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Homechevron_rightKeralachevron_rightAmending Plantation...

Amending Plantation Labour Act among UPASI's budget wish list

Amending Plantation Labour Act among UPASIs budget wish list

Kochi: An apex planters body has pitched for overhauling Plantations Labour Act (PLA), 1951, to save the Rs 43,000 crore industry reeling under "high doses of taxation, un-remunerative returns and commodity price fluctuation".

In its pre-Budget memorandum to Finance Minister Arun Jaitley, the United Planters' Association of Southern India (UPASI) urged that until changes were made to the PLA, all expenses under this category should be given weighted deduction to the extent of 200 per cent of the expenditure.

Other major demands in the memorandum are full expenditure allowance for replanting, temporary ban on rubber imports pending disposal of safeguard duty application, exclusion of tea exports from the ambit of cess and concessional import tariff for plantation machineries, UPASI President N Dharmaraj said in a release here.

The plantation sector employs 24 lakh people (of which 60 per cent are from South India), besides playing a significant role in supporting the rural infrastructure.

Dharmaraj, who attended the pre-Budget consultation meeting for the agriculture sector called by the Finance Minister recently, said plantations were governed by the PLA, 1951 through which the industry provides housing, sanitation, water supply, creches and medical care.

"The PLA was enacted at a time when plantations operated in extremely remote areas with no external infrastructure support.

"Today plantation areas are no longer rural but semi-urban. As such, the legislation has lost its relevance and is a burden on the production cost of plantations and makes Indian plantations uncompetitive internationally," he said.

PLA therefore should be amended and many government schemes which are available to take care of the facilities provided under the Act should be extended to the plantations, he said.
UPASI in its memorandum also drew the government's

attention to the commodity price fluctuation that hugely impacts plantation business.

"Currently, commodity prices are at its lowest, which make plantation producers vulnerable for price manipulation since they are at the lowest rung in the value chain," Dharmaraj said.

Conceding that the recently amended bonus Act was laudable in its intention, Dharmaraj said it would severely impact the plantation business where 60 per cent of the cost was on employee remuneration.

"We also hear about proposed changes in the Gratuity and Maternity Benefits Act, all of which will hugely increase the production cost of plantations, making it totally unviable," he said.

Almost 60 per cent of the plantation employees are women and 50 per cent are from the reserved category. "Plantations, therefore, are in dire need of the highest level of support from the government," he added.

UPASI also sought rebate to offset the additional liability of tax paid on account of higher Agricultural Income Tax (AIT).

"Plantations are subjected to both Central Income Tax (CIT) and AIT and the weighted average rate is higher than CIT and hence rebate should be provided to offset the additional liability of tax paid on account of higher AIT," he said.

Replanting was a regular operation in plantations to maintain the agronomic viability. Therefore, few rules of Income Tax Rules, 1962 should be amended to remove the ambiguity with regard to full expenditure allowance for replanting.

Also, subsidy for orthodox production which is an export-oriented incentive should not be included as part of total income under Section 10 (30) of the IT Act.

In particular, the memorandum brought into focus the domestic rubber plantation business which is "gasping for breath under the impact of extremely un-remunerative prices".

"Though international prices are low, unbridled imports, over and above the production, have hugely impacted domestic prices of natural rubber.

"The government has increased the import duty to the maximum, but it has failed to check imports. Hence, a levy of safeguard duty on import of natural rubber is requested to protect the livelihood of small producers and keep intact its production capacity," it submitted.

Also, there was "a crying need" to ban imports of natural rubber temporarily pending disposal of safeguard duty application, UPASI said.

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