The Kerala cabinet has waived plantation tax and declared a moratorium on agriculture income tax, meeting a long-pending demand of the plantation sector. The Chief Minister is expected to make an announcement on the floor of the State Assembly during its ongoing session.

Kerala accounts for 82 per cent of the rubber, 71 per cent of cardamom, and 21 per cent of coffee produced by the country's plantation sector. Growing production costs and poor price realisation have dealt a body blow to the sector, which has been faced with a financial crisis during the last two years.

The Cabinet decision endorses the recommendations of the Krishnan Nair Commission that studied the issues plaguing the sector. Appointed by the previous Congress-led government, the Commission had proposed either scrapping or declaring a five-year moratorium on agriculture income tax.

Tax burden eased

Tamil Nadu does not levy taxes on the plantation sector, but Kerala charges ₹700 a hectare as plantation tax. The agriculture income tax was 50 per cent of profits, while in other States it is much less.

The current Left Democratic Front Government has already reduced the agriculture income tax to 30 per cent and now has declared a moratorium on the tax. The Commission had also flayed the building tax on workers’ one-room tenements attached to the plantations.

It has reportedly recommended rebuilding the quarters with at least two bedrooms and toilet facilities.

Housing for workers

Both these recommendations found resonance in the Cabinet decision. Local-self governments are being advised to exempt these quarters from building tax.

The government will bring them under its comprehensive LIFE housing scheme as they are beyond repair.

New quarters will be constructed with the cost shared equally by the state government and the plantation managements.

The Chief Minister also said the seigniorage of ₹2,500 per cubic metre on rubber wood will be scrapped. (This is a levy on rubber wood raised on lands leased from the government.)

While hailing the measures, the Association of Planters of Kerala says these alone may not solve the financial crisis.

Industry reacts

The Association feels it will be a step in the right direction for revamping perennially crisis ridden plantations in this State, said Thomas Jacob, Chairman.

Ajith BK, Secretary, APK said plantations should be allowed to undertake intercropping, multicropping, standalone cultivation, agro forestry, vegetable, green house, and precision farming, water harvesting and conservation, renewable energy generation without changing or hampering the basic structure. The turnover of Kerala plantations was ₹21,000 crore in 2012-13 which has dropped to ₹7,800 crore in 2016-17 due to to international price fluctuation of commodities. Nearly a million people depend on the sector.

(With inputs from Sajeev Kumar, Kochi Bureau)

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