Basmati millers in Punjab are seeking rollback of increase in Market Development Fee and Rural Development Fund (RDF) that is set to increase cost by 8-10 per cent compared to other mills set up under the mega project category. The millers rue that the additional cost burden will also dent their cost competitiveness in domestic as well as international trade compared to counterparts in Haryana, Rajasthan, Jammu & Kashmir and Western Uttar Pradesh.
"It will affect domestic as well as international business of millers based in Punjab," president Punjab Basmati Rice Millers Association, Balkrishan Garg said. Garg said that the basmati trade is already margin stressed due to lower price realisation in export market and the additional cost will dent export prospects of basmati grown in Punjab.
The Punjab cabinet, in the last week, announced to increase market fee and RDF by one per cent each. The market fee and RDF stood at 2 per cent each in the past.
The millers are worried that the trade would hugely tilt in favour of mills set up under mega project category that are completely exempted from mandi tax and market fee for first ten-years of operations.
Garg said that the lower mandi fee in other basmati growing states like 1.6 per cent in Rajasthan, 2.4 per cent in Uttar Pradesh, 0.2 per cent in Madhya Pradesh is set to affect the rice processing industry in Punjab. He said that the association has written to chief minister Amarinder Singh raising the plight of local industry.
"The disparity in RDF and mandi fee defeats the purpose of One Nation One Tax under Goods and Sales Tax," says Vijay Sethia, former president of All India Rice Exporters Association.
Ranjam Kamra, a basmati trader, lamented that many rice mills will be shut due to the additional costs and disparity in levy. "The cost difference will be more than Rs 275 per quintal enough to push millers out of business," Kamra said.
"It will affect domestic as well as international business of millers based in Punjab," president Punjab Basmati Rice Millers Association, Balkrishan Garg said. Garg said that the basmati trade is already margin stressed due to lower price realisation in export market and the additional cost will dent export prospects of basmati grown in Punjab.
The Punjab cabinet, in the last week, announced to increase market fee and RDF by one per cent each. The market fee and RDF stood at 2 per cent each in the past.
The millers are worried that the trade would hugely tilt in favour of mills set up under mega project category that are completely exempted from mandi tax and market fee for first ten-years of operations.
Garg said that the lower mandi fee in other basmati growing states like 1.6 per cent in Rajasthan, 2.4 per cent in Uttar Pradesh, 0.2 per cent in Madhya Pradesh is set to affect the rice processing industry in Punjab. He said that the association has written to chief minister Amarinder Singh raising the plight of local industry.
"The disparity in RDF and mandi fee defeats the purpose of One Nation One Tax under Goods and Sales Tax," says Vijay Sethia, former president of All India Rice Exporters Association.
Ranjam Kamra, a basmati trader, lamented that many rice mills will be shut due to the additional costs and disparity in levy. "The cost difference will be more than Rs 275 per quintal enough to push millers out of business," Kamra said.