GST rate cuts to benefit farmers: Sitharaman

New Delhi: Finance minister Nirmala Sitharaman on Wednesday said the goods and service tax (GST) reforms, implemented last month, will benefit farmers and that the government was committed to the welfare and empowerment of the agrarian community.

“The reduction in GST on bio-pesticides and micronutrients will bring direct benefits to our farmers and empower them,” Sitharaman said, referring to the reduction in rates made effective from 22 September.

Speaking at an event at Koppal in Karnataka, the minister said Prime Minister Narendra Modi was keen to make GST simpler and more beneficial for the people. “Accordingly, we implemented the next generation GST from the very first day of Navratri. GST rates on several items have been reduced, including agricultural products such as tractors, solar-powered equipment, and other machinery used by our annadatas,” the minister said.

The GST Council lowered the tax rate on several agricultural goods, including tractors, machinery for soil preparation or cultivation, harvesting or threshing machinery, grass or hay mowers, and composting machines, from 12% to 5%. Agricultural diesel engine of cylinder capacity exceeding 250 cc for tractor was lowered from 18% to 5%.

Tax on agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery and poultry incubators was lowered from 12% to 5%.

The finance minister also said that under a scheme called PM-FME meant for formalisation of small food processing businesses, loans worth more than ₹11,000 crore have been sanctioned to individual micro food processing units and collectives nationwide.

Over one lakh entrepreneurs have also received training under the PM-FME scheme, enhancing their skills and empowering them to grow their businesses, Sitharaman said.

The scheme was rolled out in 2020 and since then, the Centre has released over ₹3,700 crore to states and union territories for implementing various components of the scheme, the minister said.

Sitharaman also inaugurated a Farmers’ Training cum Common Facility Centre for Agro Processing in Koppal district and flagged off the first consignment of products from there.