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Vidarbha cotton farmers and traders protest new tax
Farmers who were already suffering economic losses due to needless restrictions have decided to intensify stir if the government doesn't roll back the new five percent purchase tax, farm activist Kishor Tiwari has threatened.
PROTESTING THE new 5% purchase tax, levied on cotton trade in the state budget, cotton farmers and widows of debt-ridden peasants went on a day’s hunger strike yesterday in various parts of Maharashtra.
 
“Farm activist Suresh Bolenwar,Tukaram Meshram, Ankit Naitam, Moreshwar Watile and Mohan Jadhav and cotton traders association office bearers Suvidhi Surana, Rikhab Mutha, Chandrakant Chokhani, Kishore Khera and Vijay Kondawar spoke at protest rally, which was attended by farm-widows Aprana Malikar, Manju Ambarwar and Bebitai Bais and others,” farm activist Kishor Tiwari added.
 
“Five million cotton farmers who are facing cotton crop failures are being subjected to very heavy economic losses due to needless restrictions put by commerce ministry on export and recent announcement of Maharashtra government to impose 5% tax on all raw cotton purchases in Maharashtra and now cotton traders, cotton processing plant owners and exporters to have come together and decided to intensify stir if demands are not addressed soon,” Tiwari added.
 
Cotton prices in the state fell further by around Rs. 200 at Rs. 3, 400 a quintal following the state government's budget announcement of imposing a value added tax (VAT) of 5% on cotton. The additional tax burden has hit the market sentiment, which was already low with the virtual stalling of exports since March 5.
 
While on the one hand the state government has decided to extend a relief of Rs2, 000 crore to around 5 million cotton farmers after crop failure in more than nearly 40 lakh hectares, it took a harsh measure to put 5% VAT on cotton on the other hand. Prices, which were ruling around Rs 4,200 in the first week of March, have steadily declined to Rs 3,400 in the current week. "This will only add to economic losses of the already distressed cotton growers," said Tiwari (VJAS). He has urged the state to roll back the VAT proposed in the budget.
 
In other cotton growing states it was no more than 2%, he claimed. The director general of foreign trade (DGFT) literally stalled cotton exports by sea and road since March 5 leading to crash in raw cotton prices. VJAS has demanded that the group of ministers (GoM), which is likely to meet on April 3, should review the situation and lift all restrictions on cotton exports.
 
"When cotton arrival as per data is only 242 lakh bales as against 278 lakhs bales of last year and at least 120 lakh bales awaited in the markets, such restrictions will expose more than 7 million cotton growers, traders and exporters to huge economic losses and will damage Indian cotton trade. Just to protect a few garment manufactures, the DGFT should not be allowed to dictate its terms," said Tiwari."When domestic demand is just 20 million bales as against production of 33 million bales there is no reason to restrict exports. The move reeks of corruption," Tiwari alleged. "India, is a major exporter of cotton but a cartel which monopolies the garment export is lobbying for the ban since 2010 although India is signatory to the WTO," Tiwari said.
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