October 7, 2009 4:17:22 am
Lamenting high level of wastage and very low value addition in farm products in the country,Prime Minister Manmohan Singh has called for rationalisation of tax structure for the food processing industry a move that can transform the rural economy. I recognise that we need to look at the taxation structure in the industry. Though primary agricultural commodities are mostly exempted from taxes,processed foods are subjected to multiple levies. There is,therefore,an urgent need to rationalise and simplify the tax structure, the PM said while addressing the conference of state food processing ministries here on Tuesday.
Singh lamented low level of processing of farm products,which stands at only 6 per cent as against 60-80 per cent processing in developed countries and over 30 per cent in most Asian and Latin American developing countries. He said this amounts to loss of business opportunities as well as losses in farm income in rural India.
Highlighting 15 per cent growth rate of food processing industry last fiscal year,despite economic downturn,Singh underlined the need to strengthen infrastructure,widen innovation and technological development for the sector and work towards achieving international standards of food safety and quality to compete in the global markets. He called upon the state governments to engage pro-actively in promoting food processing industry for the benefit of the economy.
The state governments can play and should play an important catalytic role in this effort in partnership with bankers,financial institutions and technical and management institutions. SME clusters could be identified for all-round upgradation by infusing new technology,new packaging methods and by providing adequate marketing support. This is a sunrise industry and if we give it the importance it deserves,it has the potential to dramatically improve rural livelihood opportunities and employment,to bridge the rural-urban divide and to improve farming methods , he said.
Union Food Processing Industry Minister Subodh Kant Sahay said the Centre has projected an investment of Rs 1 lakh crore from private sector,in the sector by 2015.
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