Farmers Demand GST Exemption on Agricultural Inputs at Pre-Budget Consultation
A delegation of farmers met with Union Finance Minister Nirmala Sitharaman during a pre-budget consultation last week to voice their demands, including the removal of GST on agricultural inputs such as seeds, manure, and pesticides. This meeting comes as part of the finance ministry’s efforts to gather feedback for the upcoming Union Budget 2025-26.
Key Demands Raised by Farmers:
- Scrapping GST on Agricultural Inputs:
Farmers argued that the Goods and Services Tax (GST) on essential inputs for agriculture increases the cost of cultivation significantly.
Current Situation: GST is levied on several inputs, including seeds and pesticides.
Farmers’ View: They unanimously demanded its removal to ease the financial burden and boost agricultural productivity.
- Revision of MSP Calculation Formula:
The delegation urged the government to calculate the Minimum Support Price (MSP) using the broader C2 cost formula, which factors in:
All farming expenses,
Family labor, and
Imputed costs of land and machinery.
This would replace the existing A2 + FL formula, which is narrower and excludes many hidden costs.
- Enhanced Cash Benefits Under PM-KISAN:
Farmers requested the increase of PM-KISAN benefits from ₹6,000 annually to ₹10,000-₹12,000 to counter inflation.
Current Scheme: ₹6,000 is provided annually in three equal installments.
Proposed Revision: Farmers believe higher payouts are essential to support their livelihoods amid rising costs.
- Prohibition of Imports Below Federally Fixed Prices:
To protect farmers from unfair competition, the Bharatiya Kisan Union (BKU) demanded a ban on imports priced below the government-fixed floor price. - Guarantee for Minimum Support Prices:
Many farmers reiterated their long-standing demand for a legal guarantee on MSP, with ongoing protests near Delhi highlighting the urgency of this issue.
Finance Minister’s Response:
Acknowledgment of Concerns: Sitharaman assured the delegation that the government will evaluate their demands, especially the removal of GST on agricultural inputs.
Reassurance: The minister emphasized the government’s commitment to improving farmers’ productivity and resilience, citing various farmer-friendly policies already in place.
Conclusion:
The consultation highlighted critical challenges faced by the agricultural sector, which employs nearly half of India’s population. As the Union Budget 2025-26 approaches, these demands could influence the government’s policies to reduce cultivation costs, enhance income support, and secure MSP guarantees for farmers. Whether the GST on agricultural inputs will be waived remains a key issue to watch.
