Kerala - Kottayam   

Rubber traders to stop `hundi' system

By Our Staff Reporter

KOTTAYAM, JAN. 22. The natural rubber traders have decided to put an end to the bill discounting system (hundi) in rubber trade.

Speaking to mediapersons here today, leaders of the Indian Rubber Dealers' Federation (IRDF) said the system, which had started in a proper way with the consuming institutions availed credit facilities on the basis of their own credit limit, had degenerated into a system where the credit was moved to the realm of the dealers. With tyre majors, including Modi Tyres and Dunlop India Ltd. defaulting on payments amounting to a whopping Rs. 70 crores, nearly 100 dealers in the State were on the verge of disaster, as their solvency was at stake for no fault of theirs, they said.

It was against this backdrop, that it was decided to do away with trading system which has no locus standi in any authoritative fora, they said.

The IRDF leaders called to unify the sales tax of rubber in the three south Indian States like Kerala, Tamil Nadu and Karnataka. At present, Kerala charges a tax of 12 per cent at the last point while it is eight per cent and four per cent in Tamil Nadu and Karnataka respectively. This unequal situation has resulted in massive smuggling of rubber from Kerala to the other two States, they pointed out.

They said while the industrial sector could avail credit at a liberal five to six per cent interest rate, those in the agriculture sector and agriculture marketing sector have to pay up to 15. 5 per cent for availing credit facilities. The IRDF leaders called upon the authorities to bring in a unified and liberalised interest regime for those in the agriculture marketing sector.

The dealers wanted the Central Government to continue with the subsidy programme for rubber export which according to them had been effective in holding the price line of natural rubber in the indigenous market. A convention of rubber dealers would be held on January 26 to discuss these relevant issues, according to the IRDF president, George Vally. The Union Minister of State for Law, P.C. Thomas, K. Suresh Kurup, MP, Oommen Chandy, MLA, and others will participate.

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