CII’s wish list
With
the Union Budget 2005-06 around the corner, TAJ browses through CII's
wish list for agriculture and its allied sectors this year
Agriculture
and its allied sectors occupy a significant position in the budget
recommendations made by the Confederation of Indian Industries (CII).
The proposal touches every area of concern in the most appropriate
manner, to help the industry make the most of trade opportunities
present.
ALIGNING PRODUCTION WITH MARKET
DEMAND
Farmers should be able to
directly interface with agriculture business enterprises with a view
to produce quality crops as per the market demand and be able to sell
the same to these agriculture business enterprises. The current APMC
Act of different states prohibits any transactions outside the mandi
system. All State Governments will have to amend their APMC Acts along
the lines of the Model Act prepared by the Union Agriculture Ministry.
The forthcoming Budget should set up a fund giving incentives to State
Governments, to amend the APMC Act within 2005.
RECOMMENDATIONS FOR OIL SECTOR
1. Create oil seeds and Oil Development Fund
2. Reduce customs duty on crude palm oil from 65 to
45 per cent for the benefit of the consumers
3. Stipulation regarding minimum carotenoid in crude
palm oil should be reduced from 500 to 300 mg/kg and acid
value of two per cent should be increased to four per cent
4. Excise duty on vanaspati should be reduced from
Rs 1.25 per kg to Re 1 per kg, that is at par with excise
duty applicable on refined edible oils
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PRODUCTIVITY AND QUALITY TO
MEET
INTERNATIONAL NORMS
The Public Agricultural
Research System of India (led by ICAR and Agricultural Universities)
has perfected several best practices for improving farm productivity,
but the same do not reach all farmers, as they are small and dispersed
across 600,000 villages. The current efforts of Government in extension
work should be substantially supplemented by the private sector. In
order to incentivise the private sector to engage in agricultural
extension activity, the weighted income tax deduction available to
investments in R&D (Sec.35 (2 AB) should be extended to investments
made in extension work.
INCREASING CAPITAL FORMATION
Larger amounts of private
investments should be mobilised in areas like Water Management, Storage,
Transportation, Information Technology, Post-Harvest Mechanisation,
etc., to supplement government investments in these areas. Such investments
qualify for exemption from Tax of Profits similar to the investments
in infrastructure under Sec.80 (IA).
INCREASE FLOW OF CREDIT
While it is commendable
that lending rate of interest in agriculture loans now have an interest
rate ceiling, practical experience on the field point
contd...
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