Purchase tax on opium plagues ryots

Neemuch, MP, Sep 19 (UNI) Even as a fresh opium policy is to be announced in the first fortnight of next month, heavy purchase tax continues to be a hurdle for farmers though it is unlikely to be hiked in the policy.

With the twin objectives of encouraging production of analgesics, life-saving medicine and enhancing opium export in the face of international competition, two former MPs have demanded that opium be declared a tax-free crop.

Mr Balkavi Bairagi and Mr Udaylal Aanjna reiterated that Madhya Pradesh and neighbouring Rajasthan repeal purchase tax or reduce it to a minimum. The levy earns Rs 30 crore annually for the states.

The leader duo will submit a memorandum this week to Union Finance Minister P Chidambaram who has also written to the two states to reduce the tax.

They told UNI that if the states disagreed then the Centre should exercise special rights to declare opium tax-free. Otherwise opium ought to be registered under the 'special goods' category with minimum tax of four per cent.

As per the rules, essential commodities and items of daily use are classified as special goods. The two states account for 99.98 per cent of opium cultivation area. In Uttar Pradesh, less than 1,800 peasants till a mere 200 hectares. The purchase tax figures are Uttar Pradesh 33.5 per cent, Madhya Pradesh 46 per cent and Rajasthan 50. Until 2003-04, the levy was 23 per cent in this state.

Under a slab system, minimum production of 44 kg per hectare is compensated by Rs 750 per kg from the Narcotics Department and the maximum is Rs 2,200 per kg. In Madhya Pradesh and Rajasthan, the average yield is 56 to 60 kg per ha and ryots receive Rs 1,200 to Rs 1,500.

Farmers lament that production cost spiralled over the past half decade thanks to rise in cost of fertiliser, seeds, pesticide etc.

Smugglers also try to trap peasants in the black market.

The ex-parliamentarians demanded that the slab system be ended and ryots be given at least Rs 2,000 to Rs 2,500 per kg. Two years back, opium sale price declined to 72 dollars per kg from 87 dollars.

UNI XC-AC 1738