The Kerala cabinet has announced a historic decision for waiver of plantation tax and a moratorium on agriculture income tax, meeting the long-pending demand of the state’s plantation sector. The Chief Minister is expected to make an announcement on the floor of the State Assembly during its ongoing session through a statement under Rule 300.

Tough times

Kerala accounts for 82 per cent of the rubber, 71 per cent of cardamom, six per cent of tea 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 goes to endorse the recommendations made by the Krishnan Nair Commission that studied the myriad issues plaguing the sector. Appointed by the previous Congress-led government, the commission had in its report 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 Rs 700 a hectare in 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. Through its latest decision, it has declared a moratorium on the tax. The commission had also flayed the collection of building tax for the workers’ one-room tenements attached to the plantations.

It has reportedly mooted rebuilding the quarters with at least two bedrooms and the necessary toilet facilities, with a thrust on improving the quality of life of the workers.

Housing for workers

Both these recommendations found resonance in the Cabinet decision yesterday. Local-self governments are being advised to exempt these quarters from building tax. All residential quarters are in dilapidated condition and beyond repair. So the government would bring them under its comprehensive LIFE housing scheme.

Under this, new quarters will be constructed for the plantation labourers, the cost for which would be shared equally by the state government and the respective plantation management. In another major decision, the Chief Minister also said the seigniorage of Rs 2,500 per cubic metre of rubber wood will be scrapped.

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