GST Rate Cuts Set to Boost India’s Agriculture and Dairy Sectors
The recent GST rate cuts on agricultural inputs, dairy products, and food processing equipment are a major win for over 10 crore farmers and the cooperative sector, according to the Ministry of Cooperation.
Key Benefits for Farmers:
- Dairy Farmers: The exemption of GST on milk and paneer, along with reduced rates on processing equipment, will directly improve profit margins for individual farmers and dairy cooperatives. This is expected to be a significant boost for major brands like Amul.
- Affordable Inputs: The GST restructuring corrects the inverted duty structure in fertilizer manufacturing, preventing price hikes and ensuring farmers have timely access to essential inputs.
- Cheaper Machinery: Reduced GST on tractors and their components will especially benefit small farmers who rely on this equipment for fodder cultivation and transporting farm produce.
- Sustainable Farming: By making bio-pesticides more affordable than chemical alternatives, the government’s move supports its natural farming mission and encourages more sustainable practices.
Economic Impact:
These targeted reforms are designed to stimulate demand in rural and semi-urban areas, lower household expenses on essential food items, and strengthen the food processing sector. By cutting logistics costs, the government also aims to boost the competitiveness of agricultural exports. This comprehensive package of GST cuts is one of the most significant sectoral reforms for the agricultural and cooperative ecosystem, promising cascading benefits for rural entrepreneurship and national food security.