Indian PM calls for national food processing strategy

By Mike Stones

- Last updated on GMT

Related tags: Food processing, Manmohan singh

Indian PM calls for national food processing strategy
India urgently needs a national food processing policy which incorporates tax breaks for the sector, the nation’s Prime Minister Manmohan Singh told a conference of state food processing ministers this week.

In a speech made in New Delhi and televised by videosfromindia.smashits.com, Singh said: "The policy to be effective will have to be comprehensive and adopt a number of legislative, administrative and promotional measures​.’

The policy should evolve through discussions between the states and industries.

It should promote the development of viable agri-business and agro-industry models based on different agro-climates and regions​," he said.

Simplify the tax structure

Central to his plan was the introduction of a simplified tax structure to stimulate the food processing industry.

I recognize we need to look at the tax structure​,” said Singh. “Primary agricultural commodities are mostly exempt from taxing but processed foods are subject to multiple levies. There is an urgent need to rationalize and simplify the tax structure​ [for processed food].”

This, Singh hoped, would bring India’s low level of food processing in line with other nations. The country currently has a food processing level of about six per cent, compared with up to 80 per cent in the developed countries and more than 30 per cent in most other Asian and Latin American countries, he said.
 Properly primed for growth, the food processing sector would become the engine of growth not just for the food sector but for the wider economy, said the Prime Minister.

"The food processing sector has undoubtedly the potential to be an industry driver that can transform India's rural economy​."

Despite global recession, the food processing industry in India grew at an impressive 14.7 per cent in 2008-09, he added.

Perishable commodities

In addition, Singh highlighted the need to cut the wastage of perishables commodities from the present level of 50 per cent and to invest in research and development.

The latest policy initiative is intended to build upon the government’s Vision 2015 – Strategy and Action Plan launched in 2005.

This programme aims to double India’s share in the world food processing market to three per cent; lift the level of processing of perishables from six per cent to 20 per cent; and raise value addition of such products from 20 per cent to 35 per cent.

Related topics: Policy, Industry growth, South Asia

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