[srini1785]

Originally Posted by aaggoswami

Many of my relatives are in farming. After losing majority of land to government, my grandfather decided not to survive in village, moved out, focused on education, settled in urban landscape.

Without getting personal, this is your family's experience and need not reflect others. Do you think that others who work in say manufacturing , IT, craftsmen, bankers etc are not subject to the vagaries of the economy?. Why single out farming for such special treatment?.

[aaggoswami]

Originally Posted by srini1785

Without getting personal, this is your family's experience and need not reflect others. Do you think that others who work in say manufacturing , IT, craftsmen, bankers etc are not subject to the vagaries of the economy?. Why single out farming for such special treatment?.

Farmers are still dependent on rain and weather in general. For example, this year rains were excessive in Saurashtra region of Gujarat. Normally, they suffer from scarcity of water (till water from Narmada reached there), not so fertile land and hot weather. This year crops are damaged due to excessive rain. The small farmers have difficulty surviving. Same most probably would be the story all over India. Simply put, 50% of population is occupied in agriculture while the contribution to GDP is around 20% or so IIRC. Clearly, not all those farmers have good income.

Farming sector first needs investment in my view before that sector evolves strong enough to take burden of taxation. With only 20% contribution to GDP, am not expecting any huge tax collection. As you rightly mentioned, many are exposed to variations in economy. Anyone in private sector is exposed to financial insecurity, something I mentioned in my earlier posts on this thread. Government just isn't doing enough for social security of those in private sector. Before taxing the farm income, what needs to be done is minimum wage across the country. This should be in tune with salary structure provided to government employees. Such a step would enhance movement of money in the market. Couple that with social security for rainy days by government, what we have a robust underpinnings for a stable, consumption based economy as more people will have disposable income.

[ValarMorghulis]

Originally Posted by V.Narayan

...You have a point of view and you write articulately though rather agitatedly. ... I see no harm in giving them a ear rather than pretending the perfect Bill has been crafted. To bring change it is wise to listen {even if you do not agree}...

Thanks for the feedback sir

As for talking to the farmers, completely agree. The biggest problem of this govt is that even when they do something good they fail to take everyone aboard, i.e. they do not engage in a conversation.

Originally Posted by NiInJa

A longish article, but a balanced explanation about Farmers bill.

https://vivekkaul.com/2020/09/21/why...dly-help-them/

This is an excellent article. Thanks

[V.Narayan]

Originally Posted by ValarMorghulis

Thanks for the feedback sir

As for talking to the farmers, completely agree. The biggest problem of this govt is that even when they do something good they fail to take everyone aboard, i.e. they do not engage in a conversation.

:-) Mind you I agree with your overall view point that by and large this set of Bills are in the right direction. You nailed it on the head with your statement which I've marked in bold.

Originally Posted by srini1785

My 2paise before this thread gets closed:

Please raise your hands , if you think that farm income should also be taxed.

The simple answer is Yes - after setting a liberal floor and allowing for deductions for risk of the next crop being a failure and prep to be done for the next crop. The floor itself will have to be absolute as well as a tiered system above that. Growing food that feeds the masses cannot be taxed as a pure business income. And, others may disagree, but the risks in farming are usually greater than the risks in business. I say this as a retired businessman whose grandfather was a large holding farmer.

[srini1785]

Originally Posted by aaggoswami

... Government just isn't doing enough for social security of those in private sector. Before taxing the farm income, what needs to be done is minimum wage across the country. This should be in tune with salary structure provided to government employees....

Can you give an approximate idea of the cost involved? and also how you are planning on financing such a move without getting into the quagmire of external debt?.

[AZT]

Indian services industry lost some steam in November

BENGALURU (Reuters) - Growth in India’s dominant services industry lost some momentum in November as demand weakened, a private survey showed on Thursday, clouding hopes of a quick economic recovery from the COVID-19 pandemic’s blow.

Asia’s third-largest economy, which fell into recession last quarter for the first time since at least 2012, is expected to recover only modestly early next year and won’t reach pre-COVID-19 levels any time soon.

The Nikkei/IHS Markit Services Purchasing Managers’ Index dipped to 53.7 in November from October’s 54.1 but still held well above the 50-mark separating growth from contraction for a second month.

India’s manufacturing recovery also faltered last month as coronavirus fears weighed on demand and output.

Read More: https://in.reuters.com/article/idINKBN28D0HG

[vivek_lm]

Originally Posted by srini1785

Please raise your hands , if you think that farm income should also be taxed.

I believe it certainly needs to be taxed. Of course, the poor farmers would anyway not be covered since they wouldn't make it to the lowest tax slab.

However, a lot of people evade income tax by depicting income from other sources as farm income. This needs to be plugged. And what's wrong in expecting the rich farmers to pay income tax?

Of course, the farming sector in the country needs to be overhauled with better use of technology etc. to ensure the risks associated with farming are minimized before we can go ahead with the taxation part. It should never be a one-way affair.

[manchandap]

Originally Posted by Dry Ice

Reg middlemen - I have no personal experience of dealing with them, but from what the farmers are saying to the news reporters, they are happy to provide a fee to these people in exchange of all the services they receive - transportation, packaging, price negotiation etc.

