Mumbai: Prime Minister Narendra Modi on Sunday ruled out a tax on farm income, setting at rest what he called “mischievous and deliberate rumours" to smear the demonetization drive. Modi was speaking at the Vasantdada Sugar Institute (VSI), an autonomous sugarcane research body in Pune, where he inaugurated a three-day international conference on “sugarcane value chain: vision 2025". Nationalist Congress Party president Sharad Pawar, who heads the VSI, was present.

Modi said there were rumours that after demonetization, the government was planning to tax farm income. “There is not going to be any taxation on farmers and farm income. This country belongs to farmers. The money that we recover from this drive belongs to farmers," he said.

The sugar industry could not ignore the changes sweeping the global economy, Modi said. “The sugar industry has become very vulnerable to global factors, market uncertainties, and price fluctuations because it has not kept pace with it. One way to build a hedge against this uncertainty is increasing ethanol production at sugar factories. This would not only help the sugarcane farmers and factories get a cushion against volatile market but also help the government reduce its oil import bill as it has put in place a policy mechanism to promote ethanol blending in petroleum products," Modi said.

Modi called for promoting start-ups in agriculture sector to complement innovation, technology upgrade, research, genetic engineering, value addition, and market linkages.