Rural India and farmers are expecting many important announcements from this time’s Union Budget 2025. Finance Minister Nirmala Sitharaman is expected to take major steps to increase the income of rural areas and improve infrastructure. Experts believe that if the government increases investment in roads, irrigation, and warehousing infrastructure, it will strengthen the supply chain and farmers will get the right price for their crops.

1. Increase in Kisan Credit Card (KCC) limit

The government may announce increase in the limit of Kisan Credit Card (KCC) in Budget 2025.

  • Current Situation: Farmers need more capital due to increase in the cost of agricultural inputs and irrigation.
  • Possible changes: KCC limit may be increased to Rs 5 lakh.
  • Benefit:
    • Farmers will be able to take more loans at lower interest rates.
    • Increasing investment in farming will improve productivity.

Through Kisan Credit Card, the government gives loans to farmers at concessional rates, so that their financial needs can be easily met.

2. Reduction in GST on Agri inputs

There is a possibility of reduction in GST rates on seeds, fertilizers and pesticides used in farming.

  • Current GST Structure:
    • 5% GST on seeds like paddy, wheat, maize.
    • GST exemption on seeds of vegetables like tomato, potato, brinjal.
    • 12% GST on fertilizers like Urea, DAP and MOP.
  • Demand from Agri experts:
    • All inputs used in farming should be completely exempted from GST.
    • This will reduce the cost of farming and farmers will get direct benefits.

3. Increased allocation of agri schemes

To improve the economic condition of rural India, there is a need to increase allocation for agriculture related schemes.

  • Current Allocation: There was a provision of ₹65,529 crore in the agriculture sector for FY 2025.
  • Possible changes:
    • Allocation for schemes like Crop Insurance and Modified Interest Subvention Scheme is expected to increase.
    • Increasing allocation will increase employment and demand in rural areas.
  • Growth in the last five years: The annual growth rate (CAGR) of the Agri Budget has been 5.4%.

4. Possible rise in agricultural sector shares

The impact of positive announcements for the agriculture sector in the budget will also be seen on the shares of agriculture related companies.

Major Stocks and their Prospects:

  1. Fertilizers and Chemicals Travancore (FACT):
    • Current Price: ₹885 (14 January 2025).
    • Expected prices: ₹1,136 (short term), ₹1,830 (long term).
  2. Kaveri Seeds:
    • 37% return in last one year.
    • Possibility of rise in prices after the budget.
  3. Chambal Fertilizers:
    • An increase of 22% in the last one year.
  4. Rallis India:
    • 12% increase in one year.

Conclusion: If the agriculture sector gets a boost in the budget, these stocks may see further gains.

5. Focus on rural infrastructure

The government can pay special attention to road, irrigation, and warehousing infrastructure in rural areas.

  • Supply Chain Improvement: Better infrastructure will ensure timely supply of crops.
  • Right price of crops: Farmers will be able to sell their produce in better markets.
  • Increase in income: Employment and income will increase in rural areas, which will improve their quality of life.

 

Rahul Dev

Cricket Jounralist at Newsdesk

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