Give tax benefits to pvt firms investing in agri R&D: FICCI

With farm production contracting in the third quarter of the last fiscal, industry body FICCI has demanded that the government should impose tax on corporates after deducting 150 per cent of their investment in agri research and development.

"Treat 150 per cent of investment by private sector in agri research and development, as deduction of expenditure," FICCI said. It has also demanded a similar treatment on investments by private sector in agri-extension.

The agriculture sector registered a 2.2 per cent fall in output in the third quarter of FY'09. The decline comes after a 2.4 per cent fall in kharif sowing and, it comes over a high base since the corresponding quarter a year ago had seen a growth of 6.9 per cent.

In a paper on investment and reform in agriculture R&D, it said projects under public private partnership (PPP) in research and development in the agriculture sector should be increased to boost productivity which is lower in comparison to developed countries.

"...Developing PPP, and grant of research fellowships coupled with relaxation of regulatory controls, developing a new policy framework that encourages stronger intellectual property rights for commercial crops are some of the vital policy changes that are imperative to give fresh impetus to the agri R&D sector," FICCI said.

Efforts have to be made to bring renowned inventions related to agriculture developed by other countries and improvise on them, it said.

India's crop yields are between 35 and 50 per cent below world averages, the FICCI paper said. Within India, there are differences in the yield of eastern India states and those in northwestern regions such as Punjab, Haryana and western Uttar Pradesh.

Several factors account for lower productivity of rice and wheat in eastern India. "The most significant factor includes micro nutrient deficiencies, poor seeds, improper irrigation and technological breakthrough," it said.