MINISTRY PITCHES FOR UNIFORM 4% VAT ON BASIC PROCESSED FOOD, ZERO EXCISE ON GRAINS, SPICES
NEW DELHI, December 13, 2006. The Ministry of Food Processing Industries has urged the Finance Ministry to consider a uniform VAT of 4% on all basic processed foods, nil or low excise duty on food grains, condiments & spices and fruits & vegetables and strong fiscal support for R&D in the food processing sector. This was stated here today by the Mr. P I Suvrathan, Secretary, Ministry of Food processing Industries while unveiling the strategic interventions proposed by the Ministry to give a shot in the arm to the sector. Addressing an Industry Consultation Meeting on ‘Strategy for Enhancing Growth & Competitiveness of the Food processing Sector in India organized by FICCI and the National Manufacturing Competitiveness Council (NMCC), Mr. Suvrathan said the Ministry was looking beyond just five years and had zeroed in on four key areas – creation of a corporate structure at the district level in the shape of mega food parks, setting up of modern and hygienic abattoirs, upgradation in quality of street food and provision of fiscal incentives to drive the growth of the industry. Dr. V. Krishnamurthy, Chairman, NMCC spotlighted the potential of the food processing sector in increasing farm incomes and creation of jobs. He said the decisions relating to the growth of the sector would be finalized in the next two days, the overall approach being to begin modestly, score early wins and then replicate the pilot projects in other parts of the country.
Mr. Suvrathan the government had decided to set up mega food parks in 30 districts of the country at a cost of Rs. 50 crore each for accessing the farmer. Under the scheme, the processor and the retailer would reach out to the farmer, especially farm and marginal framers, tailor production, and quality of the produce to raise farm productivity and meet the exacting export norms. The results of the pilot food parks will be evaluated for the next three years before being replicated in other districts.
Describing meat processing as the most neglected area, the Secretary said, about 50 modern abattoirs would be established in the next two to three years with the provision of viability gap funding. While the regulation of the abattoirs would be done by the municipal authorities, the management will be left to a private party who would be appointed through a competitive selection process. He said the street food scheme would be initially tried out in eight cities. The private sector would be involved in the certification, development of standards for the sale of hygienic food sold by mobile vendors. This scheme would be extended after three months to 50 other cities in the country.
Mr. Suvrathan also announced that a Central Food Authority would be in place in a few months to oversee the implementation of the integrated food law in place of the 16 laws that govern the food sector.
Mr. V. Govindrajan, Member-Secretary, MNCC, said the food processing industry has been identified as a priority manufacturing sector by NMCC. The High Level Committee on Manufacturing president over by the Prime Minister would act on the advise of an Empowered Sub-Committee, comprising Member, Planning Commission and secretaries of the ministries concerned. The Sub-Committee would outline the areas needing priority attention and how the implementation was to be done. Mr. P M Sinha, Chairman, FICCI Agriculture Committee, underlined the need to persuade the retail chain to develop backward linkages with the farmers to improve their productivity and produce for the market. He suggested that the integrated food law in its practical form should be modeled on the lines of the law in Thailand to attract foreign investment.