Individual income from agriculture is not taxable in India. This tax waiver is called "farm subsidy". Also, capital gains arising from the sale of agricultural land is not taxable. It is always funny to see economists debate that India should remove farm subsidy to compete with other countries on an "even" field. This is a constant topic in all trade talks.
Many of us know the reality. This subsidy means nothing to farmers in India. Actually agricultural income is only a smoke-screen for politicians, bureaucrats, business owners and people in private sector that earn money in kick-backs, bribes and any other unethical way. These (not usually farmers) own farm land, hide their dirty income. When they are raided by income tax officials (purely out of bad luck or vendetta), they approach courts, say the unaccounted income is from agriculture and hence was not taxable. If only all this unaccounted wealth were to be generated in agriculture, then agriculture would have been the most chosen profession.
Any economist who thinks the farmers in India are getting undue advantage against their peers elsewhere by farm subsidy must be crazy, for much of the land is owned (read encroached, squatted, etc) mostly by non-farmers and it is they that are getting benefited.
A reality check is definitely required...
More later,
K Venkatesh
Many of us know the reality. This subsidy means nothing to farmers in India. Actually agricultural income is only a smoke-screen for politicians, bureaucrats, business owners and people in private sector that earn money in kick-backs, bribes and any other unethical way. These (not usually farmers) own farm land, hide their dirty income. When they are raided by income tax officials (purely out of bad luck or vendetta), they approach courts, say the unaccounted income is from agriculture and hence was not taxable. If only all this unaccounted wealth were to be generated in agriculture, then agriculture would have been the most chosen profession.
Any economist who thinks the farmers in India are getting undue advantage against their peers elsewhere by farm subsidy must be crazy, for much of the land is owned (read encroached, squatted, etc) mostly by non-farmers and it is they that are getting benefited.
A reality check is definitely required...
More later,
K Venkatesh
1 comment:
I totally agree with KV's view on this topic. In fact all Major Business houses and Industrialists are on a lookout out to grab agricultural land, either to make a SEZ out of it or retain it for future investment purpose.
I believe that "politicians, bureaucrats, business owners and people in private sector" have more vested interests in these lands than the Agriculture trade itself !
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