India - Vidarbha cotton growers protest against new proposed tax
Dated- 31 Mar , 2012 - India
Protesting against Maharashtra government's announcement of imposing five per cent VAT on cotton, farmers in Vidarbha region today held protests and hunger strikes demanding a rollback of the decision. They also protested against Union Commerce Ministry's "stringent" rules of revalidation for cotton export. b Pointing out that in other cotton-growing states the VAT is not more than 2 per cent, the farmers have demanded the state to roll back decision. "Cotton traders, owners of cotton processing plants and exporters came together today to protest and decided to intensify the stir if their demands were not addressed soon," president of Vidarbha Jan Andolan Samiti (VJAS) Kishore Tiwari said.
"Five million cotton farmers, facing crop failure are being subjected to heavy economic losses due to needless restriction put by the Commerce Ministry on export and the recent announcement of the Maharashtra government to impose five per cent VAT on all the raw cotton purchases in the state," he said. According to him, cotton prices in the state fell further by around Rs 200 at Rs 3,400 per quintal, following the state government's budget announcement five per cent VAT. "We have urged the government to pay to the farmers and traders all the compensation for the financial losses due to wrong policies of export and taxation and have demanded a special incentive for cotton export," Tiwari added.
The additional tax burden has hit the market sentiment which was already low with the virtual stalling of exports since March 5. While on the one hand the state government has decided to extend a relief of Rs 2,000 crore to around 5 million cotton farmers after crop failure in more than nearly 40 lakh hectares, he pointed out. Prices, which were around Rs 4,200 in the first week of March, have steadily declined to Rs 3,400 in the current week. "This will only add to the economic losses of the already distressed cotton growers," Tiwari said.