Tax relief for Haryana traders spurs basmati prices in Punjab

PATIALA: Much to relief of farmers, prices of basmati have jumped by about Rs 400 per quintal past one week owing to tax relaxation to traders from other states by the Punjab government, said rice millers and exporters. "Until a week ago, Pusa 1121 variety was being purchased at Rs 2,800 per quintal compared to the highest price of Rs 3,250 per quintal quoted in various grain markets of the state on Friday.Prices increase largely due to relaxation given to Haryana traders for purchase of paddy", said Naresh Goyal, prominent exporter of basmati rice in Samana town of Patiala district.
Punjab government levies 2% rural development fund (RDF) tax and charges 2% market fee from traders for purchasing every unit of food grain from the state's markets. While the Punjab traders are already exempted from any tax or fee on the purchase of basmati, the state government, apprehending high arrivals of basmati paddy, has recently slashed RDF tax and market fee by 1% each for Haryana buyers. Experts said the move attracted private buyers from the neighbouring state, which led to an increase in basmati rates.
Rates of Pusa 1509 - an early maturing basmati variety - also went up by Rs 350-400 per quintal and was selling at Rs 2,900 per quintal in various grain markets of Punjab. In Taraori, the major basmati purchase centre in Karnal district of Haryana, Pusa 1121 and Pusa 1509 fetched Rs 3,250-3,300 and Rs 3,000 per quintal respectively.
However, prices are still significantly less than last season when basmati paddy touched as high as Rs 4,500 per quintal.
Iran, which is the major consumer of basmati rice, has recently enforced a 35% hike in import duty on the produce from India, which led to a significant decrease in rates this year. According to the Punjab agriculture department estimates, area under basmati has gone up significantly to 8.16 lakh hectares this kharif season from 5.50 lakh hectares in 2013 and its output is likely to touch 40 lakh tonnes.