At a time when the agriculture and food processing sectors in India are reeling under a severe cash crunch, the Tamil Nadu Foodgrains Merchants Association (TFMA) has requested the government to lower bank lending rates.
The association recently submitted a pre-budget memorandum to the Finance Minister demanding immediate revision in lending rates for the agriculture sector. According to the organisation, reduction in lending rates is pivotal for the development of the agriculture sector, constituted largely by small and mid-sized players.
Additionally, the body has recommended withdrawal of Banking Cash Transaction Tax and Fringe Benefit Tax at the earliest. According to agri experts, easing the tax burden can provide much needed respite to cultivators in the country.
Prof Rajesh Kumar, Head of Department, Agricultural Engineering at Tirhut College of Agriculture, Muzaffarpur, Bihar, says, “Small cultivators in the country are struggling to sustain themselves due to the high tax regime. The government should therefore pay attention to the recommendation made by TFMA to support hapless farmers in the country.”
In the past few months, farmers across India have suffered huge losses due to unseasonal rains and consequent crop failure. This has also dealt a major blow to the food and beverage (F&B) players who have been struggling to sustain their margins in the face of rising minimum support prices (MSP). Hence, it is felt that the government should take adequate measures to support the agriculture and F&B sectors.
Food processing players to gain too
Apart from the agriculture sector, TFMA has also recommended steps to aid the food processing segment. The association has sought immediate removal of service tax on lorry freight borne by food exporters. The suggestion has been welcomed by food manufacturing companies across the country.
“A high tax burden has a more pronounced impact on small and mid-sized players like us. In recent times, service taxes have been hiked at an unprecedented rate, making it even more difficult for us to maintain profitability,” says BN Nayak, proprietor of Amrit Frozen Foods Pvt Ltd, a frozen foods supplier and manufacturer in Bhubaneswar.
TFMA is also lobbying for the removal of a notification that necessitates traders to produce the Declaration Form C/Form F.
Shubhomita Bose |
