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Tuesday, Oct 15, 2019

Taxing agricultural income: Need to distinguish between rich and poor farmers, says chief economic adviser

A day after a Niti Aayog member said agricultural income should be taxed, chief economic adviser Arvind Subramanian said the political discourse needs to be altered to simply categorise people as rich and poor, irrespective of one’s income.

india Updated: Apr 28, 2017 20:05 IST
Press Trust of India
Press Trust of India
New Delhi
A farmer sprinkle fertilisers on a rice crop on the outskirts of Amritsar.
A farmer sprinkle fertilisers on a rice crop on the outskirts of Amritsar.(AP Photo)

Joining the debate on taxing agriculture income, chief economic adviser Arvind Subramanian on Friday said states, which have the option to levy the tax, should make a distinction between rich and poor farmers.

“The legal situation is... nothing prevents state governments from taxing agriculture income. The constitutional restriction is on central government taxing agriculture income.

“There too, one could make a case that this is a choice open to 29 state governments and if there are willing takers, all power to them,” he said.

Subramanian also stressed that there is a need to make a clear distinction between poor and rich farmer.

“Why is it that it is very difficult to make a distinction between a poor farmer and a rich farmer... When you say farmer, people think that you are going after the poor farmer... So what is it about political discourse that does not allow these distinctions to be made? Why can’t we say, rich regardless of where they get their income, should be taxed,” he said.

A controversy erupted after NITI Aayog member Bibek Debroy suggested that the agricultural income should be taxed.

However, finance minister Arun Jaitley later clarified that there was no such proposal and the Centre has no power to impose tax on agricultural income.

First Published: Apr 28, 2017 18:11 IST

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