Disputed tax waived for cooperative sugar sector, sops for PACS
The announcement of modernisation of primary agricultural credit societies (PACS) and the respite from the disputed income tax pending with sugar factories is expected to give a boost to the agriculture and cooperation sectors in Maharashtra. More than 21,000 PACS in the state will benefit, as they will now get the status of multipurpose societies, while 72 cooperative sugar factories will get their disputed income-tax totalling ₹10,500 crore set aside
The budget presented by finance minister Nirmala Sitharaman in Parliament on Wednesday had no major announcements for poll-bound Mumbai but it could benefit the rural economy in Maharashtra.
The announcement of modernisation of primary agricultural credit societies (PACS) and the respite from the disputed income tax pending with sugar factories is expected to give a boost to the agriculture and cooperation sectors in Maharashtra. More than 21,000 PACS in the state will benefit, as they will now get the status of multipurpose societies, while 72 cooperative sugar factories will get their disputed income-tax totalling ₹10,500 crore set aside.
Though the outlay for Maharashtra will be known only after the fine print of the budget is released, the announcements for the agriculture and cooperation sectors have been well received. PACS play a key role in boosting the rural economy in the cooperation sector, and the Centre’s decision to enable them to become multipurpose societies and modernise, fund and handhold them to help them spread their wings will benefit the rural economy. Maharashtra has over 21,000 PACS, of which 12,000 are being computerised in the first phase. With the additional funding, the farmers dependent on these are expected to greatly benefit.
“The computerisation and the direct monitoring by the district central cooperative banks will help weed out the financial irregularities that are synonymous with these societies,” said an official from the cooperation department. “The PACS that are in good financial health have been active in other auxiliary sectors like processing, operation of petrol pumps and warehousing. With the central assistance announced in the budget, all PACS will now be able to resort to these activities and help in strengthening them financially. This will also help the cooperative sector to get rid of private money lenders who exploit farmers.”
Deputy chief minister Devendra Fadnavis said, “The decision related to the PACS will give the cooperative movement strength at the rural level. They can now take up 20 types of schemes, including those related to cold storage and automobiles.”
The central government’s decision to treat the disputed profit of sugarcane factories as FRP expenditure instead of profit will give a major respite to cooperative sugar factories. The cooperative sugar sector is the backbone of the rural economy in western and some other parts of Maharashtra.
“The dues were raised by the income-tax department, treating the difference between procurement price fixed by the government and that actually paid by the sugar factories as profit,” said sugar commissioner Shekhar Gaikwad.
“The disputed amount pending since 1970 from about 72 cooperative sugar factories amounts to ₹10,500 crore, interest included. The central government decision announced in the budget will help clear the account books of the factories.”
Both decisions of the central government are being seen as politically significant ahead of the local body polls expected to be conducted in the next few months. “Both will have a significant impact on the cooperative sector, which is the stronghold of the Opposition Congress and NCP,” said a BJP leader.
Chief Minister Eknath Shinde and his deputy Fadnavis led a delegation of ruling party leaders last week and met Union cooperation minister Amit Shah to push for the two decisions. The ruling parties will now bank on them during the rural local body polls.