Industry inputs sought to boost food processing sector

June 5th, 2009 - 9:29 pm ICT by IANS  

New Delhi, June 5 (IANS) The government has sought the food processing industry’s support to set a 100-day target for the sector.
“We are in the preparatory process of setting a 100-day target for the food processing sector and are seeking inputs from the industry,” Food Processing Industries Minister Subodh Kant Sahai said here Friday after chairing a meeting of industry representatives.

“We want the views of the industry to identify the lacunae in the policies of our ministry with regard to the sector,” he added.

Sahai, who was the minister of state with independent charge of the food processing industries in the previous government, has been promoted to cabinet rank this time.

Soon after assuming office last week, he had stated that he would take the growth rate of the industry to 20 percent from the current 14 percent within 100 days of the new government taking charge.

Talking to reporters after Friday’s meeting, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI), Sahai said the issues of food security and a second green revolution in the country came up for discussion.

“Fiscal policy, need for a regulatory authority, framing a single law for the sector, backward integration are among the various issues we discussed today,” the minister said, adding that he wanted to ensure a 100-fold growth of the sector.

According to the India Food Report 2008, prepared by data provider Research and Markets, the Indian food industry was estimated at over $182 billion, accounting for about two-thirds of the country’s total retail sector.

But India’s share in exports of processed food in the global market is just 1.5 percent at $3.2 billion.

Stating that the food processing is value addition to agriculture, he said: “The growth of this sector and that of the retail market is what will make farmers go for market-driven farming. This is the key to the economic feasibility of the farmers.”

The issue of tax concessions for the industry came up too.

“I have made this industry virtually tax-free. But, still, issues remain. For example, packaging itself costs more than the ingredients,” Sahai said.

On their part, the industry representatives sought a five-year tax holiday for the sector.

“This industry should be given a tax holiday for five years and an absolutely free ride,” Ashok Gupta, executive director of Hindustan Unilever, told reporters after the meeting.

Stating that the food processing industry in India is still in a nascent stage, PepsiCo India’s director for corporate affairs Sunil Duggal said: “There is a huge gap that has to be covered. Lack of infrastructure, cold chain facilities, proper guidelines and rules are holding back this sector.”

He said raw material and machinery in this sector should be made totally tax free.

Among others who attended the meeting were martial Rolland of Nestle India, Deepak Jolly of Coca Cola India, Gurnam Arora of Kohinoor Foods, Ravi Naware and Chittaranjan Kar of ITC and Ishteyaque Amjad of Cargill India, apart from FICCI officials.

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