Set Up Development Bank For Plantation: Says Upasi

New Delhi, December 24: | Updated: Dec 25 2002, 05:30am hrs
The plantation sector has demanded setting up of a national plantation development bank for financing and refinancing the sector. Apart from several fiscal sops it sought, the sector has also demanded that all plantation imports, either for domestic consumption or for re-exports should attract customs duty or alternatively a minimum value addition equal to the prevalent import duty. Machineries needed by the sector for tech upgradation should be allowed duty-free imports, it added.

In a pre-Budget memorandum to finance minister Jaswant Singh, United Planters Association of Southern India (Upasi) secretary-general Ullas Menon said the sector is quite different from ordinary agriculture. The sector is not only involved in agriculture but also in processing, value addition and marketing.

Long gestation period is involved before the first crop comes in and substantial investments are required for long life of plantations. In the current situation Nabard extends refinance to the sector treating it as ordinary agriculture. Hence, in this context, it is logical to set up a national plantation development bank for the purpose.

Mr Menon alleged that duty-free import for re-export of plantation goods has not fulfilled the purpose as they are re-exported hardly with any value addition and there is no real gain by way of additional forex earnings. Revenue loss on account of waiver of import duty on tea and coffee alone is 108 per cent. Hence there should be no duty-free imports of tea, coffee, cardamom and pepper for re-exports. Pending review of this policy, minimum value addition should be prescribed which should be equivalent to the existing import duty, he said.

The memorandum also demanded abolition of excise duty on tea for South India, removal of the dichotomy of taxing the same income from natural rubber through central income tax and agricultural income tax. He also urged that benefits of Rule 7B of the I-T rules be bestowed by bifurcating business income and farm income for coffee should be extended to small growers.