Tax relief for Speedy growth

            In the budget of 2004-05, the Government allowed under Income Tax Act, a deduction of 100 per cent of profit for five year 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 has been reduce to zero for promotion of dairy processing industries.

 

            Excise duty on meat, poultry and fish has been reduced from 16 per cent to 8 per cent.

 

            Excise duty on food grade hexane used in edible oil industry has been reduced from 32 per cent to 16 per cent.

 

            For making value addition in palm oil sector, customs duty on refined palm oil is fixed at 75 per cent, whereas, the same for crude palm oil remains at 65 per cent.

 

In the Budget of 2005-06 the following measures were announced for FPI  Sector:

 

Ø                   Excise duty of Rs.1.00 per kg. on refined edible oil and Rs.1.25 per kg. on vanaspati abolished.

Ø                   Customs duty on refrigerated vans reduced from 20 per cent to 10 per cent.

 

In the budget of 2006-07 the following measures were announcer for FPI Sector:

 

Ø                   Custom duty on packaging machines to be reduced from 15 per cent to 5 per cent.

Ø                   Custom Duty on Vanaspati increased to 80 per cent.

Ø                   Excise duty on condensed milk, ice cream, preparations of meat, fish and poultry, pectins, pasta and yeast to be fully exempt.

Ø                   Excise duty on ready-to-eat packaged foods and instant food mixes, like dosa and idli mixes, to be reduced from 16 per cent to 8 per cent.

Ø                   Excise duty on packaging paper has been reduced from 16 per cent to 12 per cent.

 

Other Announcements

            Food Processing to be a priority sector for bank credit; NABARD to create a refinancing window with a corpus of Rs.1,000 crore, especially for agro-processing infrastructure and market development.

 

            National Institute of Food Technology Entrepreneurship and Management is to be set up.  Paddy Processing Research Centre, Thanjavur and to be developed into a national– level institute.

 

Integrated Food Law

At present thirteen different laws affect food and food processing sector. Multiple laws/regulations prescribed sector.  Multiple laws/regulations prescribe varied standards regarding food additives, contaminants, food colours, preservatives and labeling.  In order to rationalize multiplicity of food laws, a Group of Ministers was set up to suggest legislative and other changes to formulate modern integrated food law, which will be a single reference point in relation to regulation of food products.  Draft Integrated Food Law has been prepared and the same has been cleared by GoM in its meeting held on April 5, 2005.  the Food Safety and Standards Bill, 2005 approved by the Cabinet on August 4, 2005, was introduced in the Lok Sabha on August 25, 2005.  The Bill was referred by the Hon’ble Speaker to the Parliamentary Standing Committee on Agriculture for examination and Report.  The Committee held a series of meetings with the concerned Union Ministries and other stakeholders, including industry associations and consumer organisations and submitted its Report to Parliament on February 21, 2006.  After examination of the report of the Committee, a Note for the Cabinet has been prepared in consultation with Ministry of Law and Justice and sent to the Cabinet Secretariat on April 21, 200, for placing the same before Cabinet for consideration and approval of amendments arising out of Standing Committee recommendations.  The Cabinet, in its meeting held on April 27, 2006, considered the proposal and directed that unresolved issues be identified and settled by the GoM on Integrated Food Law.

 

Vision, Strategy and Action Plan

            A Cabinet Note on Integrated Strategy for promotion of agri business as contained in the Vision Document of the Ministry was circulated to the Cabinet.  After considering the proposal a decision was taken to appoint at GoM to consider the matter further.  In order to finalize the matter the GoM is holding a series of meetings.

 

FDI in Food Processing

            Actual FDI inflow in food processing sector in 2004-05 and 2005-06 (till November, 2005) was Rs.332.00 crore.

 

SCHEMATIC ACHIEVEMENT

 

Institutional/HRD Support

 

Ø                   29 Food Processing Training Centres (FPTCs) have been set up to provide hands on training experience to rural entrepreneurs in different parts of the country during the last two years (May 2004 to May 2006).

Ø                   470 Entrepreneurial Development Programmes (EDPs) were launched to give training to potential entrepreneurs. 

Ø                   Financial assistance amounting to Rs.120.89 crore released to as many as 451 FPI units.

Ø                   Seven Food Parks have been approved during 2004-05 and 2005-06 by the Ministry.

Ø                   Project approval procedures streamlined, fortnightly PAC meetings are being held and clearance expedited.

Ø                   A time frame for processing of project cases prescribed for the first time.

 

Increased Interaction with State governments for Development of FPI Sector as the State Nodal Agencies play a crucial role in overall development of food processing industries in the concerned State/UT.  In order to discuss about problems of FPI, a conference of SNAs was held on October 13, 2004, and on January 12, 2006 in New Delhi.  In order to discuss about ways and means for speedy development of food processing sector, a Conference of State Ministers of Food Processing was also held on November 5, 2004, at Vigyan Bhawan, New Delhi.  In order to discuss about ways and means for speedy development of food processing sector, a Conference of State Ministers of Food processing was also held on November 5, 2004, at Vigyan Bhavan, New Delhi.  The conference discussed about need for framing an integrated Food Law, lowering of sales tax and other taxes on food products, amendment to APMC Act. Etc.

