Karnataka government relents, reduces APMC market cess to 0.35%

The state government has yielded to the pressure from APMC traders, who had threatened to go on a state-wide protest, by reducing the APMC market cess to 0.35 per cent on notified agricultural products traded at APMCs.

While the traders had demanded reduction in market cess to 0.20 per cent, the government had reduced it to 1 per cent from 1.5 per cent earlier.

DH was the first to highlight the problems of APMC traders. Subsequently, the state cabinet, in its meeting on July 23, agreed to reduce it to 0.35 per cent.

In an emergency circular issued on July 24, the principal secretary, department of cooperation stated, “It has been decided to fix the APMC market fee at 0.35 per cent. It is directed to reallocate the market fee for various purposes of APMCs.”

The proposed reduction in market fee is expected to generate around Rs 250 crore revenue for APMCs as against Rs 600 crore projected earlier. The funds will be used for maintenance and development of government-owned market yards.

Recently, the state government amended the APMC Act to facilitate private trade outside the boundaries of APMC yards and exempted them from paying market fee.

Subsequently, the state cabinet on July 9 decided to reduce the market fee to 1 per cent from the earlier 1.5 per cent. The trade bodies and APMC traders decided to stage a state-wide protest against this order and demanded for reduction of the cess to 0.20 per cent.

“We had requested the government to create a level-playing field in the state as private markets are exempt from the market fee. Though it is difficult for us to pay 0.35 per cent, we will cooperate with the state government and compete with the private trade,” Ramesh Chandra Lahoti, Chairman of APMC Committee, FKCCI told DH.

Around 5,000 traders in north Karnataka districts such as Bidar, Kalaburagi, Raichur, Vijayapura and Yadgir had also shut down their trade in demand for the reduction in the market fee.

"The decision of the state government in reducing the APMC market cess will not only help farmers but also APMC merchants to sell agri products at competitive rates," FKCCI President C R Janardhana said.