The Agricultural tax debate has been the doing rounds in the political and national circles for the past few days. The most recent to voice their opinion about the topic is the Chief Economic Adviser, Arvind Subramanian. Speaking about it, he said states which have an option to levy taxes should differentiate between rich and small farmers.
Subramaniam said, “The legal situation is nothing prevents state governments from taxing agriculture (sic) income. The constitutional restriction is on central government taxing agriculture income. There too, one could make a case that this is a choice open to 29 state governments and if there are willing takers, all power to them.”
He also stressed the need to make a clear distinction so as to avoid mishaps. He added, “Why is it that it is very difficult to make a distinction between a poor farmer and a rich farmer… When you say a farmer, people think that you are going after the poor farmer. So what is it about political discourse that does not allow these distinctions to be made. Why can’t we say, rich regardless of where they get their income, should be taxed.”
Bibek Debroy, a NITI Aayog member suggested that agricultural income should be taxed, which stirred a huge controversy. However, these claims were rejected by Finance Minister Arun Jaitley, who said that the centre has no power to impose an agricultural tax.
