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Model food processing policy needed for value addition to agri, says CII

time: 2020-02-25

The Confederation of Indian Industry (CII) has urged the government to announce a model National Food Processing Policy, that will enable value addition to agri produce as well as generate jobs in rural areas, leading to higher rural incomes.

In a pre-Budget proposal to the Government, it stated that the announcement of the formulation of a comprehensive National Model Food Processing Policy for states will help capitalise on the rich and diverse food production base of the country and catalyse investments in the sector.

The recommendations read, "The policy should lead to ease of doing business, alignment between the Central and state policies and procedures, empowerment of farmers and overall growth of the sector."

At present, a few states have enacted their own food processing policies, while some others have food processing integrated in their industrial policy.

CII has also asked the government to make available the Rs 2,000 crore fund with the National Bank for Agriculture and Rural Development (NABARD) to all the food processing units, as limiting it to a few designated food parks was the biggest hindrance in the complete utilisation of the fund.

It is pertinent to mention here that a corpus fund of Rs 2,000 crore has been created under NABARD to provide affordable credit for the setting up of new food processing units or for modernisation of existing food processing units, but in designated food parks only.

In its recommendations, CII stated that limiting the funding assistance only to units in designated food parks was an inhibiting factor, and added that the facility must be extended to all food processing units to create a level playing field.

It also suggested that low-interest finance and other benefits of the Sampada scheme of the Ministry of Food Processing Industries (MoFPI) should be extended to industry outside Mega Food parks.

It also recommended the inclusion of RoDTEP (remission of duties or taxes on export products) for agri exports. The recommendations read, "The finance minister has announced the RoDTEP scheme, which will replace the existing MEIS scheme to boost Indian exports."

Currently, the garment industry enjoys additional support in the form of Rebate of State and Central Taxes and Levies (RoSCTL) which was notified in March 2019 to provide refund of duties/taxes at higher rates.

The press release suggested that textiles and other sectors, which currently enjoy incentives upto two per cent over MEIS will transit into RoDTEP. Agri products also require similar export incentives to be competitive and encourage exports.

So it was recommended that RoDTEP rates for agri products be also fixed at two per cent higher than the current MEIS.

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