High taxes keep private hands off Haryana, Punjab
As farmer unions across Punjab and Haryana plan to stage protests over reports of the ministry of food issuing directions to private players not to enter the wheat bowl of India (Punjab and Haryana), there is something else too that may keep priva...
By Madhvi Sally, TNN |
CHANDIGARH: As farmer unions across Punjab and Haryana plan to stage protests over reports of the ministry of food issuing directions to private players not to enter the wheat bowl of India (Punjab and Haryana), there is something else too that may keep private companies at bay ��� high tax structure.
Data shows private traders, including major corporate house like Cargill, ITC, Britannia Industries and Delhi Flour Mills, procured only 13.71 lakh tonne of total 118.2 lakh tonne of wheat procured during 2007-08 in Punjab and Haryana. The low procurement by private players from these two states is attributed to a high percentage of tax vis-a-vis other states.
���Till date, the government has not suggested us formally not to venture in Punjab and Haryana market. But it is an unattractive market as the procurement taxes are higher than neighbouring states by almost 7-8%,��� said an MNC official.
In Punjab and Haryana, private players have to give 2.5% commission (dami) to kacha arthiya, 1% to pakka arthiya, 2% market cess, 2% rural development fund, 4 % VAT and 3-4% other expenses likes labour (at Rs 5 per quintal), godown freight and loading-unloading charges. In Punjab, traders now also have to give 1 % infrastructure cess.
The Food Corporation of India intends to procure 85 lakh tonne of wheat from Punjab, 40 lakh tonne from Haryana and 10 lakh tonne from Rajasthan, Madhya Pradesh and Uttar Pradesh. An informal ban by the government in 2007-08 on private players was seen as the only alternative to ensure procurement for buffer stock and the public distribution system (PDS).
Bharti Kisan Union general secretary Puran Singh Shahkot said the move was unconstitutional and unfair towards the farmers of Punjab and Haryana. ���MSP is an artificial calculation and used for procurement for the PDS to subsidise food for the poor. Sadly, the subsidy instead of being borne by the government is actually being borne by the farmers,��� he said.
Local traders and millers feel the situation on production and private players keenness to procure wheat would be clear by the last week of March and first week of April.
Data shows private traders, including major corporate house like Cargill, ITC, Britannia Industries and Delhi Flour Mills, procured only 13.71 lakh tonne of total 118.2 lakh tonne of wheat procured during 2007-08 in Punjab and Haryana. The low procurement by private players from these two states is attributed to a high percentage of tax vis-a-vis other states.
���Till date, the government has not suggested us formally not to venture in Punjab and Haryana market. But it is an unattractive market as the procurement taxes are higher than neighbouring states by almost 7-8%,��� said an MNC official.
In Punjab and Haryana, private players have to give 2.5% commission (dami) to kacha arthiya, 1% to pakka arthiya, 2% market cess, 2% rural development fund, 4 % VAT and 3-4% other expenses likes labour (at Rs 5 per quintal), godown freight and loading-unloading charges. In Punjab, traders now also have to give 1 % infrastructure cess.
The Food Corporation of India intends to procure 85 lakh tonne of wheat from Punjab, 40 lakh tonne from Haryana and 10 lakh tonne from Rajasthan, Madhya Pradesh and Uttar Pradesh. An informal ban by the government in 2007-08 on private players was seen as the only alternative to ensure procurement for buffer stock and the public distribution system (PDS).
Bharti Kisan Union general secretary Puran Singh Shahkot said the move was unconstitutional and unfair towards the farmers of Punjab and Haryana. ���MSP is an artificial calculation and used for procurement for the PDS to subsidise food for the poor. Sadly, the subsidy instead of being borne by the government is actually being borne by the farmers,��� he said.
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Local traders and millers feel the situation on production and private players keenness to procure wheat would be clear by the last week of March and first week of April.
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