 

National Institute of food Technology and Management

Ministry of Food Processing Industries proposes to set up a “National Institute of Food Technology and Management (NIFTEM)”.  The  roles envisaged for NIFTEM are aimed at development world-class food technologists, entrepreneurs and managers in the food industry, providing business incubator services; undertake research, provide training etc. The Project cost as per the feasibility report is Rs.166 crore.  The proposal has been cleared by the Planning Commission in principle.  Further action is being taken.

 

Investors’ Meet

Investors’ Meet for FPI Sector for Northern Eastern Region including Sikkim was held at Guwahati on April 19, 2005.  The meeting chaired by the Minister of FPI deliberated on ways and means for promotion of Food Processing Industries in the Region.

 

Another Investors meet was organised at Srinagar in J&K on April 26-27, 2005.  The conference chaired by the Minister, FPI, reviewed progress of Food Parks and also deliberated on ways and means for promotion of FPI in the J&K.

 

Promotional Activities

 

Ø                   MFPI participated in Food Pro – 2005.  FOODPRO – 2005 at Chennai from November 11-15, 2005, being organized by CII, Chennai in a space of 50sq.mts. in association with Directorate of E&VP, Southern Region, IIP, Mumbai, DFRL, Mysore etc. to show case strength and potential of processed food sector to the entrepreneurs and business visitors.

Ø                   Supported FICCI New Delhi for organizing a global convention on Food Processing called “Food World India 2005” from November 28-30, 2005, at Vigyan Bhavan, New Delhi with an objective to create a platform to bring together the world leaders in Food Processing Industries & to highlight India’s potential in this sector.

Ø                   MFPI participated in IFE India 2005 held at Pragati Maidan, New Delhi from December 8-10, 2005, through the Office of Directorate of F&VP, Northern Region, New Delhi by hiring a space of 18 sq. meters to show case strength and potential of processed food sector to the entrepreneurs and business visitors.

Ø                   MFPI participated in Destination Uttaranchal 2005 held at Dehradun from December 7-11, 2005, through the Sub Regional Office of Direct orate of F&VP, Lucknow by hiring a space of 18 sq.mts. to show case strength and potential of processed food sector to the entrepreneurs and business visitors.

 

Ø                   Supported Federation of Indian Chambers of Commerce & industries (FICCI), New Delhi for organising “Focus East” conference held at Kolkata from January 30-31, 2006.  The conference is aimed to provide an opportunity and an interactive platform to all stake holders i.e. State governments, industry entrepreneurs, banks and financial institutions, technology and R&D organisations etc. for deliberating on crucial aspects relating to development of food processing sector in the States of West Bengal, Orissa, Bihar and Jharkhand.

Ø                   MFPI participated in India Food Expo 2005 at Lucknow from January 9-12, 2005, organised by Indian Industries Association, Lucknow in a space of 18 sq. meters to disseminate information to the prospective business visitors and entrepreneurs in the field of food processing industries through the Sub-Regional Office of Directorate of F&VP, Lucknow, by distributing copies of Ministry’s plan schemes and other publicity materials for disseminating information on processed food sector.

Ø                   MFPI participated in International Seafood Show-2006 at Kolkata during February 3-5, 2006, which was organised by MPEDA, in a space of 18 sq.meters to disseminate information to the prospective business visitors and entrepreneurs in the field of food processing industries through the Regional Office of Directorate of F&VP, Kolkata by distributing copies of Ministry’s plan schemes and other publicity materials for disseminating information on processed food sector.

Ø                   MFPI participated in AAHAR 2006, organised by ITPO during March 8-12, 2006, at Pragati Maidan, New Delhi in association with APEDA, Industry Associations, State Nodal Agencies of Northern Region and Directorate of F&VP, Northern Region, NERAMAC, Guwahati and MAIDC Mumbai.

Ø                   A seminar was organised by AIFPA  with support from MFPI on “Quality Assurance for Indian Processed Foods and Overcoming Trade Barriers” on March 10-11, 2006, during AAHAR 2006.

Ø                   MFPI participated in North East Agri Expo 2006 organised by M/O Agriculture through CII, New Delhi at Dimapur, Nagaland during March 27-31, 2006, by putting up a stall of 18 sq.mts. of area to display this Ministry’s policies, publicity literature etc. to showcase our strength, potential for promotion of FPI in the North East region.  An ‘Investor’s Meet’ was also organised by CII on behalf of MFPI during the Expo to highlight the investment potential and opportunities in this sector to the prospective entrepreneurs and investors.

Ø                   A seminar was organised by ASSOCHAM, New Delhi with support from MFPI on “Emerging Opportunities & Challenges in Processed Food Sector – Focus-North” which is being organised by ASSOCHAM, New Delhi held at Chandigarh on April 11, 2006.

Ø                   Ministry of FPI supported a Seminar on Food Processing Industries on April 27, 2006, at Ahmedabad, which was organised by Gujarat Chamber of Commerce & Industries, Ahmedabad.

 

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