Krishi Kalyan Cess: Need or an Imposed Vote Liability?

  • 2 September 2016 | 1163 Views | By Mint2Save
Krishi Kalyan Cess

Our nation, India, is known as agriculture based/ prominent country since long. Obviously , the whole economy of India is based on agriculture. Not only this, our culture, civilisation, social structure,festivals and rituals are dependant on agriculture  and, different and varied colours of regional culture etc., are according to type and quantum of crops available in the region/part of the nation. That`s why our nation enjoys the boastful diversity in culture but still unity amongst.

But, inspite of agriculture being the principle and foremost occupation, the condition of farmers is pitiful as can be understood by the fact that despite an ever increasing demand of all types of agriculture products in the country and, ever increasing agricultural  production/ yield the living standard of all but the farmers have increased substantially. The cost and profit of almost all commodities have increased, benefiting producers and consumers  but, the sector of farming has become less lucrative and profitable for farmers.

The Govt. of India, having realised the plight of farmers and farming sector, has introduced a sort of new tax to be levied from the tax payers as “Krishi Kalyan Cess” to be collected and spent for the upliftment of farmers and farming sector(in nut shell the agriculture) of our country . One may feel that it`s sort of mandate for each tax payer to contribute in the upliftment of farming sector and farmers, true ,but, a step towards benefit of all as well, as each of us is invariably dependent on agriculture for quenching the hunger, to ensure survival.

All taxable services are bound contribute at a rate as small as 0.5% , only. But, this little contribution is expect to fetch  around 5,000 crore to be accounted for and spent explicitly for the upliftment of agriculture sector in India, during financial year 2017 and, is expected to increase further.

Imposition of this tax has put the government in middle of some inevitable and tough questions. Being an agriculture oriented country, we do have a lot of policies that promote agriculture in every field. From easy finances that include term as well revolving credit, to subsidies, insurance and minimum price mechanism, agriculturists have been supported in every possible way.

Yes, these measures were insufficient to address the needs of the farmer, but charging everybody for it does not justify anything. For instance, manufacturing industries are already burdened with various taxes and high costs. Krishi Kalyan Cess, though merely at 0.5%, does create a lot of burden when there are higher  costs involved.

There can be better alternatives put into work that this cess. Some of which are:

  1. Varying Tax: If this cess is very necessary, the government can create a varied tax structure where the percentage of tax depends on the service/product. For instance, someone availing a necessity such as internet, power, water etc., there is no need to put an extra cess. On the other hand, when someones goes a royal resort or high end restaurant, he can be charged extra for he is already able to afford an extra lavish life. Differentiated tax structure can be followed.
  2. Direct Benefit Schemes to Farmers: Funds collected from this cess are directly employed for farmer fulfilment. However, if they are so needy, government can create a tax rebate cum donation scheme for farmers. This way, tax payers can voluntarily donate for a noble cause and earn the benefit of tax rebate too.
  3. Infrastructure Improvements: The contrasting feature in geography keeps one area flooded while other barren with drought. Not just farmers, but even those in service industry suffer due to this. If the infrastructure gets improved in such a way that no water excess or shortage (may be a large irrigational project) is there, we can solve one of the most basic problems that Indian farmer suffers from.

Imposing new taxes, shuffling up economy is not going to work, until and unless the improvement in the lives of the most hardworking profession, farming, gets a makeover. So far, this cess has done nothing but increase the financial burden on the common man. Are we ready for a change? Do we need something more revolutionary than just tax or subsidies?

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