Enhancements in GST Policies Set to Boost Income for Rural Communities as Per Report by NABARD Chief
In a recent statement to IANS, NABARD Chairman Shaji KV highlighted the positive impact of the Indian government's revamped goods and services tax (GST) structure on rural India.
According to KV, the GST reform will put more money in the hands of rural people, as operational costs of farm machinery are expected to decrease. The cost of most farm equipment, including tractors, is expected to fall under the 5% slab, making them more affordable for farmers. Some farm equipment may remain tax-free under the new structure.
KV also noted that rural prosperity is increasing and there is more formalisation in accessing credit. The recent NABARD rural sentiment survey indicates cost reduction in terms of accessing credit. However, KV did not mention any specific new facts about cost reduction in terms of accessing credit or the benign inflation sentiment.
The NABARD Chairman also emphasised that the government's move will strengthen the manufacturing sector, particularly the agricultural machinery sector. With the new GST reforms, the cost of agricultural machinery is expected to decrease, which will benefit a major Indian agricultural equipment firm headquartered in India. Although the exact manufacturer was not explicitly named in the search results, it is likely the leading agricultural machinery manufacturer benefiting from GST reforms.
KV stated that the rural income demand is increasing, which will give rise to more production. He also noted that the government's GST rate cuts are playing out well in rural areas. The positive growth trajectory, coupled with a good monsoon, has resulted in an 8% increase in the cropped area.
Finally, KV pointed out that they are now focusing on building capacities to catch up to international productivity levels. The revamped GST structure, along with other government initiatives, is expected to boost future production in the agricultural sector.
