PM must explain why his govt scrapped Backward Region Grant Fund: Cong

The Congress on Friday hit out at the BJP for "scrapping" the Backward Region Grant Fund in 2015 and asked Prime Minister Narendra Modi to explain why his government "callously" did away with the "forward-thinking" scheme of the UPA.
Congress general secretary Jairam Ramesh
Congress general secretary Jairam Ramesh

New Delhi | The Congress on Friday hit out at the BJP for "scrapping" the Backward Region Grant Fund in 2015 and asked Prime Minister Narendra Modi to explain why his government "callously" did away with the "forward-thinking" scheme of the UPA.

Congress general secretary Jairam Ramesh posed questions to the prime minister ahead of his rallies in Uttar Pradesh.

"Why has the Modi Sarkar scrapped the Backward Regions Grant Fund? Why has the BJP neglected UP's mentha farmers? Why has CM Yogi repeatedly lied about reopening the Budhwal Sugar Mill?" Ramesh said.

Elaborating on what he said were "jumla details", the Congress leader said the Backward Region Grant Fund, aimed at uplifting the backward districts of India, was "callously scrapped" by the Modi government in 2015.

"This forward-thinking scheme was established by the UPA government in 2006 and by 2013, Uttar Pradesh's backward districts had received benefits worth Rs 4000 crore from it," he said.

Ramesh pointed out that in 2015, the Modi government discontinued separate budgetary allocations for this scheme, transferring it to states and slashing annual funding to the Rajiv Gandhi Panchayat Sashaktikaran Abhiyan (RGPSA) from Rs 1,006 crore to just Rs 60 crore.

Pointing out that India is the world's largest producer and exporter of mentha oil and UP alone accounts for 90 per cent of India's total production, Ramesh claimed that the mentha oil industry is now reeling from convoluted tax classifications, high GST, and general government neglect.

"Instead of trying to support farmers and processors, the government is trying to extract maximum revenue from the industry. First, the government follows a dual policy for mentha - it is classified as an industrial product under GST, but it is classified as agricultural produce when it comes to the Mandi Tax," he said.

This enables double taxation - GST as an industrial product, Mandi Tax as an agricultural product, Ramesh said.

"Farmers already have to pay the 12% GST on mentha oil sales, and under the new Reverse Charge Mechanism (RCM), RCM is levied on purchase. Mentha oil processors are forced to take on the tax liability when purchasing mentha oil from farmers and therefore take on dual tax liability," he said.

Finally, despite mentha being an entirely export-oriented product, the government provides no incentives to boost production, processing, or export, Ramesh claimed.

Why have the outgoing PM and the BJP neglected such an important Indian export, he asked.

"Even after repeated promises from PM Modi and CM Yogi, the Budhwal Sugar Mill remains inactive," he said.

"This came as a significant blow to districts like Fatehpur that received crucial development funds from the scheme. Can the outgoing PM explain why his government so callously scrapped the Backward Region Grant Fund?" Ramesh said in a post on X.

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