New Delhi, April 5
The Centre’s decision to fix a ceiling of 4 per cent on tax imposed by states on the procurement of foodgrains will hit Punjab and other states severely.

The state presently imposes a tax of around 13 per cent on foodgrains procured by Central procurement agencies, which earns the Punjab Government around Rs 1300 crore per marketing season.

The Union Cabinet while hiking the minimum support price of wheat by Rs 10 this year decided to fix a ceiling on the tax imposed by the states and according to the Union Food Minister, Mr Shanta Kumar, the decision would be implemented either this marketing season or the next season.

“We are serious about implementing the decision and we will not pay more than 4 per cent tax on procurement,” he said.

Mr Shanta Kumar said the states, including Punjab and Haryana, had reservations about the decision and they wanted the Centre to compensate them for loss in revenue. The Finance Ministry is seized of the problem and some decision would be taken soon, he added.

Referring to the foodstock position in the country, he said India had exported a record 75.62 lakh tonnes of foodgrains during 2000-2001.

The exports marked India’s arrival in the international market in a big way and the country earned Rs 4000 crore in foreign exchange.

Though the export price was dictated by international trends and was far less than the minimum support price, the minister said it helped in reducing the existing foodstocks which were worth around Rs 60,000 crore.

Apart from creating storage space for fresh arrivals, the government also gained on the carrying costs, the minister said.

The exports were made to 20 countries, including Bangladesh, Philippines, Malaysia, Singapore, Egypt, Russia and Taiwan.

He said the government had taken several initiatives to spur exports and this included announcing export prices at least 45 days in advance and that too for a minimum of three months.

On the export of foodgrains to Afghanistan, Mr Shanta Kumar said India had the stocks and it was for the international agencies to lift it.

As for the export of wheat to Iraq, he said a delegation from that country would be here shortly to discuss the matter.