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No tax on agriculture income: Jaitley

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  6 May 2016 12:00 AM GMT

NEW DELHI, May 5: The central government on Thursday outright rejected suggestions from some opposition members to bring agriculture income under the tax net, saying this is not being considered at all.

Replying to the debate on the Fince Bill, 2016-17 in the Lok Sabha, Union Fince Minister Arun Jaitley asserted that despite global recession, the Indian economy is doing well. He maintained that it can do much better, provided there is a good monsoon and the government is able to address the vexed issue of non-performing assets (NPAs) of banks.

“Vishwa ke tul mein hum sabse aage haen (in comparison to the rest of the world, we are far ahead),” Jaitley said.

“After two years of drought, if the forecast of better monsoon rains this year holds good, it will improve agriculture,” he said.

The minister said a good monsoon will add to the rural economy and thus the economy - which had been expanding on strength of public investment, the highest foreign direct investment (FDI) and urban demand - can only grow faster.

He pointed out that despite the global recession and uncertainty prevailing on how long the crisis will remain, India still continues to maintain a high growth rate at 7.65 per cent in 2015-16 compared to 7.2 per cent in 2014-15.

On the suggestion about introducing tax on agricultural income, he said that, firstly, large farm-based income was rare and people using agriculture as a front to hide income from other sources need to be dealt with by the tax authorities. But he said under the federal structure, the state governments have the power to impose such agricultural tax and counselled Biju Jata Dal floor leader B. Mahtab that it will be ill-advised for the Odisha government to do so.

During the debate on the Fince Bill on Wednesday, Mahtab had asked: “Does it make any sense providing support to the big farmers, not taxing the agriculture produce of the farmers is one thing but not taxing the companies who are earning thousands of crores of rupees?” Even Trimool Congress member Saugata Roy had said that rich farmers should be brought under the tax net to widen the tax base.

On the issue of one per cent excise duty on non-silver jewellery, the fince minister ruled out its rollback, saying the levy was not applicable on small traders and artisans. Only those jewellers with more than Rs 12 crore turnover will attract the duty, he said.

Jaitley conceded that bad loans are an issue and the NPAs of banks remain a matter of concern for his government.

“I would not like to go on a blame game on this. But, we cannot solve the problem of NPAs by hiding it,” Jaitley said, stressing that the government is taking steps to bring the banks out of the NPA mess.

He maintained that loans that have been lent without proper due diligence will be investigated, and said NPAs need to be reflected in the balance sheets and subsequently addressed through capitalisation. (IANS)

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