Food’o’nomics – KKC

Recently, our central government announced union budget for financial year 2016 -2017.


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Many financial experts analysed it. Some criticized it and some praised it. Some opine that this budget has disappointed the middle class, but some say it will prove to be a big leap in nation’s development in the long run. Whatever happens, one thing is quite apparent – new budget is focused highly on Indian agriculture sector which already is significant for India’s economy; but is disheartening, depleting rapidly, and would be an endangered profession if ignored for long!

Well, I am not a financial expert to derive any conclusion so far, but for leading a sustainable life, financial literacy holds utter importance. I always had a soft-spot for food. But being a foodie does not mean that you talk only about munching, there’re certain economics one should be aware of, like our moms are while planning monthly budget for home. So this time I tried to be more sensible. I tried to understand and explain how this much hyped kisan kalyan cess in the new AAM budget will impact our food.

happy farmers

If you are still unaware, it’ll be my privilege to inform you about a minor charge that government has made us confront on all taxable services – 0.5 percent krishi kalyan cess. Say, if you dine in a restaurant, you’ll have to pay extra 50 paisa on every ₹100 payable.

Honestly saying, half-a-percent here and half-a-percent there does not make a difference immediately; but if you are restaurant frequenter, you’ll be forced to take a closer look at the bottom of your bill!

From the revenue generated from new taxes levied, our government has introduced various perks and incentives in agro-sector with a view to revive it. This was something needed badly to prevent further misery to poor farmers, which hold a key role in the pyramid of basic necessities of life.

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Kisan kalyan cess will not only impact you while dining out but every taxable service, like telecom and internet bills, branded clothes, movies, air travel etc. India is a fast growing economy and a potential market, so if we assume that an adult spends around two thousand rupees on an average every month on such services – he/she is contributing just 10 bucks a month for the betterment of our feeders. But out of 130 crore population of our country, if we consider a rough figure of 70 crores as an adult populace who somehow use such services, so by simple mathematics:

70,00,00,000 X 10 = ₹ 700,00,00,000

Yes, that’ll make seven hundred crore rupees a month. This amount, in turn, makes eight thousand four hundred whopping crore rupees a year! Whereas government expects to collect only five thousand crore from this new levied cess. [1]

Well this, of course, is an amateur calculation and the figure might appear exaggerated; but our population can be a boon here – and that’s an undeniable fact.

Also, this new cess will come into force from june 1, 2016; and may not necessarily be 0.5%, it could go lower. [2]

Frankly, I don’t have a problem in paying this small amount that will be exclusively used to fund various initiatives for improving the lives of our farmers, and strengthening the agriculture sector as a whole. If we can spend millions in the name of entertainment on some crappy Bollywood flicks, then we can surely contribute a little for the cause!!

And considering the demand and supply relationship, if things work well – the boost in agro-sector may also cut inflation in food prices!


1: Economic Times, 29 Feb, 2016

2: The Indian Express, 6 march, 2016 

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3 Comments Add yours

  1. Jas says:


    1. Anonymous says:

      Gud one…

    2. Valjean says:

      That hits the target pecltrefy. Thanks!

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