Should agriculture be taxable in India?

Discussion in 'Politics & Society' started by afako, Dec 10, 2018.

  1. afako

    afako Hindufying India Senior Member

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    As per the current Income Tax law,

    1) Any Income from Agriculture is Exempt from Tax.

    2) Any gains arising from sale of Rural Agricultural Land is Exempt from Capital Gains.

    Politically,

    1) Loans to Farmers are waived off every now and then to the tune of tens of thousands of crores frequently.

    2) Farmers and poor people get extremely cheap ration of food and essentials.

    3) Guaranteed purchase and minimum pricing support from Government for the sale of crops.

    Now,

    The most important receipt in any budget of Government in India Tax - 80% value.

    This tax whether direct and indirect tax - the lion's den comes from the 8 or 10 Metro Cities in India.

    My Questions,

    a) Does Urban India get a fair share of what productivity and taxes it generates?

    b) Will taxing the farmers make them productive and accountable for their own?

    As Trump says it, you should not be shortchanged.
     
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  3. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    Yes, for big farmer having more than 10 bigha land.
     
  4. Haldiram

    Haldiram Senior Member Senior Member

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    Yes, it should be taxable.
     
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  5. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    that big farmer would then declared those farms in name of his wife-sons-daughter-daughter-in law to show individually that each of them owns land less then 10 bigha
     
  6. Haldiram

    Haldiram Senior Member Senior Member

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    Correct. Income tax should be on income, not on land or assets. Otherwise big industries like oil refineries who have very heavy assets would be paying heavy tax even when oil is in a slump.

    Tomorrow multinationals like Godrej Agro and Reliance Fresh can start buying large swathes of land and undertake large scale mechanized farming to secure their supply chain and source their vegetables from their own farms and sell it in their own malls and eliminate not just middlemen, but farmers themselves and the whole operation will be tax free, as per current tax laws. Farmers aren't doing a favor to society by doing farming. They are doing it inefficiently, which is why other tax payers have to bear the brunt of it. This complacency is because they are not under obligation to pay tax. If they are taxed they either have to make a profit that is above the tax level or if sell the land to a corporation who can do it efficiently.
     
    Last edited: Dec 11, 2018
  7. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    That will change the ownership. They can not risk it.
     
  8. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    Yes you are right but what would this job less farmers and their family would do .initally they might get supported by money received from sale from agriculture land but i wont last long .... may be 10 years what after that


    Thats why one must have manufacturing industry base which can provide job to large population...

    Indian missed bus...

    And with myopic leaders its goin to miss busss again ...

    and one IA take over ...its all over
     
  9. Haldiram

    Haldiram Senior Member Senior Member

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    They can get jobs in the same farms when the big companies take it over. As it is, they are working inefficiently in their own farms. Tomorrow, they can work efficiently under proper management using scientific agricultural techniques. The companies should be allowed to set up food processing plants right inside the farm (ketchup, chips, pickles, vegetable packaging, marketing, advertising units). All of this can be within the farm and will require significant manpower.

    If not all, then at least 30% of the existing agricultural land must be taken over by PSUs and private companies from the inept farmers to cater to the food security of the nation, so that farmers unions cannot blackmail the government by causing food inflation every time an election is near. This strategic reserve will provide food security, employ landless farmers who are currently being exploited by land owning farmers and keep both, the vegetable-market middlemen and errant farmers in check. The arrogance of land owning farmers is such that they would neither do it properly themselves, nor would they pay their labor properly, nor would they allow another organization to do it properly, but they would beg for subsidies and loan waivers whenever there's a loss, which happens every year.
     
    Last edited: Dec 11, 2018
  10. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    I do not think that would be possible .. because

    1>companies would decide where they want to setup industry .Not necessary that they would set up in farm

    2> even if they setup most of the jobs would mechanised (more then 60 % ot it) so most wont get any job
     
  11. Haldiram

    Haldiram Senior Member Senior Member

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    They are currently losing revenues because the industries are far away from farm, in government designated industrial areas. It's the government that has forced them to set it away from the farms. They lose a lot of revenues due to transportation and storage costs. If the industry is right in the middle of the farm, they can package it and start shipping it right from the farm.

    Mechanization creates more jobs, but elsewhere. For example, if 100 people were employed in low quality tilling and digging, and if they are replaced with 1 tractor, then the tractor industry creates those 100 jobs (mechanic, repairman, etc). To the naked eye, it would appear like the 100 farmers have suddenly disappeared, but they have shifted to the tractor manufacturing plant.

