No tax cuts for pesticide industry in 2007 budget

the 2007 Union budget has brushed representations for tax reliefs from the pesticide industry. While environmental groups are relieved, pesticide manufacturers have criticised the government's position.

In a pre-budget memorandum, pesticide manufacturers had demanded that excise duty be reduced from the existing 16 per cent to 8 per cent and had contended that the reduction would help farmers secure their crops and save Rs 18,000 crore worth of crops annually. But ministry sources say the government would incur a revenue loss of Rs 112 crore if they cut excise duties. "Most pesticide dealers sell their products below the maximum retail price to lure farmers. This means, despite the current excise duty, there is a hidden hike and then a huge margin,' says Kavitha Kuruganti of the Centre for Sustainable Agriculture, Hyderabad. Besides, even if industry is concerned about farmers, it can cut down costs by economising on marketing and advertisement budgets. The industry is thriving on exports to South Asia anyway, she says.

Some feel that the government's decision might have been influenced by multinationals that have started looking at a potential transgenic life-science market after a shift from the chemical market. According to Umendra Dutt, executive director of Kheti Virasat Mission in Punjab: "The consumer is in stress. Hence, rebate should be given to promote only eco-friendly pesticides.'

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