FICCI calls for tax benefits to firms investing in farm research
27 April 2009
With a decline in farm production in the third quarter of the last fiscal, the Federation of Indian Chambers of Commerce and Industry (FICCI) has demanded that corporates be taxed after deducting 150 per cent of their investment in agricultural research and development. The industry body has asked that the government treat 150 per cent of investment by private sector in agricultural research and development as deduction of expenditure.
FICCI has also demanded that private sector investments in agri-extension be also similarly treated.
The agriculture sector had registered a 2.2 per cent fall in output in the third quarter of FY09. The decline has come following a 2.4 per cent fall in kharif sowing and, it comes over a high base with the corresponding quarter of a year ago registering a growth of 6.9 per cent.
FICCI said in a paper on reform and investment in agriculture R&D that projects under public private partnership (PPP) in research and development in the agriculture sector should be increased to boost productivity which is on the lower side as compared to developed countries.
FICCI said the developing PPP and grant of research fellowships coupled with regulatory control relaxations and developing new policy framework for encouraging stronger intellectual property rights for commercial crops were among the vital policy changes necessary to give fresh impetus to the R&D in agriculture.
The paper said that efforts need to be initiated to bring renowned agriculture related inventions developed in other countries for improvisation to Indian conditions.
According to FICCI, India's crop yields remain 35 to 50 per cent below world averages and within India there are inter-regional difference in the yields of eastern Indian states and those in the northwestern regions such as Punjab, Haryana and western Uttar Pradesh.
The paper adds that there are several factors accounting for lower productivity of rice and wheat in eastern India among them the most significant being micro nutrient deficiencies, poor seeds, improper irrigation and technological breakthrough.