I didn't want to jump into this sensitive discussion but the claim of bonhomie between farmers and middlemen has left me wondering ever since the protests started.

@Dry Ice, please don't take personally what I am going to say. I am quoting you for the sake of context.

I have spend my childhood in the agricultural heartland of Punjab but I am not a farmer. So, I have some/limited knowledge of mandi system.

These middlemen are called 'artiyas' in our dialect and run the roost in mandis. This system of artiyas has existed since times immemorial. They buy the produce from farmers and also act their bankers. The artiyas also act as money lenders. Many of these also sell seeds, fertilizers, insecticides, pesticides etc to farmers. The farmers-artiyas relationship runs for generations and is based on mutual trust.

Lots of literature in Punjab, including books, poems, songs, talk about how artiyas exploit the farmers and are responsible for their economic hardships -- Artiyas don't pay appropriate price of the produce, they don't pay farmers on time, they charge high rates of interest that leads farmers into a debt trap that sometimes leads them to suicides.

There is a saying that there was a time when a farmer would be more scared of artiyas' 'bahi-khata' (account/ledger book) then a thanedar (thanedar is police officer in-charge of a local police station)

Believe me, arityas are an influential lobby due to their clout and financial muscle.

That said, artiyas also provide a financial cushion to farmers in the hour of need. We all know how cumbersome it is get loans from banks.

Probably, farmers fear that with new laws the mandi system will collapse and this cushion will be lost. Similarly, artiyas might be thinking about their loss of livelihood.

Moreover, any change is painful and more so if the change targets age old system.

Experts, please correct if I have misstated/misunderstood anything.

[mvadg]

Originally Posted by NiInJa

A longish article, but a balanced explanation about Farmers bill.

https://vivekkaul.com/2020/09/21/why...dly-help-them/

Thanks. Great article and like you stated a very balanced view.

Of course, while reading the article, I saw his books advertised on the sidebar.
I intend to read his book on the Government, which brought on another thought - the expenditure on government employees must be at least a few hundred lakhs of crores - shouldn't they be cutting down when the rest of us are tightening our belts? How about a target? An eighty percent cut in expenditure would not make any noticeable difference in the quality of services from the government, I'm sure!
This would fix the recession too.

[Sebring]

This picture of farmers eating simple food on the floor touched a chord. Representatives of farmers union who had come for talks are not breaking bread with Government negotiators, and this points to a huge mistrust. Now, that's a sign. I doubt if this issue will be resolved

Originally Posted by manchandap

farmers fear that with new laws the mandi system will collapse and this cushion will be lost.

[Sandy Damodaran]

Originally Posted by srini1785

My 2paise before this thread gets closed:

Please raise your hands , if you think that farm income should also be taxed.

Unlike other manufacturing sectors, Farming (including poultry/meat etc) has an extremely variable cash flow attached to it.
For the purposes of taxation, you would typically accrue the future cashflows and pay an advance tax on it. Also a bumper crop is about as damaging to a farmer as a famine. Making an estimate on cash flows factoring in these scenarios would be about as useful as using a coin toss to estimate the cash flows.
Also, given that most of the farming is unorganised any loans taken by a farmer would be off the books, implying he cannot show them to offset his cost of capital.

So in essence if you make a farmer pay his taxes, you would need to create an ecosystem where
A) He can amortize his losses over a long span, say 10 years
B) Create an ecosystem where they can take loans from institutions
C) These institutions should have the power to re-posess the land/security against which the loan is given

In the end it will get in the tax ambit, a small proportion of farmers with large land holdings, who will pay an accountant to wriggle out of taxes(much like large corporations), leave the burden of proof with small farmers who would then have to spend their time and money responding to Babu's whims.
I'd think it's too much hassle for too little gain.

[Sree]

Since we are worried about small farmers getting hit. Why don’t we just exclude them.
Anyway even for income tax - income below a limit is not taxable.
Let us first find out the average size of a farm in India. Let it be x acres.
The government can then say that only those with 10x or even 20 x area need to file tax.

This will ensure that the people who claim agricultural income to convert their black money into white (read politicians) will get caught out while the real farmer will be unaffected.

Dream on. Nothing will happen.

[akhil_007]

Why is a law amendment required? Can it not be done via administrative process OR via (lack of) enforcement? Maintain status quo and at the same time, look the other way if farmers decide to sell outside APMC.
Regardless of where they sell, ensure MSRP is applicable and valid.

This Government tries too hard to codify everything. While that's a good idea, it's not feasible/enforceable/ideal and most importantly they don't choose competent people to do this.

[aaggoswami]

Originally Posted by mvadg

which brought on another thought - the expenditure on government employees must be at least a few hundred lakhs of crores - shouldn't they be cutting down when the rest of us are tightening our belts? How about a target?

India spends 8% of its GDP on government salaries. Source. Which is very high if we consider India's tax to GDP ratio. Also, private sector and public sector growth contribution to GDP should be mentioned separately.

[irdevanand]

Originally Posted by Sree

Let us first find out the average size of a farm in India.

Sir, The average size of a farm in India is exactly 2.6 acres. You will find more details in this article.
https://www.business-standard.com/ar...0101057_1.html

Regards
Dev