    Take a look at Amaron battery plant. They hired local villagers in their plant. These people were farmers earlier, now they are working in a plant that supplies batteries to tractors etc.



    There's no excuse to doing things inefficiently and begging for tax payer funded loan waivers and subsidies every year. The money for these freebies is coming out of the pockets of middle class tax payers. When the government redistributes income from one section of the society to help out another section, this help is premised on the assumption that the group being helped today will give back to society later. If one gives subsidized education to a student, there is an expectation tomorrow he might become a scientist and be of use to the nation. But what if that student turns out like Kanhiya Kumar? that's what the farmers are doing with our subsidy. How can someone make loss after loss every year and still expect a bailout and not expect to be questioned?
     
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  12. pankaj nema

    pankaj nema Senior Member Senior Member

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    Agriculture is very high risk low gain
    Profession

    The large farmers in fact help out the small farmers and landless labourers from their surpluses , and invest in Rural economy

    Agriculture generated only 15 percent of GDP and supports 60 percent population
     
  13. Haldiram

    Haldiram Senior Member Senior Member

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    Now reverse that statement.

    60% of the population produced only 15% GDP.

    That's quite inefficient.

    Compare that to the US, where it employs only 11% of the population and produces 5% of GDP.

    It gets even worse considering that their population is less than us and GDP is bigger than us so it's 20 million American farmers producing 1 trillion USD, versus our 600 million farmers producing 20 billion USD.

    [​IMG]

    [​IMG]

    These farmers would rather throw away food and milk instead of giving it to the needy.

    [​IMG]
     
    Last edited: Dec 11, 2018
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  14. Dark Sorrow

    Dark Sorrow Respected Member Senior Member

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    Agriculture should never be made taxable. Its the only thing working for us now. We know hat ever happens we will have food on our plates unlike some countries who have problem of feeding its population until country like India send them food.

    Strong agriculture is basic requirement for any developed nation.
     
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  15. Dark Sorrow

    Dark Sorrow Respected Member Senior Member

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    You are forgetting the fact that they feed an entire nation. Because of them we don't have to rely on someone else for food.


    Who will pay for labor and transport cost? This is why they dump their produce.
     
  16. Indx TechStyle

    Indx TechStyle War Mongerer Veteran Member Senior Member

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    Off course it should be, divide farmers in income levels like you do with salaried men.

    Tax whoever's income exceeds 2,50,000 annually.
    As a result of concentrating maximum labor in this, you have to import everything else. More important, this doesn't give profits.
    People have to pulled out of this to other sectors and private firms should be given with this industry who can bear losses.
    Seriously, every business pays for its labor & transport. If farmers can't, means their work isn't viable. Either improving or leaving business is answer.
    Getting waiver on loans is pure wastage of money, a result of emotional drama narrative about farmers created in India.
     
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  17. Project Dharma

    Project Dharma meh Senior Member

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    Income tax combined with a consumption tax is just highway robbery. I am surprised more people don’t protest against it. Pay tax when you make money, pay tax when you spend money. And yes, farmers are not special snowflakes. They should be taxed just like other people.
     
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  18. afako

    afako Hindufying India Senior Member

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    Farmers are romanticized in Independent India just like Poverty.

    They are nothing uber speical people. They don't deserve anything more than you and me deserve.

    They grow food. While the rest do everything else.
     
  19. afako

    afako Hindufying India Senior Member

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    If 60% of employees achieved 15% of a company's productivity, then I am pretty sure 50% of the employees are going to be fired the next day.
     
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  20. Dark Sorrow

    Dark Sorrow Respected Member Senior Member

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    Idea is good on paper but not practical to implement. First of all farming is all cash business. Secondly income is not linear or predictable and is extremely irregular, so how are you going to identify income levels!!! Fo9r a particular harvest you may make millions and next harvest you find it difficult to afford 2 meals a day.
    On the contrary agriculture is giving employment to many individuals. Which sector you plan to accomdite this so-called surplus man-power and what you plan to stop importing after you get this so-called surplus man-power. With unemployment on rise it's wrong to criticize that you don't have manpower to build other sector as agriculture is hogging man-power.
    I take you haven't done forming or seen farming up-close. A farmer will only grow and harvest his produce. Collection, transport and selling is done by other set of individuals. No farmer bother's himself with these task.
    If a farmer tries to sell his produce directly he will end up ruing his next cycle's produce and his farm in general.
     
    Last edited: Dec 11, 2018
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  21. Project Dharma

    Project Dharma meh Senior Member

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    Not sure why you think this is a problem. The farmer would be in different tax brackets each year just like regular people.
     

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