Ginning Units in Indore Region Face Challenges with High Mandi Tax
By 2024-08-03 10:41:54
Indore Region Ginning Units Face Difficulties Due to High Mandi Tax
As the new cotton season approaches, beginning in the last week of September, ginning units in the Indore region are gearing up for operations. However, uncertainty over demand and uncompetitive pricing due to high mandi taxes has dampened industry sentiment.
Madhya Pradesh hosts approximately 200 ginning units, with around half of them located in the Nimar region. Shrikrishan Agrawal, owner of a ginning unit in Bhikangaon village, Khargone district, remarked, “Preparations for the new season are underway, but capacity utilization may be impacted. Local units struggle to compete due to higher prices compared to other states.” Ginners argue that the mandi tax levied by the Madhya Pradesh government makes procuring raw cotton and selling finished lint cotton more expensive.
Currently, the mandi tax in Madhya Pradesh stands at 1.20 percent. Ginners advocate for a reduction to 0.50 percent to level the playing field with other states. Kailash Agrawal, a cotton farmer and ginner from Khargone, highlighted the issue: “Selling cotton lint to other states is challenging because our prices are higher due to the mandi tax. This affects processing, leading ginning units to reduce operations.”
The new cotton season is anticipated to start with arrivals in local markets by late September or October. In the Indore division, key cotton-growing areas include Khargone, Khandwa, Barwani, Manawar, Dhar, Ratlam, and Dewas.
The Cotton Association of India, an apex trade body, estimates cotton pressing in Madhya Pradesh for the 2023-24 season at 18 lakh bales (1 bale equals 170 kg).
