The government on Friday informed Parliament that there is no yardstick to determine the financial status of rich and poor farmers. This assumes significance amid demand by many experts to bring rich farmers under the income tax (I-T) net. Since there is no such yardstick, details about number of rich and poor farmers in the country are not there, agriculture minister Narendra Singh Tomar said in a written reply in the Rajya Sabha.
The minister also said that Section 10 (1) of the Income-Tax Act, 1961, provides that agricultural income is not to be included in the total income of any person.
Asked whether all the farmers are entitled to get farm equipments and seeds, etc., on concessional rates (irrespective of their financial status), the minister said: “Government is providing subsidy on fertilisers, seeds, agricultural equipments and machinery, irrigation and solar pumps to make it beneficial to the farmers by reducing the cost of farming.”
However, Tomar also said that one of the objectives of the Sub-Mission on Agricultural Mechanization (SMAM), started in 2014, was to increase the reach of farm mechanisation to small and marginal farmers and to the regions where availability of farm power was low.
For the purpose of arriving at the average annual income for 2015-16, which is the base year, the Dalwai Committee on Doubling Farmers’ Income extrapolated the NSSO 2012-13 survey and estimated that average farmers income was Rs 96,703 per year at 2015-16 prices. No survey has been conducted, nor has any interim assessment been done since the last Situation Assessment Survey of 2012-13, according to a recent reply in Parliament.
In 2017, Niti Aayog in a draft policy paper, circulated to states, had proposed to bring agricultural income, above a threshold, within the ambit of personal income tax net with the objective of reducing the overall tax rate. The threshold could be the average income over a period as it could vary every year.
As per official data, the Indian economy contracted by 7.3%, the sharpest in record history, in FY21. But the agriculture and allied sector remained one of the brightest spots, with 3.6% growth in gross value added (GVA) at Rs 20.4 lakh crore in real terms even on a relatively unfavourable base (the farm sector GVA grew 4.3% in FY20).
Agriculture sector has over 16% share in the country’s economy (GVA).