Indian Farmers Face Double Blow of Heat Stress and High Tax Rates
Indian farmers face a double blow from heat stress and high tax rates. While global warming cuts into their working hours, crucial farm equipment and tools remain heavily taxed, unlike in other countries. Over 84% of Indian farmers are small and marginal, with landholdings under two hectares. They struggle with rising production costs, up 12-15% annually, while incomes grow at a mere 2-3%. The recent 'GST Festival of Savings' overlooked the farm sector, leaving essential items like water pumps, rice mills, and power tools at high tax rates. Globally, agriculture is considered essential, with farm tools taxed at lower rates or exempted. India, however, treats small-scale mechanization as a taxable commodity, hindering small farmers' access to vital tools. A German government proposal even called for full exemption of agricultural equipment from VAT. In India, the average farming household earns Rs 10,218 per month, spending Rs 9,940, with a meagre savings of Rs 278. Dealers face losses of 13% on goods purchased at the old 18% GST rate, passing the burden to farmers. Heat stress and high GST rates on farm equipment squeeze Indian farmers' already thin margins. Urgent tax reforms are needed to support small farmers and boost their productivity.
