Farming sector is heading for government tax sops
On the back of a retail big bang near the horizon, the government wants to boost the slagging agriculture sector by way of tax sops. In order to strengthen the linkage between industry and agriculture, certain agriculture zones may receive tax holidays 
on the lines of incentives available for certain industrial units. The government is considering a proposal to grant five-to-ten year tax holidays in semi-arid and arid regions of the country to attract corporate investments in the farm sector. These incentives will be available for companies investing in contract farming. Proposed incentives include a weighted deduction of 150% for expenditure incurred in the development of farm lands in semi-arid regions and 200% for such expenditure in arid regions of Rajasthan and Gujarat. Besides, investment in these areas may also be considered for cheaper loans from banks as part of their priority sector lending norms.
on the lines of incentives available for certain industrial units. The government is considering a proposal to grant five-to-ten year tax holidays in semi-arid and arid regions of the country to attract corporate investments in the farm sector. These incentives will be available for companies investing in contract farming. Proposed incentives include a weighted deduction of 150% for expenditure incurred in the development of farm lands in semi-arid regions and 200% for such expenditure in arid regions of Rajasthan and Gujarat. Besides, investment in these areas may also be considered for cheaper loans from banks as part of their priority sector lending norms.The proposed move is part of a long-term agricultural strategy being finalised by the governemnt to increase the growth rate of the sector (currently around 2%) and achieve the targeted 4% growth during the 11th plan. Once the plan is approved by the National Development Council (NDC), it will encourage large companies like ITC, Reliance and Bharti to increase their exposure to the agriculture sector. It would also encourage development of farming infrastructure in dry area that contribute 40% of total food production of the country at present. The idea is to offer sops to private sector investors for increasing production in cultivable arid and semi-arid areas and bringing degraded land under cultivation. As per the government estimates, out of the total land area, while 43% is cultivable, another 45% is degraded land.
Source : The Economic Times
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