Finance Minister Nirmala Sitharaman Engages with Farmers Delegation Led by D Purandeswari on Taxation Issues

Ahead of the 2026-27 Budget, Finance Minister Nirmala Sitharaman held discussions with a group of farmers led by BJP MP D Purandeswari. The meeting was highlighted in a tweet by the Finance Ministry, stating, "Delegation led by Smt @PurandeswariBJP, Honble MP LS, calls on Smt @nsitharaman."

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Purandeswari expressed concerns to the Finance Minister about the potential impact of increased taxation on flue-cured Virginia (FCV) tobacco cultivation. She warned that this could cause distress for numerous farming families and disrupt the regulated marketing system. The Andhra Pradesh, Telangana & Karnataka FCV Tobacco Farmers Federation issued a statement highlighting these concerns.

Impact on Legal Trade and Revenue

The delegation also cautioned that a significant tax hike might reduce legal trade while boosting illicit activities. This shift could lead to revenue losses for the government. They emphasised that starting February 1, there would be a notable rise in tax on legal cigarettes, affecting demand and trade dynamics.

Farmers from Andhra Pradesh and Telangana informed Sitharaman that their crops were ready for auction next month. They feared that increased taxes might lower domestic consumption, leading to price drops and unsold stock. These concerns were shared during their meeting with the Finance Minister.

Concerns Over Market Stability

The delegation highlighted that higher taxes could pressure auctions, buyer participation, and overall trade confidence. This situation could negatively affect the market stability for FCV tobacco farmers. The farmers stressed the need for careful consideration of these factors to avoid adverse impacts on their livelihoods.

The meeting underscored the importance of balancing taxation policies with the economic realities faced by tobacco farmers. Ensuring a stable market environment is crucial for maintaining their income and supporting rural economies dependent on tobacco cultivation.

The discussions between Sitharaman and the farmers aimed to address these pressing issues before finalising budgetary decisions. The outcome of these talks could significantly influence future policies affecting the tobacco farming sector.

With inputs from PTI