Breaking: Farm Machinery Manufacturers Worst Hit By Present Scenario- CICU

Author(s): 
Ludhiana, May 8, 2015: Avtar Singh, President and Upkar Singh Ahuja, General Secretary, Chamber of Industrial and Commercial Undertakings (CICU), Ludhiana have said that in the present situation when the increase in food production is the most important, the manufacturers of Farm Machinery have been severely hit.
In a joint statement here today, they added Punjab is known as flag holder of Farm Machinery mechanization in the county, but farm mechanization in India is very low in comparison to developed countries.  They also said although the farming is seasonal, there are more than 2000 Units in the State engaged in the manufacturing of Farm Machinery & Parts for Farm Machinery.  Even many multinational companies have also set up their Plants in Punjab to boost the sales of farm machinery and equipments.
They narrated that untimely bad and inclement weather have caused substantial reduction in the production of crops yield.  Subsequently, the existing high rate of 3.50% VAT on purchase of steel has severely affected the production of farm machinery & equipments.  This has also adversely affected the sales of Tractors which have declined by more than 13% i.e. from 634151 Nos. in FY-2014 to 551463 Nos. in FY-2015.  This decline in the sales of Tractors, has also affected the sales of Farm Implements & sale if Farm Implements is linked with Tractors’ sales.
Also the Subsidy being provided by the Central & Statement governments seem just an eye-wash and only 5% farmers, who purchase farm implements; are able to get this benefit as allocated amount is very small.
They also bring to the notice of the Government that the union government's estimated cost of food security comes at 11.10% (Rs 1,24,723 expressed as a % of Rs 11,22,799 crore) of the total receipts. The CACP's estimated cost of food security comes at 21.5% (Rs 2,41,623 crore expressed as a % of Rs 11,22,799 crore) of the total receipts. Bhalla's cost of food security comes at around 28% of the total receipts (Rs 3,14,000 crore expressed as a % of Rs 11,22,799 crore).  In this case the estimated cost is in the range of 1-3% of GDP.   So, if timely and corrective steps are not taken, it would lead to food crisis.
They further stated that in view of the above, there is a great need of farm mechanization by encouraging low cost manufacturing which is the need of the hour for boosting food production and sales of farm machinery and equipments. 
CICU appeals, urges and requests Prakash Singh Badal, Chief Minister and Sukhbir Singh Badal, Deputy Chief Minister, Punjab to:
  Either reduce the rate of VAT from 3.50% to 1.00% OR to provide re-imbursement on VAT amount charged on purchase of steel which is being used for manufacturing of farm machinery & equipments.  There is no VAT on the sales of Farm Machinery.
  Increase in the allocation of the amount of subsidy for the purchase of farming Machinery & Implements under Rashtriya Kisan Vikas Yojna (RKYS) Scheme resolved by The National Development Council (NDC).
  To set up a Research & Development (R&D) Centre in Punjab for up-gradation of Agricultural Machinery.
 
Date: 
Friday, May 8, 2015