Telangana: Higher GST fails to deter farmers using drip model

Hyderabad: The additional burden on account of higher GST on drip irrigation has failed to deter farmers in the state from opting for the method. The government has received higher number of applications from farmers for drip irrigation this year. 

Earlier a five per cent VAT was levied on drip irrigation which has now increased to 18 per cent under GST.

The state government requested the Centre several times to reduce GST on drip irrigation to five per cent but in vain.

The government has finally decided to subsidise farmers by taking five per cent of the GST burden, leaving the farm community to shoulder a slightly reduced 13 per cent tax burden.

This was just the kind of backing the farmers needed, and they respon-ded with an increased number of applications for drip irrigation equipment.

In 2017-18, over 3.85 lakh farmers submitted applications for drip irrigation on a total of 1.16 lakh acres. This was a steep rise over 2016-17 when the government received just 10,550 applications for 32,710 acres.

The state government has been subsidising farmers who take up drip irrigation for some time. Occasionally payment of subsidy to farmers would get delayed due to funds crunch. This often discouraged them from taking up drip irrigation. The government recently borrowed Rs 1,000 crore from Nabard to ease the situation.

The government gives 100 per cent drip irrigation subsidy to farmers belonging to the Scheduled Castes and Scheduled Tribes, 90 per for backward classes and 80 per cent for all others.