"Sheep, like
people, are ungovernable when hungry."
—John Muir (American, 1838-1914)
Word
for the day
Green-Collar (adj)
Noting or pertaining to workers, jobs, or businesses that are involved
in protecting the environment or solving environmental problems.
Malice
towards none
You speak one lie
100times, and people start believing it to be true.
This adage does not
seem to be applying to AAP.
The more they lie,
the more people disbelieve them. So much
so that many have started discounting their truths also.
First random
thought this morning
Our government seems to be pushing the Make in India
policy hard. Reportedly, it now wants all government procurements to be sourced
locally. It also wants metro trains to have at least 75% local content. It
sounds like a great idea.
The small problem is that many of our large trade
partners like USA also seem to be copying our idea of localization, and many of
us are not liking it.
An American investor who recently visited Patanjali
facilities in Haridwar, got the impression that this desi enterprise certainly
has tacit support of thegovernmen (States and Central). If global corporations
like Coke, Pepsi, HUL, Nestle, P&G etc. get hit due to this, this pain will
certainly reflect on likes of TCS, Infosys.
Taxing farmers may yield nothing
Tax on agriculture income is one
of the favorite topic of market economists and strategists. Most of them
believe that by taxing agriculture income, the government could materially
improve its fiscal position.
In my view, taxing agriculture income would add only an
insignificant amount to the government's kitty. Anyone betting big on taxation
of agriculture income may perhaps need to spend 6months in any village of the
country to understand what I am trying to suggest.
About 40% India's total population is directly dependent on
farming. As per the latest available NSSO survey (70th Round, June 2013), the
country has about 90.2 million agricultural households.
Among the major States, Rajasthan has highest percentage of
agricultural households (78.4 percent) among its rural households followed by
Uttar Pradesh (74.8 percent) and Madhya Pradesh (70.8 percent). Kerala has the
least percentage share of agricultural households (27.3 percent) in its rural
households preceded by other southern States like Tamil Nadu (34.7 percent) and
Andhra Pradesh (41.5 percent).
Close to three fourth of these farmers belong to OBC, SC and ST
category. Two third of these farmer household have crop cultivation as their
primary source of income. 22% of these household survive on wages. While the
others have livestock and agri related activities as their primary source of
income. About 44percent of estimated agricultural households have MGNREG job
card.
Average monthly income of the agricultural households, including
net receipts from cultivation, farming of animals, nonfarm business and income
from wages/salaries, during the agricultural year July 2012- June 2013 was
estimated as Rs.6426/per household (Average 5people).
About 52 percent of the agricultural households in the country are
estimated to be indebted. The average amount of outstanding loan per
agricultural household was Rs.47000/- (approx.).
Among the major States, Andhra Pradesh had the highest share of
indebted agricultural households in the country (92.9 percent) followed by
Telangana (89.1 percent) and Tamil Nadu (82.5 percent). Assam (17.5 percent),
Jharkhand (28.9 percent), and Chhattisgarh (37.2 percent) were the major States
with lowest share of indebted agricultural households.
The average amount of outstanding loan was highest for Kerala
(Rs.213600/-) followed by Andhra Pradesh (Rs.123400) and Punjab (Rs.119500).
Assam (Rs.3400), Jharkhand (Rs.5700) and Chhattisgarh (Rs.10200) were the
States with lowest amount of average outstanding loan.
About 83% (80% in 2003) of the total farming households in India
are either landless or marginal (holding less than 1 hectare or 2.47 acres
cultivable land). The average gross cropped area per agricultural household is
period 0.937hectare (2.31 acre). The average value of production (which
included value of harvested crop, pre-harvest sale and value of by-products)
per agricultural household during the period was Rs.40580/-.
However, if we adjust this average income for the loss due to crop
damage due to natural causes (at least once in three years), the average income
per farmer household will be much lower.
It is most pertinent to note that this income does not account for
the cost of self-labor and own seeds used.
As the following table shows, only 0.24% or appx 2,15,000
agriculture household are large farmers (owning more than 6hectare cultivable
land). They collectively own approximately 5.8% of the total cultivable area.
Assuming that they earn more than average farmer household income of
Rs41000/hectare per crop, and are able to take three crops every year, the
average income for the large farmer household may not be more than Rs41000 X
3crops X 6hectare=Rs7,38,000. Dividing this income between two adult members of
the house and adjusting for expenses like depreciation on equipments, interest
on loans, and one bad year in five years, the government may not get virtually
any tax.
I understand that there are numerous cases of false reporting of
agriculture income to convert black money without any tax.
There are some large farmers, who hold large chunks of Benami
Land, and may be earning much more than the averages mentioned above.
But these are anomalies. These need to be handled as such. Making
a rule based on these exceptions may not yield much results.
As such, agriculture is a totally unviable business in India. With
over 40% population engaged in an unviable and least productive business, an
economy cannot be expected to grow faster on sustainable basis.
If we want Indian economy to grow faster on sustainable basis,
supporting restructuring and reorganizing India's farm sector is a
pre-requisite.
...to continue
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