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Sambalpur, July 18: The Centre can immediately pass on amounts ranging between `100 and `225 to farmers on minimum support price (MSP) of paddy without imposing any additional burden on the exchequer.
Post implementation of Goods and Services Tax (GST) July 1, the Centre won’t have to pay tax to state governments on purchase of paddy at local mandis, as it did before July 1. The state level tax hovered between the lowest 6.22 per cent of MSP in Bihar and the highest 14.50 per cent of MSP in Punjab. In case of Orissa, this was pegged at 9.13 per cent of MSP.
At a minimum support price of `1,550 per quintal, the 9.13 per cent tax burden works out to `142 in case of Orissa — an amount it would stop paying the state government now towards local tax on MSP. With the additional ` 142 on every quintal of paddy purchased at mandis, the cost of paddy procurement for the Centre went up to `1,692 in Orissa, while it cost `1646 per quintal in Bihar and `1775 in Punjab.
If the Centre wants to help the farmers, it could pass on this money to farmers. In case of Orissa, farmers in the state would immediately get an MSP of `1,692 per quintal of paddy. Earlier, the Centre raised the paddy MSP by `80 per quintal, taking the MSP in Orissa to `1550 – far below `2,950, the MSP demanded by the BJD government in Orissa.
While the Centre is in no mood to look at the state government’s proposal, it can still pass on this savings to farmers. “This won’t entail any additional burden on the Centre as it already paid this to state governments towards local tax,” said Natabar Khuntia, a retired banker and an agriculture expert.
The state government may write to the Centre to pass on this benefit to farmers even though it would make a dent in its revenues. As per GST rules, the Centre would compensate states for whatever losses they would incur post GST for five years. However, the government can still recommend to the Centre for this to boost its image among the farmers.
“This is a golden opportunity for the state government to prove its sincerity for the farmers’ cause. If it is really sympathetic to the cause of farmers, it should immediately take up with the government the issue of passing on this benefit to farmers,” said Ahsok Pradhan, convener of Western Orissa Farmers’ Coordination Committee.
However, the state government is clueless about it. “We have no clarity as yet on this. We will inquire into this,” said Surya Narayan Patro, BJD spokesperson and minister of food supplies and consumer welfare.
