New Delhi, January 11
Finance Minister P. Chidambaram today set in motion the customary pre-Budget consultations with agriculture experts suggesting the government to replace the Minimum Support Price by remunerative prices and Participatory Price Insurance Scheme.
The Finance Minister today met agriculture experts and the apex industry chambers in separate meetings in a run-up to the preparation for 2005-06 Union Budget.
Farm economy experts suggested that the government should provide capital subsidy to farmers to build water storage pits.
Moreover, the National Rural Employment Guarantee Scheme announced by the government must provide more employment than the 100 days at present envisaged, and should be made more universal and not confined to BPL families. A self-selection scheme may be devised by an appropriate choice of the wage rate.
Cooperatives also need to be strengthened and restructured for improving credit delivery to agriculture and allied sectors. Regional Rural Banks in association with Nabard may be assigned this task, they said.
In addition, fiscal incentives should be provided for the development of organic farming, bio-fuel, palm oil and other rural resource-based industries, the expert suggested.
Rural water management schemes initiated in the current year’s Budget also need to be strengthened with a higher allocation of resources and making them more universal.
They also said that exports may be exempted from the system of Value Added Tax (Vat) to avoid delays in duty refund and there was a need for credit linked centrally sponsored schemes to be transferred to Nabard.
Besides, a separate TV channel for farmer, .R&D in agriculture and allied sectors should be given a major thrust by providing more funds. More working capital at concessional interest rates should be provided to plantations.
Need for replacement of cooked meals in mid-day meal scheme by fruits, fruit and vegetable juices, sweet potatoes etc. and income tax on marketing cooperatives may be withdrawn, they said.
The meeting was attended by eminent agricultural economists and researchers, representatives of cooperative banks, agricultural commodity organisations, the Chairperson of Nabard and senior officials of the Ministry of Finance.
In a separate meeting with the Finance Minister, the Federation of Indian Chambers of Commerce and Industry (FICCI) said the government should set a minimum annual target of Rs 25,000 crore for disinvestment of public sector undertakings (PSUs).
“There does not appear to be any rationale in continuing with the loss-making public sector companies, why not these be fully privatised”, Ficci said.
That apart, divestment/ privatisation in all non-strategic profitable companies and strategic profitable companies be up to 74 per cent and 49 per cent, respectively, the industry body said.
President of Federation of Indian Export Organisations (FIEO) O. P. Garg said measures needed to be taken to offset the cost disability factors such as neutralisation of unrefundable taxes and duties, high cost of credit, high cost of power and transaction costs.
In its pre-Budget memorandum, the Confederation of Indian Industry (CII) said corporate tax rate should be reduced to 30 per cent from the existing rate of 35 per cent in line with recommendation of the Kelkar Task Force and the surcharge of 2.5 per cent be removed.
CII also suggested that all existing exemptions granted under the Income Tax Act, 1961 be reviewed by a Task Force comprising of government and industry representatives.
