Budget 2025: Experts call for balanced tax reforms to drive economic, nutritional security

As India prepares for the Union Budget 2025, experts stressed the need for tax reforms to align with the country’s goals of achieving nutrition security and promoting healthier food consumption.

Experts highlighted the importance of lowering GST rates on healthy food products like low-sugar and zero-sugar beverages while increasing taxes on unhealthy processed foods.

Hrishit Panthry, Co-Founder of Envirocare Foundation said that India’s economy has long depended on the agriculture sector, which not only contributes to GDP but also provides employment to a large segment of the population.

He said that initiatives like PM-Kisan Samman Nidhi Yojana, which provides direct income to farmers, and the Soil Health Card Scheme, promoting balanced fertilizer use, reflect efforts to enhance the sector. Mr Panthry added that government projects like the Digital Agriculture Mission and subsidies for farm equipment have enabled farmers to boost output while reducing input costs.

Panthry also highlighted the role of policies such as Minimum Support Prices (MSP) and crop insurance schemes like Pradhan Mantri Fasal Bima Yojana in safeguarding farmers against market fluctuations and adverse weather.

Shrikant Goenka, Managing Director, Premier Irrigation Adritec (PIAL) said that the agriculture sector, often referred to as the backbone of India’s economy, still requires focused investment in the wake of the COVID-19 pandemic.

He said that Union Budget 2025 is expected to prioritise infrastructure development for cold storage, warehousing, and supply chains to minimize post-harvest losses and improve market access.

Goenka emphasised the need for subsidies on advanced technologies such as drones, AI-based monitoring, and precision farming to enhance productivity and resource efficiency. He pointed out that addressing water management, climate change, and expanding crop insurance coverage is critical for the sector’s growth. He further added that affordable credit and better MSP realization through farmer-producer organizations (FPOs) could also provide significant relief.

According to Goenka, the upcoming budget has the potential to transform Indian agriculture into a sustainable and resilient sector.

Aman J Jain, Co-Founder and CEO of Doodhvale Farms said that key players in the dairy and poultry industries are looking to Union Budget 2025 for policy interventions to address challenges and foster growth. He highlighted the importance of financial support for modernising infrastructure, including food processing facilities, cold storage, and supply chains, to reduce wastage and increase returns for farmers.

Jain also called for subsidies to mitigate the rising costs of fodder and feed, which have been burdening farmers. He added that enhanced funding for breed improvement and veterinary services, as well as measures to promote sustainable practices like cage-free farming, are crucial for the dairy and poultry sectors.

Jain further emphasised the need for improved credit availability, export facilitation policies, and better loan terms to unlock new revenue opportunities. He expressed optimism that the budget could drive employment and ensure the sectors contribute to rural incomes and food security.

Dr. Arpita Mukherjee, Professor at ICRIER advocated for linking agriculture with nutrition through food fortification to combat micronutrient deficiencies. She suggests subsidies for small farmers and FPOs to reduce the cost of laboratory testing and certification. Dr. Mukherjee also calls for reforms in GST, proposing lower rates on healthy food products like low-sugar beverages and higher rates for unhealthy options to encourage better dietary choices.

“Taxes and subsidies can be used to reduce the salt content in processed food, where India has committed to the WHO to reduce the sodium intake by 30% by 2025 to reach less than 5 gm salt per day but recent studies show that the intake is higher than 10 gm/day. Several products, like alcoholic beverages and petroleum, are not covered by GST. However, these products may be covered by GST for uniform taxes,” she said.

India’s agriculture sector is poised for a breakthrough, with a record-breaking Kharif food grain production of 1647.05 LMT projected for 2024-25, but challenges remain, according to Vimal Kumar Alawadhi, Managing Director of Best Agrolife Ltd.

“The 18% GST on agrochemicals makes quality crop protection expensive for farmers. Reducing it to 5% would enhance accessibility, improving productivity and profitability,” Alawadhi said. He also emphasised the need for Production-Linked Incentive (PLI) benefits to boost local manufacturing and reduce reliance on imports.

To address rising pest resistance and raw material costs, Alawadhi called for the reintroduction of the 200% income tax deduction on R&D investments and urged for stronger public-private partnerships to develop innovative crop protection solutions. Such measures, he noted, could foster a robust R&D ecosystem and position India as a global leader in the agrochemical sector.

Experts across sectors echoed the need for a balanced approach to taxes and incentives to address micronutrient deficiencies while supporting sustainable agricultural practices.