Impact of GST on Indian Agriculture Sector

Abstract

Agriculture sector plays a very significant role in the growth of Indian economy. India is one of the largest producer and exporter of agricultural products such as rice, wheat, sugarcane and spices in the world. More than 15 percent of Indian total GDP and it is also one of the major sectors for employment in rural India. Since, the beginning of independent, there was no unified tax system in India. The introduction of Goods and Services Tax (GST) in 2017 had a huge impact on all sectors in the Indian economy including agriculture. The GST has been considered as one of the most significant reform in the Indian tax system since the 1991 economic reforms. Subsequently, agriculture is the largest sector for employment, the implementation of GST had an impact on farmers income, agro-products, machinery, fertilizers and exports. As a result, this may lead to drastic changes in the Indian economy. The primary objective of this paper is to analyze and understand the impact of GST on the agriculture sector in India. It will also examine both negative and positive implications of GST on the Indian economy. It also examines the socio and economic condition of the Indian farmers especially after the implementation of GST. This paper is purely based on secondary sources such as books, research articles, magazines, newspapers and reports published by various governmental and non-government research institutions.