Food Processing Ministry urges 4 pc VAT on basic processed foods

New Delhi, Dec 13 (UNI) The Ministry of Food Processing Industries today urged the Finance Ministry to consider a uniform VAT of four per cent on all basic processed foods, nil or low excise duty on food grains, condiments and spices, fruits, vegetables and strong fiscal support for R&D in the food processing sector.

Addressing an Industry Consultation Meeting on 'Strategy for Enhancing Growth and Competitiveness of the food rocessing sector in India', Mr P I Suvrathan, Secretary, Ministry of Food Processing Industries said ''the creation of a corporate structure at the district level in the shape of mega food parks, setting up of modern and hygienic abattoirs, upgradation in quality of street food and provision of fiscal incentives to drive the growth of the industry'' can boost the industry.

He said the government had decided to set up mega food parks in 30 districts of the country at a cost of Rs 50 crore each for accessing the farmer. Under the scheme, the processor and the retailer would reach out to the farmer to raise farm productivity and meet the export norms.

He said the decisions relating to the growth of the sector would be finalised in the next two days, the overall approach being to begin modestly, score early wins and then replicate the pilot projects in other parts of the country.

The results of the pilot food parks will be evaluated for the next three years before being replicated in other districts.

Describing meat processing as the most neglected area, the secretary said, about 50 modern abattoirs would be established in the next two to three years with the provision of viability gap funding.

While the regulation of the abattoirs would be done by the municipal authorities, the management will be left to a private party who would be appointed through a competitive selection process, he said.

He said the street food scheme would be initially tried out in eight cities. The private sector would be involved in the certification, development of standards for the sale of hygienic food sold by mobile vendors.

This scheme would be extended after three months to 50 other cities in the country.

Mr Suvrathan also announced that a Central Food Authority would be in place in a few months to oversee the implementation of the integrated food law in place of the 16 laws that govern the food sector.

The High Level Committee on Manufacturing presided over by the Prime Minister would act on the advise of an Empowered Sub-Committee, comprising members of planning commission and secretaries of the ministries concerned.

The sub-committee would outline the areas needing priority attention and how the implementation was to be done.

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