Wealthy farmers must pay taxes: Closing the income gap for a fairer India
Viksit Bharat' plan, it must face the stark reality of economic inequality, especially in the agricultural sector, where disparities run deep. The farm sector employs nearly 50% of the population, but contributes only 17% to GDP, reflecting a vast divide between smallholders with marginal incomes and a small group of wealthy farmers. Implementing a well-structured taxation policy for affluent farmers is crucial to correcting this imbalance and generating revenue.
Farm income is exempt from taxation under Section 10(1) of Income-Tax Act 1961. This provision was designed to shield small and marginal farmers from financial strain. However, exemption has inadvertently allowed wealthy farmers to avoid paying taxes, even though they benefit disproportionately from public infra, subsidies and services compared to small-scale farmers.
According to People Research on India's Consumer Economy's (PRICE) ICE 360° survey, there are about 5 mn 'wealthy farmers', each earning over ₹25 lakh annually, with two-thirds of their income coming from agriculture, and the rest from non-farm activities. Though this group represents only 8% of the farming population, they control 28% of the sector's income.
Interestingly, about 45% of these wealthy farmers also benefit from the PM-Kisan Samman Nidhi. These farmers, primarily residing in top developed rural district clusters across Andhra Pradesh, Punjab, Kerala, Haryana, Tamil Nadu and Karnataka, have larger landholdings and access to modern tech, and are better integrated into commercial
