Farmers Seek GST Exemption and MSP Reforms Ahead of Union Budget 2025-26

New Delhi, December 7 – The Bharatiya Kisan Union (apolitical) has submitted a series of demands to the Union Government ahead of the Union Budget 2025-26. During a pre-budget consultation meeting with Finance Minister Nirmala Sitharaman on Saturday, BKU’s national spokesperson Dharmendra Malik represented the farmers’ concerns and proposed several reforms to support the agricultural sector.

Exemption of GST on Farming Essentials

BKU emphasized the need to exclude agricultural equipment, animal and poultry feed, fertilizers, seeds, and medicines from the ambit of GST. The union argued that farmers were tax-exempt during the previous sales tax system in states and should remain so under GST.

MSP Reform Proposals

In their memorandum, BKU called for a comprehensive overhaul of the formula for setting the Minimum Support Price (MSP) for agricultural produce. They proposed that all possible risks, including post-harvest expenses (such as cleaning, grading, packaging, and transportation costs), risks of natural disasters, export bans, and government-led price falls, be factored into the MSP.

BKU also urged the government to prevent the import of agricultural products below the MSP and to impose Minimum Export Prices (MEP) only in emergency situations. Additionally, the union demanded that key fruits, vegetables, milk, and honey be brought under the MSP regime.

Enhancing Farmer Support

BKU suggested several measures to provide direct and indirect support to farmers:

• Increase the PM-Kisan installment amount from the current Rs 6,000 to Rs 12,000 annually.
• Under the Pradhan Mantri Fasal Bima Yojana, the insurance premium for small farmers should be made zero to enhance accessibility.
• Long-term agricultural loans and equipment loans should be provided at a 1% interest rate to farmers with a history of timely repayments.

Institutional and Structural Changes

The union recommended a significant constitutional reform by including agriculture in the concurrent list of the Seventh Schedule. They also proposed creating a central cadre of the Indian Agricultural Service, modeled after the Indian Administrative Service, to address the sector’s strategic needs.

Strengthening Market Infrastructure

To improve market access for farmers, BKU called for an increase in agricultural markets across the country. They also suggested that facilities for grading, packaging, and branding should be made available to farmers within these markets.

Acknowledgment and Gratitude

BKU expressed its gratitude to Finance Minister Nirmala Sitharaman for including farmers in the pre-budget consultation process. They highlighted the agricultural sector’s significant role in employment generation and the pressing need for targeted support to address long-standing neglect.

Pre-Budget Consultation Process

The meeting was part of the Finance Ministry’s annual exercise to gather inputs from various stakeholders, including farmer associations, agricultural economists, industry leaders, and state officials. The Budget for 2025-26 is scheduled to be tabled on February 1, 2025, marking Nirmala Sitharaman’s eighth Budget presentation.

The upcoming Budget is expected to include key announcements that will shape the Modi government’s economic roadmap during the remainder of its third term. Farmers, economists, and citizens alike are eagerly awaiting the government’s vision for the future of India’s agricultural sector.