To curb rising labour shortages in view of MGNREGA, the government today proposed cutting import duty on a wide range of farm equipment like sugarcane planter and coffee processing machines.
"Carrying forward the initiatives taken for agriculture and agro-processing in the previous Budgets, I propose to reduce basic customs duty from 7.5% to 2.5% on sugarcane planter, root or tuber crop harvesting machine and rotary tiller and weeder," Finance Minister Pranab Mukherjee said in his Budget speech.
He said the lower import duty would be applicable on imported parts of these equipment which are to be manufactured in the domestic market.
The minister announced a reduction in import duty from 7.5% to 5% on specified coffee plantation and processing machinery.
To boost production of fruits and vegetables, the Finance Minister said the project import benefit at concessional import duty of 5% would be extended to green-house and protected cultivation of horticulture and floricutlure crops.
That apart, the concessional import duty, which is available for installation of Mechanised Handling Systems and Pallet Racking Systems in mandis or warehouses, is also extended to horticultural produce.
To enhance availability of fertilisers, the government fully exempted import duty of 5% on equipment for new and brownfield fertiliser projects, for a period of three years up to March 31, 2015.
The government announced investment-linked deduction for setting up of warehouses to store sugar.
The Mahatma Gandhi Rural Employment Guarantee Act, or MGNREGA, has noticeably impacted increase in farm wages and added to a farm worker availability crisis ever since the scheme was kicked off five years ago, experts said.
Reacting on the budget proposals, Indian Sugar Mills Association Director General Abinash Verma said, "The reduction in custom duty on sugarcane planter will help overcome the labour shortage. Farmers will now be able to plant and harvest their crop on time."
The tax incentive on investment in sugar warehousing would help to enhance storage capacity.
Hailing the Budget proposal, Indian Coffee Trust President Anil Bhandari said, "It is a good move to reduce import duty on coffee equipments. This will boost growth of retail consumption of coffee."
