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FARMERS FEELING CHEATED BY THE GOVT’S POLICIES

Focus: GS-III Indian Economy

Four specific points – Gap between Policy and Impact on the rural economy

I- Diesel Tax, and others

  • Under PM Kisan, each landowning farmer (landless are excluded) receives Rs 6,000 annually. A farmer growing a combination of paddy and wheat utilises about 50 litres of diesel per acre.
  • As of September 2020, each litre of diesel gets taxed at about Rs 45.
  • Additionally, farmers are paying GST on purchase of inputs like seeds, pesticides, fertilisers, tractors and implements and such others for which, unlike industry, they cannot claim input credit.

II- LPG Cost

  • Even though oil prices have reduced from $60/barrel to $40 after the Covid pandemic, the price of a subsidised gas cylinder to the underprivileged in the villages under the Ujwala scheme went up.

III- MSP

  • Earlier in 2020 amid the COVID clampdown, the MSP for paddy was increased by 2.9 per cent.
  • But even the food inflation in cereals for 2019 was 8.4 per cent.
  • It means, in real terms, the MSP for paddy will decrease by the time of marketing in October.

IV- Policies from other ministries

  • One can find policies continuing during COVID times emanating in ministries other than agriculture which impact the food value chain and are counterproductive and conflicting.
  • For example, 75 per cent of the dal consumed in India is channa and arhar. While both are selling below MSP, import duties on masoor dal were reduced by two-thirds to 10 per cent because there was a demand for it in one part of India.

-Source: Indian Express

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