Finance and Corporate Affairs Minister Nirmala Sitharaman held discussions with farmer organisations and agricultural analysts on Friday, marking a third round of pre-Budget talks after she met a group of financial market experts the previous day. 

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A number of topics were discussed in the pre-Budget meeting, with participants pitching for an increase in the financial aid provided to farmers. Currently, the central government provides financial support to the tune of Rs 6,000 to eligible farmers each year in three equal instalments.

The pre-Budget talks come days after the government doled out the 17th instalment of financial aid to eligible farmers under its flagship PM Kisan Samman Nidhi scheme, also known as the PM-KISAN programme.

A few participants suggested that the subsidy provided to farmers be made in proportion to the quantity of land owned by them. 

Among other suggestions made in the meeting, participants suggested that farmers be given the benefit of the GST input tax credit provision, which enables the taxpayer to reduce the amount of tax payable based on the tax already paid on inputs.

Some of the other noteworthy suggestions included:

  • Farmers should also be brought under the ambit of the PM-KISAN scheme
  • A GST Council-like facility should be established to work dedicatedly towards increasing farmers' income
  • Need to revisit agri-business scheme (no change since 2010)
  • Room for reduction in urea subsidy; urea price should be raised
  • Subsidy should be rationalised in commodities such as potassium in order to boost output

Meanwhile, the full Budget for the current financial year, which ends on March 31, 2025, is expected to be presented in Parliament in July. 

What is the difference between a Vote on Account and a full-year Budget?

A vote on account is a temporary provision for a government to meet its expenses in an election year and is followed by a full-year Budget by a new government that assumes office after the election. 

A full-year budget outlines the government's revenue and expenditure for the entire fiscal year, including detailed allocations for various sectors, new initiatives, and policy changes.

The main difference between a Vote on Account and a full-year Budget lies in the duration and scope of financial planning between the two mechanisms.

With inputs from agencies