New Delhi, Feb 29: The tractor industry, particularly companies like Eicher and Mahindra & Mahindra which manufacture the smaller engine capacity (less than 1800 cc) tractors, will be adversely affected as prices are likely to rise between Rs 13,000 and Rs 16,000 per unit.The price increase will be due to the proposed levy of an uniform duty of 16 per cent on all category of tractors in the Budget for 2000-01.
The smaller horsepower segment will also shrink and there would be a shift to the higher segment tractors (above 1800 cc), a leading tractor company official said.
The higher horsepower (hp) tractors are already being taxed at the rate of 16 per cent and hence, there is no change for them.
"The Budget lays a thrust on rural areas which would lead to a spurt in demand and also states a substantial step up of credit which is favourable for tractors", Rakesh Chopra, head agri-business, Escorts Ltd said.
Escorts Ltd welcomed the Budget adding that it would have preferred a lower excise duty for the industry. The company manufactures more of the higher segment tractors.
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