Sunday, November 14, 2004

Appropos this proposal on 'shal's blog regarding taxing the richer farmer:

It might be easier and more palatable for all and sundry to stop the subsidy on the most important stape of the richer farmers - get rid of the diesel subsidy. This will equal the playing field - at least somewhat. The richer farmers with their borewells and tractors will be forced to pay the market rate (plus duty) of the fuel. The more margina; farmers using oxen to plough their land will escape this tax. It won't make their lives easy - but at least they will not be harassed by tax collectors who will suddenly see a new avenue to profit from.

This will have the added benefit of removing the stupid subsidy that has created the weird, new and artificial market for diesel fuelled cars.

Secondly, farmers that use water should be taxed for their use of the supply. I am not sure that anyone in India pays anything for water. This is a commodity that is as necessary as food, and yet is taken for granted.

This may be vastly more difficult to inculcate - but a start could be made. And, again, richer farmers, with their larger lands, will be forced to fork up more.

These would be two simpler ways to tax the richer farmers.