Rubber price fall hits tax collection
Rubber cultivation could be a bourgeois pastime.
THIRUVANANTHAPURAM: Rubber cultivation could be a bourgeois pastime, as former Chief Minister E. K. Nayanar once described it, but the tragedy that has befallen this ‘pastime’ is affecting the finances of the state. Quite in step with this bourgeois image, planners had once believed that rubber growers kept up a certain standard of consumption unmindful of rubber prices.
But this image of rubber growers as ‘snobbish elitists’ has withered in the last couple of years. Surprising tax officials, consumption in the rubber sector has dwindled along with the price of rubber. “Growth in tax revenue is least in rubber belt areas like Kottayam, Pathanamthitta, Kollam and Idukki districts, and also certain pockets in Thiruvananthapuram,” a top tax official said.
“This can only mean that rubber growers are not consuming the way they used to, and this is hitting the state hard. Even in the late 90s when the rubber prices dropped to below Rs 20 from Rs 60, consumption had remained steady," the official said. Tax officials consider land transactions and automobile sales as barometers of consumption in an area. "Automobile sales in rubber belts have dropped drastically in the last one year contributing to poor motor vehicle tax. Land deals have also come down reflecting in low registration revenue in these areas," the official said.
Rubber has deep roots in Kerala. The state accounts for more than 90 per cent of the total rubber production in the country. The total area under rubber cultivation in the state is 5.45 lakh hectares, and the state has around 11.50 lakh rubber farmers. But what makes the 'bourgeois' sneer seem insensitive is the fact that most of them are small-holders with two or less acres. The Rubber Production Incentive Scheme, which intends to provide farmers Rs 150 a kg, has not worked wonders. "Even the most ambitious stabilisation scheme stands no chance in a situation where there is a glut of natural rubber in the international market and free trade," economist Dr Harilal said.