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‘New govt. should liberalise agriculture’

Bhalla favours cut in cost of capital

May 20, 2019 10:48 pm | Updated 10:48 pm IST - NEW DELHI

The government that comes to power should focus on agriculture by removing all restrictions placed on the sector in terms of sale, purchase, and exports, former member of the Prime Minister's Economic Advisory Council Surjit Bhalla said. He further said that the new government should reduce the cost of capital in the country to boost investment and growth.

“Every country that has conducted large scale reforms, has reformed agriculture first,” Mr. Bhalla said, speaking at a FICCI event. “In India, the Agricultural Produce Market Committee (APMC) says that farmers can only sell in the mandis and need a licence to sell in the mandis.”

Mr. Bhalla said that there were powerful interest groups that ensured this system did not change, and also questioned whether the Minimum Support Price system was helping the poor farmers.

“There should be zero intervention in agriculture,” he said. “Farmers should be allowed to buy, sell, and export whatever.”

Mr. Bhalla said that India’s potential economic growth rate was 8-8.5%, but several factors had meant that this had not been achieved.

“India has the second highest corporate tax rate in the world. Taxes paid by corporates as a proportion of their profits are 24% in India, compared to 15-16% in large economies around the world.”

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