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Farm infrastructure requires focus
It is unfortunate that despite fervent pleas by industry the agri-warehousing and cold chain sector has not been granted “infrastructure status”. There is an estimated 32 million shortage in storage capacity, and even conservative estimates put the immediate investment requirement at Rs 10,000 crore. The Finance Minister had amended section 35 AD of the Income Tax Act to permit full depreciation to be charged in the year of investment. This concession has proved inadequate as it amounts only to a tax deferral and provided no tangible tax relief. It is only the grant of infrastructure status that will provide a major fillip for investment in this vital sector.
Agri-warehousing currently receives a marginal subsidy through a NABARD implemented scheme. This minuscule subsidy has not helped make investment in warehousing viable. In addition, NABARD under a new window of direct financing should provide direct loans at lower rate of interest to the private sector for warehousing, integrated supply/ cold chain and allied infrastructure development activities in the rural areas, under RIDF funds.
Mere refinancing and state loans does not comply fully with NABARD's mandate or purpose for which it was created. There is also need to eliminate the need for different VAT registration numbers across states for entities and individuals license by the newly set up Warehouse Development and Regulatory Authority (WDRA). In fact, VAT/CST should apply only when physical transfer of agriculture produce takes place. This will encourage free movement and trade and serve to stabilise prices of agricultural commodities across the country.
Sanjay Kaul
MD &CEO, NCMSL.
IT sector seeks IP-based incentives
The Government should consider extending the tax holiday for IT exporters by another year, now that the Direct Tax Code will come into force only from 2012. The refunds for input service tax are not benefitting exporters of service, as most refunds are pending. Our suggestion is the Government should at least end the reverse charge on services for 100 per cent exporters.
The Finance Minister should reiterate that all sovereign tax treaties entered into with India should be honoured. This would boost the confidence of MNCs who have business in India. Currently, our Intellectual Property (IP)-based incentives depend on specific approvals from Government.
The grant of more IP-based incentives, similar to those in Singapore, will spur IT companies to relocate their R&D centres to India, turning it into an IP hub. Rather than depend on work permits or visas, we should give IT companies incentives to migrate IP to India. Indian IT companies need not fear the US Government's moves to protect jobs for its citizens, asour GDP growth at nearly 10 per cent can help absorb such irritants.
Indraneel R Chaudhury
Executive Director, Tax & Regulatory Service, PwC India.
Give agriculture research a boost
We hope the forthcoming budget would give due importance to the agriculture sector, and help it to overcome the key challenges to fulfil our food-security requirements. It is imperative to provide incentives to bridge the gap between actual and potential yield and leverage technology to improve productivity.
The industry seeks the Government's support for creating a productive and enabling environment for agri-business to produce newer crop technologies, and environment- and farmer-friendly products. The budgetary incentives should also extend to building agri-support infrastructure, creating non-farm jobs for farmers with small land-holdings to ensure inclusive growth.
To usher a second green revolution and fulfil the growing food demand, we need increased investments in agricultural research. Encouraging widespread use of technologies is a must for rejuvenating agriculture and ensuring long-term food security. We need focus on initiatives that will propel agriculture as the chief contributor to economy, and a time-bound plan for diversified growth of the farm and allied sectors.
Dr Raju Barwale,
Managing Director, Mahyco.
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