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MAJOR DECISIONS AND INITIATIVES
FOOD PROCESSING
The UPA Government completes one year on May 21, 2005. During this period, the Government has taken several important initiatives. Some of these are being brought out in the series ‘Major Decisions and Initiatives’.
The Ministry of Food Processing Industries (FPI) increased its interactions with the State Governments for developing the FPI sector as the State Nodal Agencies (SNAs) have a crucial role in the overall development of the food processing industries in the concerned State/UT. To discuss the problems of FPI, a conference of SNAs was held in New Delhi on October 13, 2004. Subsequently, to discuss the ways and means for speedy development of the food processing sector, a conference of State Ministers of Food Processing was also held in New Delhi on November 5, 2004. The conference discussed the need to frame an integrated Food Law, National Food Processing Policy and lowering of sales tax and other taxes on food products.
The Government has a Vision Plan of Growth for the FPI sector to increase the processing level of perishables from 6 per cent to 20 per cent and enhance value addition from the present level of 20 per cent to 34 per cent. India’s share in global trade will be up from 1 per cent to 3 per cent, tripling the size of the processed food industry by 2015. This would provide direct employment to 18 lakh people and indirect employment to over 64 lakh people.
The Draft National Policy of Food Processing and Vision Statement has been prepared for a speedy development of the food processing sector. The Draft Policy envisages reduction in wastage, increase in the level of processing, enhancement in value addition, employment generation and provision of remunerative income to farmers. The proposed policy has been placed on the Ministry’s website for inviting suggestions/comments of all the stakeholders. Based on the suggestions/comments, the Policy will be finalized.
Food Law
At present, 13 different laws govern the food processing sector. Multiple laws/regulations prescribe varied standards regarding food additives, contaminants, food colours, preservatives and labelling. In order to rationalise the multiplicity of food laws, a Group of Ministers (GoM) was set up to suggest legislative and other changes to formulate a modern, integrated food law, which will be a single reference point in relation to the regulation of food products. A Draft Integrated Food Law (IFL) has been cleared by the GoM in its meeting on April 5, 2005. The Draft IFL is likely to be submitted to the Cabinet soon.
National Institute of Food Technology and Management
The Ministry of Food Processing Industries proposes to set up a National Institute of Food Technology and Management (NIFTEM). NIFTEM’s role would be to develop world-class food technologists and train entrepreneurs and managers in the food industry, providing business incubator services and undertake research. The project cost as per the feasibility report is Rs. 166 crore. The proposal has been cleared by the Planning Commission in principle.
An investors’ meet in the FPI sector for the North Eastern Region was held at Guwahati on April 19, 2005. The meeting deliberated on ways and means for promoting food processing industries in the region. Another investors’ meet was organized at Srinagar in J&K during April 26-27, 2005. The conference reviewed the progress and also deliberated on ways and means to promote FPI in J&K. Similar Investors’ Meet will be organized all over the country. It has also been decided to organise an International Investment Conference in August, 2005.
The Government is to support the establishment of one modern food processing industry/food park in each Parliamentary constituency. The Government has also decided to support the establishment of 10 mega food parks in the country. The annual AAHAR Exhibition will be upgraded to international standards.
In the budget of 2004-05, the Government allowed under Income Tax Act, a deduction of 100 per cent of profit for five years and 25 per cent of profits for the next five years in case of new agro processing industries set up to process, preserve and package fruits and vegetables. Excise duty of 16 per cent on dairy machinery was reduced to zero for promotion of dairy processing industries. Excise duty on meat, poultry and fish reduced from 16 per cent to 8 per cent and excise duty on food grade hexane used in edible oil industry was reduced from 32 per cent to 16 per cent.
For making value addition in palm oil sector, customs duty on refined palm oil fixed at 75 per cent. For crude palm oil, the customs duty remains at 65 per cent. Paddy Processing Research Centre at Thanjavur, Tamil Nadu will be upgraded and modernized and it will have institutional tie-ups with Jadavpur University, West Bengal, to cater to the needs of eastern India.
It has been decided to set up quality labs in four zones of the country. Maharashtra Government will be helped in setting up wine institutes at Nasik and Sangli. A Wine Board to be set up to promote the wine industry.
The Government has decided that a Fishery Development Council (FDC) and Meat Development Board (MDB) be constituted.
In the Budget of 2005-06, several measures were announced for the FPI sector: They include abolishing of excise duty of Re. 1.00 per kg. on refined edible oil and Re. 1.25 per kg. on vanaspati; reduction of customs duty on refrigerated vans from 20 per cent to 10 per cent; setting up of nine Food Processing Training Centres (FPTCs) train rural entrepreneurs in different parts of the country; launching of 307 entrepreneurial development programmes (EDPs) to train some 6,750 potential entrepreneurs; financial assistance approximately amounting to Rs. 69 crore to 230 FPI units, attracting investment of about Rs. 414 crore from the private sector; setting up of four new food parks, i.e., one each at Gorakhpur(UP), Dindigul(TN), Medinipur and Howrah(WB) and streamlining of project approval procedures.
RK:LV
PIB SF-29 (13.05.2005)
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