The Hindu Business Line : Agriculturists seek more funding, tax sops

IT'S TIME: The Finance Minister, Mr P. Chidambaram, with the Minister of State, Mr Pawan Kumar Bansal, at a pre-Budget meeting with agriculturists at North Block in the Capital on Friday. - Ramesh Sharma

New Delhi , Dec. 29

Agriculturists, on Friday, urged the Finance Minister, Mr P. Chidambaram, to extend a 10-year tax holiday on incomes earned from development of micro-infrastructure, such as for irrigation, under the Bharat Nirman programme of the Central Government.

At the pre-budget meeting with the Finance Minister, they asked the Government to look into framing of certain fiscal instruments to ensure that a part of the surplus created by converting land use from agriculture is reinvested in the same area.

Given the over-dependence of agriculture on the vagaries of nature, there was a suggestion that insurance based on `weather related parameters' should receive attention in the next year's budget. It was also suggested that panchayats be the units of settlement in case of crop failures and that weather insurance premium be in the range of not more than 3-5 per cent of the sum assured.

As agriculture was a State subject, Mr Chidambaram made it clear at the onset that participants should highlight those issues that could be addressed by the Central Government.

The experts used the occasion to address issues related to crop insurance, irrigation, watershed development, restoration of water bodies, agriculture extension, micro-financing, agriculture marketing and contract farming.

In particular, it was suggested that coverage of the existing crop insurance scheme be expanded. It was also emphasised that special economic zones should not be allowed to encroach upon agricultural lands.

Union leaders meet

Meanwhile, trade union leaders, who met the Finance Minister separately at North Block, sought a raise in the personal income tax exemption limit from Rs 1 lakh to Rs 2 lakh. They also called for the abolition of fringe benefit tax.

They also demanded reintroduction of long-term capital gains tax and increase in securities transaction tax and to bring BPO and other outsourcing outfits into the tax net.

The labour leaders sought increase in the percentage of provident fund contribution to 15 per cent from the present 12 per cent and also suggested that interest rates should not be reduced on EPF and GPF.

On the controversial SEZ issue, the trade union leaders pointed out that agricultural lands, irrespective of how fertile they are, would be lost due to government policy on such zones. They called for the formulation of national policy to ensure that there was no scarcity of cultivable land.

They also demanded that the total allocation for education, health and housing should be 25 per cent of the GDP against the existing 12-13 per cent.