is leading efforts to create global solutions with precision agriculture. It’s food brand
’Jain FarmFresh’ is well known all over the world for quality and consistency.All the
products and services of JISL help create a sustainable future while fulfilling its vision to
’Leave this world better than you found it’. JISL is listed in NSE–Mumbai at
JISLJALEQS and in BSE at code 500219.
This document may contain statements that could be construed as forward–looking.
Such forward–looking statements are subject to certain risks and uncertainties like
significant changes in economic environment in India and overseas, tax laws, import
duties, litigation, labour relations etc. Actual results might differ substantially from those
expressed or implied. Jain Irrigation Systems Ltd will not be in any way responsible for
any action taken based on such statements and discussions; and undertakes no
obligation to publicly update these forward–looking statements to reflect subsequent
events or circumstances.