Price Of A Plough Share

Will farmers finally come under the tax net or not? BJP vice-president Jana Krishnamurthy has stirred the hornet’s nest ever since he expressed what is now learnt are his personal views. The answer, however, remains with Yashwant Sinha.

Or does it? Don’t we know that agriculture is a state subject and that state governments don’t want to touch a lobby that’s not only a big votebank for them, to be plied with cheap water, power, fertiliser and loans, but also a main source of the state domestic product? Also, as taxation legend Raja Chelliah always points out, with the kind of accounts our farmers keep, administering a farm income-tax would be mind-boggling and expensive.

But why can’t one have a minimum tax? If corporates had been a victim of it in P. Chidambaram’s regime, why should the farm sector, the most privatised and highly entrepreneurial in the country, be immune to it? Especially since, as J. Shettigar, convenor of BJP’s economic cell, argues: "The farmers aren’t looking for state support". He feels while the time isn’t yet ripe for taxing rich farmers, whose prosperity hinges on the degree of rainfall, there’s definitely a case for taxing their non-farm income.

Says agriculture economist Ashok Gulati: "We have a long-standing demand of reforming the sector and trimming subsidies. But the government will do what it wants to do." That is tax farm income in a desperate bid to broaden the revenue base, without recognising that because of these farmers, Indians spend less of their income on food than they did immediately after Independence.

A farm tax is still far, but the state can strike a golden mean by removing exemptions on interest accrued in postal savings-most Vikas Patras are rural investments. That will be half the work done.