Boost to ‘Atmanirbharta’ In Agriculture: Nirmala Sitharaman Proposes Import Cess On Crude Edible Oils, Chana, Peas

Union Finance Minister Nirmala Sitharaman has come up with proposals that will encourage ‘Atmanirbharta' (self-reliance) in key agricultural crops such as oilseeds and pulses that the country now imports to meet its burgeoning demand.

These proposals are not only aimed at protecting farmers but also at achieving self-sufficiency in the areas of oilseeds and pulses.

While self-sufficiency in oilseeds will ensure import of cooking oils is minimised, self-sufficiency in pulses will lower shipments of peas, chana and other such produce that is brought into the country to make for the production shortfall.

The Finance Minister has proposed the setting up of Agriculture Infrastructure and Development Cess (AIDC), which will also strengthen the infrastructure of Agricultural Produce Marketing Committee (APMC) mandis.

This is a strong counter to opposition parties and farmer organisations that have been carrying out a campaign against the Narendra Modi government that the agricultural reforms carried out last year would result in APMCs winding up.

“To benefit farmers, we are raising customs duty on cotton from nil to 10 per cent and on raw silk and silk yarn from 10 per cent to 15 per cent. We are also withdrawing end-use based concession on denatured ethyl alcohol,” Sitharaman said, tabling the 2021-22 proposals.

The customs duty on cotton is more of a psychological boost for farmers since India imports only extra-long staple cotton these days from the US, Egypt and Australia.

According to the Cotton Advisory Board, a body comprising cotton growers, traders, users and government representatives, India will likely import 11 lakh bales (170 kg each) this season (October 2020-September 2021). Five lakh bales have been imported so far this season.

India has a huge carryover stock of cotton of over 100 lakh bales, while production has been pegged at over 350 lakh bales.

Mulberry farmers and silk weavers will gain from the five percentage points increase in customs duty to 15 per cent.

Growers of sugarcane, maize and paddy will benefit from the 2.5 percentage points increase in customs duty on denatured ethyl alcohol.

Maize and paddy growers will also gain from the customs duty being raised to 15 per cent from zero on maize bran and de-oiled rice bran cake.

In view of AIDC being imposed on some of the agricultural imports, the Centre has rationalised the customs duty on produce such as apple, crude palm, soybean and sunflower oils, peas, Kabuli chana (gram), Bengal gram and lentils to ensure it does not pinch the consumers.

Apple imports will now attract a basic duty of 15 per cent from the earlier 70 per cent.

AIDC proposed on crude palm oil is 17.5 per cent, while on crude soybean and sunflower oils it is 20 per cent.

For apples, the cess proposed is 35 per cent, 40 per cent for peas, 30 per cent for Kabuli chana, 50 per cent for Bengal gram, and 20 per cent for lentils.

The cess on edible oils such as crude palm, sunflower and soybean oils will help oilseeds farmers fetch better prices for their produce as rising imports have had prices on leash.

India imports over 15 million tonnes of edible oil with palm oil accounting for two-thirds of it.

It will also save a good amount of foreign exchange outgo, spent on buying the oils. Annually, India nearly spends Rs 70,000 crore on buying these oils.

Sitharaman has proposed to set up an agriculture infrastructure fund, which will get the fund from AIDC. It will help augment infrastructure facilities at the APMC yards.

The Centre has also proposed to raise the exemption limit for agriculture income to Rs 2.5 lakh from the earlier Rs 5,000 in the overall computation of income tax of individuals.