NABARD Chairman Shaji KV stated on Thursday that the government’s decision to restructure the goods and services tax (GST) system with two main slabs of 5% and 18% will increase rural residents’ incomes as prosperity in the remote areas grows.

“People are prepared to advance, and you are aware of India’s rising trajectory. In addition, there is a favorable monsoon and an additional 8% of harvested land. Therefore, the environment was ideal, and the reduction in the GST is giving rural residents more money,” the chairman of NABARD stated.

According to him, rural prosperity is already being felt, and the most recent NABARD rural attitude survey demonstrated that more individuals are borrowing from formal sources, which has led to more formalization and lower credit-access costs. Additionally, inflation feeling is mild.

The chairman stated that most farm equipment will become less expensive due to the new GST reforms since they will be included in the 5% slab, and many of them will continue to be tax-free.

“Therefore, the people will have more money. They will now invest more in capacity increase because mechanization costs are declining, which bodes good for future output as well,” Shaji said.

He asserted that the government action will increase both present and future output. He emphasized that the growing need for rural income will lead to increased production, bolstering the manufacturing sector.

“It means Atmanirbhar Bharat is actually playing out well in rural areas and the government has taken right steps to give it a boost with the current GST rate cuts,” he said.

Tractors and other farm equipment will become more affordable, and their running costs will decrease as well.

He stated that “because the productivity has to catch up to the levels of international productivity, we are now focusing on building capacities.“