United Planters’ Association of Southern India (Upasi), the apex body of planters in south India, has made a strong pitch for overhauling of the Plantations Labour Act (PLA) 1951, saying that it is archaic.
Plantations are governed by the PLA through which the industry provides housing, sanitation, water supply, crèches and medical care for workers.
“PLA was enacted at a time when plantations operated in extremely remote areas with no external infrastructure support. Today plantation areas are no longer rural but semi-urban. As such, the legislation has lost its relevance, is a burden on the production cost of plantations and makes Indian plantations uncompetitive internationally,” Upasi president N Dharmaraj pointed out.
Upasi said that plantation business in India is pegged at R43,000 crore and it employs 24 lakh people besides playing a significant role in supporting the rural infrastructure.
“PLA therefore needs to be amended and many government schemes which are available to take care of the facilities provided under the PLA should be extended to the plantations” Dharmaraj said.
In its pre-Budget memorandum to finance minister Arun Jaitley, Upasi demanded until changes are made to the PLA , all expenses under this category should be given weighted deduction to the extent of 200% of the expenditure. The memorandum drew the minister’s attention to the significant role of the plantation sector in the economy, especially the large number of workers it supports in backward regions. “Unless and until there is guaranteed stability to the sector, it is going to be very difficult to enthuse interest and draw fresh investments to the sector,” it said.
Despite plantation business being an integrated agricultural and manufacturing operation, it is unable to get input credit on agriculture operations under VAT. “This may be allowed under the proposed GST,” Dharmaraj added. Further, he requested that the plantation commodities be placed as a necessary item of basic importance with rate aligned to the prevailing VAT rate of 5%.