According to Indian laws (different for every state),
there is a cap on the amount of land holding a family can have. In most states that limit is 10 acres.
The aim of such policies was to ascertain that the land that was taken from Zamindars and given to the landless doesn't end up back in the hands of the Zamindars.
But just like other policies such policies don't get implemented because the politicians themselves own vast swathes of land and also use them as means to convert black money to white.
Also, agriculture practices that can earn an honest farmer some good amount of money are already taxed like dairy, tea, coffee and rubber industry.
Agriculture loan rates are also very high apart from KCC loans and adding a tax on top would just break the backs of people who want to make a successful foray into farming.
Our laws and it's implementations are so archaic and so much discretionary powers are given that they even charged tax to farmers who were growing Mushrooms and doing Hydroponic farming. It's like the people in power don't want farming and farmers to become a viable option for people to choose as a livelihood.
10 Acres is a very small Cap, I'm not aware of such a legislation (If you are talking about the Land act it is useless in current scenario) , I myself own much more than that. In a society of farmers which I know, what I own is considered entry level ! I know may of them owning hundreds of acres and living a much lavish lifestyle than we can even imagine. What will these people do with such a massive non taxable wealth and relative free time (agricultural work needs you to be in active work for 6 months a year, other months are relatively free. If you've outsourced your work ; you are just supposed do a vigilance) ? They mostly turn to politics, to kill free time, run for various elections. Why is that there are more Farmer turned politicians Vs other Professionals (like Engineers/Doctors) turned politicians ? I have lived a village life for quite a number of years and I know what all they do in free time.
These are the major source of black money and its economy in our country and should be curtailed in order to reduce the menace of Black economy IMHO.
1. The Cap on non taxable agricultural wealth is a must, British used to tax farmers (Lagaan) without exceptions. It was a ploy to promote Indian freedom struggle, so more and more farmers can join the protest considering the economic benefits . Now, after 70 yrs of Independence such practices should go. No Political party has a spine to put such a legislation into place. I'm not asking to Tax everyone, but the ones above certain income and with adequate respite during floods and drought etc. People owning massive amount of lands are no different than any other businessman, the soft corner of being a farmer should not be applied. Whenever such a discussion is brought about, they will conveniently hide behind the shadows of poor , marginalized, suicide prone farmer picture and ask how the hell can you tax him? There is a lot of involvement of such wealthy farmers in the misery of not so well to do small farmers. They will give money at a interest and make sure that the poor farmer either has to sell his lands or commit suicide in order to repay the loans. Otherwise from where will you get agricultural labor ? agricultural laborers are nothing but poor farmers who had to sell off their lands .
2. Political Party donations: This government has done a pretty good job where the cash donation cap is Brought down to Rs 2500. I would have preferred a total ban on cash donations but it is too much to ask in one go. But the remarkable development is such a donation can be traced from now on. Next step is to bring them under the RTI. I know there's more work to be done but it is a good start nevertheless.
3. Political and bureaucracy Kickbacks, one of the major reasons for Black money economy to exist. bureaucrats are as corrupt as politicians, and they can kill any policy to their benefits. We now know that the public sector bank officials can be as corrupt as Govt officials if there is an opportunity. Majority of Qs during demonetization were due to siphoning of loads of newer currencies at a percentage with the backing and involvement of local politicians. This is the first time by any Govt that, some IAS officials were asked to take voluntary retirement on the basis of Non performance.
4. Taxing the religious institutes, so called "Charitable Trusts" and NGOs: Their involvement in concealing, converting black money is enormous . Now we know that all religious places are designed and managed as businesses then, what is wrong to tax them and bring them under the RTI? Many of the NGOs in India function no more than Hawala agents. Again, No Political party has a spine to put such a legislation into place.
5. Gold, Benaami Properties , Fraud companies should be tackled next by the govt. If a cashless economy starts getting momentum as it is apparent now, there will be many fraud companies to convert Black to white or send the money to offshore tax heavens . Which is a much serious issue where country is literally getting robbed of its wealth. With the advent of Cashless economy the chances of converting the Black money to a Grey economy (fraud companies etc) is a dangerous phenomenon. With routine boasting of India having : some XX numbers of Mobile connections , XX number of Smartphone users, XX number of internet uses etc promoting a cashless economy though seems ideal but such workarounds to a grey economy needs to be curtailed too.
6. Putting a Cap on amount of wealth that can be transferred from parents to their kids; Much of our hoarding mentality comes from our love for our kids and earning a lot for their betterment. If you can put a reasonable Cap; on the amount parental wealth getting transferred, the desire to accumulate wealth fades to a substantial extent, BTW that teaches your future generation to perform and to earn for themselves. Recently Jackie Chan & previously Bill Gates made great pledges not transfer all off their wealth to their kids and asked them to Perform and earn for themselves. Such a measure will reduce our hoarding mentality and reduce corruption to a greater extent.
