In a bid to attract foreign direct investment (FDI) into the food processing industry, the government is working out a strategy for giving tax holidays to foreign investors for the next five years. According to Subodh Kant Sahai, minister for food processing, the focus would be to ensure that the average annual growth of 13.5% in the sector at present will be doubled over the next few years. Sahai hopes to meet the target of Rs 1 lakh crore investment in the food processing sector in five years.
"We are emboldened by the rising paying capacity of the middle class and we are now concentrating on how to reach to the farmers through demand-driven, market-oriented policies to build the economic sustainability of our farmers," Sahai said after meeting industry leaders in the food processing sector.
He said the proposed policy would seek to ensure that the food processing sector receives fiscal benefits on the lines of sectors such as telecom and information technology. Industry representatives also informed the minister that the government needs to take immediate steps towards dealing with the issues such as increasing the processing levels, decreasing wastages, inadequate cold chain infrastructure, regulatory constraints, fiscal incentives, and cross departmental issues concerning the APMC Act and modern retail.
"We are now working on a scheme to train the farmers so that they become entrepreneurs by adopting scientific practices and technical know-how," Sahai said at the meeting organized by the Ficci. Ha also urged industry to support the government in raising technical standards, research and development (R&D) efforts.
Ficci president Harsh Pati Singhania said the FMCG sector, as a whole, was growing at 20% while the food processing segment was expanding at 15% a year. With more investment, the sector could grow at a much faster rate, he said.
PepsiCo India's director of corporate affairs Sunil Duggal, who attended the meeting, told reporters that the industry had called for 100% tax-breaks for investments in R&D in food processing. "R&D requires a huge amount of investment. There are still blockages in tax breaks in R&D investment which need to go." He also said while the industry was performing well, the limited infrastructure and fiscal structure of the industry were proving to be stumbling blocks to higher growth.
Source : fnbnews
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