Separate rich farmers from poor and tax them: CEA Arvind Subramanian

The Chief Economic Advisor Arvind Subramanian has called to distinguish rich farmers from the poor by taxing the former, according to a report by The Indian Express. A couple of days after Finance Minister Arun Jaitley clarified that the Centre has no plans to impose any tax on agriculture income, the CEA present at the annual session of the Confederation of Indian Industry (CII), said that while the Constitution does not allow any tax on agriculture income, states are free to take a call, according to the report.

Earlier, Arun Jaitley had posted a tweet saying, “the Central Government has no plan to impose any tax on agriculture income,” as according to “the Constitutional Allocation of Powers, the Central Government has no jurisdiction to impose a tax on agricultural income.” However, CEA Subramanian said nothing prevents state governments from taxing agriculture income. He added that the constitutional restriction is on central government as far as taxing agriculture income is concerned and said that there too a choice open to 29 state



governments. “If there are willing takers, all power to them,” said Subramanian.

The official further emphasized to tax the rich farmers. He said there is a need to make a clear distinction between rich and poor farmers and asked why was it has been taken as a difficult task to make a distinction between them. Speaking at the event, he asked that why it cannot be said that rich, regardless of where they get their income, should be taxed?

Subramanian also talked about the sharp rise in the value of rupee in recent months and cautioned that it is hurting India’s exports. On Thursday, the rupee ended at Rs 64.24 against the dollar after rising nearly six per cent against the US dollar since January 2017. According to him, it is a “mistake and a misguided view that strong currency is a sign of national or economic strength.” Stating data, he said in last two years India has lost competitiveness from exchange rate by 10-15 percent and that is a huge loss in competitiveness that is affecting country’s exports.