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Pawar at strife with FM on scrapping cotton import duty
Jul '08
Abolition of import duty on cotton may have brought relief to manufacturers in textile and garment industry but there is another section within the government disappointed with this move.

Mr Sharad Pawar, Agriculture Minister, leads this section and has expressed discontent over the decision and displeasure over not being consulted before taking such a step. He has asked the Finance Minister to review the measure on grounds that it was not in the best interest of the farmers.

Earlier, the Government has abolished 14 percent customs duty on cotton to meet the demand of yarn producers who complained of high prices of raw material. Besides, it had also withdrawn export incentives in form of one percent duty drawback.

Mr Sharad Pawar is instead in favor of increasing the customs duty to 20 percent as this could effectively safeguard the interest of farmers who had actually started getting better remunrative returns due to soaring domestic and export demand.

However, Government initiated this measure considering the fact that cotton prices have spiked by 42 percent since January this year, increasing the prices of yarn and thereby the cost of production for millers.

Cotton production posted remarkable results this year and the Agriculture Minister strongly believes that this was made possible with of adoption of BT cotton, remunerative prices and favorable climatic conditions. He therefore advocates that farmers must be given due support if this upward trend has to be sustained in the future as well.

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