Pesticides manufacturers demand duty exemption

The Pesticides Manufacturers & Formulators Association of India (PMFAI) has demanded complete exemption of excise duty to make the industry consumer-friendly. At present, the excise duty is ruling at 16 per cent.

"Excise duty is a major hurdle for pesticide consumption which makes the product dearer and thereby, consumers use it in limited quantity. If the government exempts excise duty in pesticides, the consumption would resultantly increase substantially. Cost of growing agriculture products would decline dramatically and farmers would be relieved of rising costs to certain extent," said Pradeep Dave, president of PMFAI.

Fiscal concessions are a must to boost consumption. While developed European countries, Japan and US consume over 10 kg, Indian farmers can afford only half a kg of pesticides per hectare.

The excise exemption on pesticides can cause a surge in demand of upto 12 per cent, resulting in better capacity utilization and would save crops worth Rs 6000 crore from pest damage.

Indian technical grade pesticides (TGP) production of 65,000 tonne (2005-06) as against an installed capacity of 120,000 tonne and the glut in demand for pesticide formulations has led to the underutilization of the 225 million litres installed capacity by 40 per cent.

More than 5,300 pesticide formulation units reeling under a consolidated debt of over Rs 1000 crore are looking at the upcoming finance bill for redemption.

"Pesticides need to be treated at par with other agri inputs like tractors, fertilizers and seeds which are 100 per cent excise free. To enable the small and marginal farmers to protect their investment in seeds, fertilizers, irrigation and labour cost, the government must consider granting a subsidy to pesticides in line with the Rs 12,000 crore annual subsidy being doled out to the fertiliser industry and subsidised (freeheap) power being provided by various states," Dave added.