The Hindu Business Line : Should agricultural income be taxed?<br> Responses to Sticklish Issues dated February 20

Tax on farm income will inspire the farmer to face the state of affairs optimistically. The Indian farmer is pessimistic and believes that he is caught in a vicious circle of underdevelopment and that agriculture is a gamble with the monsoon.

T. V. Jayaprakash, Palakkad, e-mail

There is no need to provide tax benefit for rich farmers. The challenge will be to identify the rich farmers. The Government can set up a reasonably high bar beyond which a marginal tax rate is levied. With reference to persons having income from both agricultural and non-agricultural sources, perhaps the time has come for the Government to seriously consider fixing, in consultation with the State governments, a threshold beyond which their income from agricultural sources could be brought under the tax net.

Many businessmen are mis-declaring their incomes as from agriculture and evading the tax. Ways should be found to integrate the two.

S. Krithivasan, e-mail

The question of introducing tax on farm income has been dragging on for years, perhaps for political reasons. Only the rich farmers should be made to pay. However, it could start with a separate low rate, open tax regime.

A. Jacob Sahayam, Thiruvananthapuram

This move should be strongly opposed on the following grounds: Agri-income falls within the jurisdiction of the State governments.

It will only end in the harassment of poor and farmers who have already lost all will to fight a government mechanism.

Going by media reports that agriculture is the business to be in, I , considered myself a fool working for the Government, earning Rs 20,000 a month. For, reports suggested that with 15 acres and a thousand coconut treesI could easily make Rs 5 lakh at Rs 5 per coconut, assuming a harvest of two lakh nuts. After retirement, I hurriedly ploughed in all my hard-earned money on farm. After five years of toiling hard, I realised there was little substance to the media's optimism.

Fertiliser costs are exorbitant in spite of the subsidy. Power supply is erratic and it is almost impossible for plan lift irrigation. Commodity prices at the point of production is hardly 30 per cent of its cost in the city market; the diesel cost is prohibitive. So, in the best of best years my profit was Rs 60,000.

Had I sold my land for Rs 30 lakh, the going price two years ago, even with the meagre 6 per cent interest I would be getting Rs 15,000 a month, and enjoying the good life.

Gandhi Mohan Bharathi, Nainaragaram

The suggestion is a welcome one as several landlords and agriculturists though in a position to pay tax have been outside the net.Free concessions, such as power, must be dispensed with immediately.

They may be supported by supply of seeds, fertilisers, agro-medicines to develop their farms with modern equipment. Only then will India become green, at least by 2020.

C. V. Pasupathy, Bhavani, premak@sancharnet.in

The Committee on Agricultural Taxation headed by Dr K. N. Raj suggested back in 1975 that the agricultural income of landholding classes should be taxed.

Till date, the formula given by him is used to club agriculture and non-agriculture income under the provisions of the Income-Tax Act, 1961 in order to calculate tax liabilities of a farmer. This was devised at the time of the Green Revolution.

Identification of well-to-do farmers is the main issue that demands attention.

The plight of small and marginal farmers is miserable, as is evident from reports of their suicides. Even in a prosperous State such as Punjab, the farming community, particularly the small and marginal farmers, is in deep debt and almost every second day, a farmer commits suicide.

The need of the hour is to help small and marginal farmers break out of the vicious cycle, teach them how to curtail unproductive expenses, provide them with low-cost farm technology and finance and create a mechanism that gets them remunerative prices for their produce.

Anil Kumar Angrish Mohali

The Government is taking steps to double India's share in the world farm trade for which more funds are required.

Agriculturists should think of how direct and indirect taxes are mobilised from all other sectors including the salaried class. Thus, the recommendation on taxing farm income is a reasonable one.

S. Sivasankaran Salem

The move to bring farm into the tax net is welcome. But ultimately it has to target the big farmers and the rural rich.

Subbalakshmi, Madurai

The Finance Minister must bring the rural rich into the tax system Rural landlords and owners of food-processing industries can afford to pay taxes.

In this way, all income earners will be contributing to the growth of the economy.

T. S. Sundaeswaran New Delhi

Responses to Sticklish Issues dated February 13:

The populist consumer-friendly announcement of Re 1 per call for both STD and local calls has long been awaited.The move is encouraging but it may hit the Postal Department.

If the final tariff is formulated by increasing the rent and disallowing free calls, it will be a cruel joke on the consumers.

T. S. Sundareswaran New Delhi