Karnataka to abolish agricultural income tax on plantation crops

Bengaluru, March 18 Responding to a long-standing demand of growers of coffee, tea, rubber and spices, Karnataka Chief Minister Siddaramaiah on Friday proposed to abolish agricultural income tax on commodity plantations from April 1.

"I propose to abolish agricultural income tax on coffee, tea, rubber and other plantation crops from April 1," Siddaramaiah said, presenting a deficit budget for 2016-17.

Noting that the gross state domestic product declined to 6.2 percent in 2015-16 from 7.8 percent in 2014-15, the chief minister attributed it to 4.7 percent fall in the farm sector following a severe drought in 137 'talukas' (revenue subdivisions) across the state.

"The foodgrain production declined to 110 lakh tonne in this fiscal from 126 lakh tonne in 2014-15, as the south-west monsoon failed and three-fourths of the state received deficit rainfall," Siddaramaiah said.

The service sector, however, grew at 9.1 percent, while the industrial sector is expected to register 4.5 percent growth this fiscal.

"The IT sector contribution to the service sector doubled to 18 percent from nine percent last fiscal, while the overall service sector contributes 64 percent of the SGDP as against 59 percent last fiscal," Siddaramaiah said.

The manufacturing sectora¿s contribution also increased to 15 percent from 12 percent, while that of agriculture sector declined to eight percent from 14 percent.