South Asia Radius

Little for processors in India’s Budget, but rural sector will cheer

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock
Reaction to last week’s Indian Budget has given rise descriptions ranging from “businesslike”, by a chamber of commerce chief, to “game-changing” by the head of Walmart India—though food processors might have been left wondering what was in it for them.

In his annual financial statement to Parliament, Arun Jaitley was particularly benevolent to the rural sector as he announced a Rs80bn (US$11.9bn) dairy industry fund and made reference to reforming the rules governing the marketing of perishables. 

Currently, these are set by the various state agricultural produce market committees (APMCs), and many industry figures, including Jaitley, believe that removing fruits and vegetables from APMC regulations

"Market reforms will be undertaken and the States would be urged to de-notify perishables from APMCs. This will give opportunity to farmers to sell their produce and get better prices​," the finance minister said.

Meanwhile, India’s dairy industry is waiting to find out the detail of a proposed processing and infrastructure development fund, to be set up by the National Bank for Agriculture and Rural Development.

Jaitley said the government would initially inject Rs20,bn (US$3bn) into the fund, which would grow fourfold in three years and be used to enable India’s milk-processing capacity to expand. 

Beyond the minister’s comments in the Lok Sabha, little is known of the plan, and it is certain whether the fund will be available to India’s current 450 private dairies, as well as to the 400 co-operatives.

According to analysts, it is equivalent to 450 new plants with a processing capacity of more than 200,000 litres per day. In 2015, India’s milk and dairy market was estimated to be worth some Rs5.26tr (US$78.1bn).

At an average procurement price of Rs30 per litre, this investment can help pump in over Rs49,000 crore annually to farmers​,” said RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation, which owns India’s largest dairy and food brand, Amul.

This, however, appeared to be the only concession he made to the food processing industry, thwarting hopes among the private sector that initiatives to reward companies for investing would be leading their way.

Some industry figures have focused their praise on what they regarded as necessary benevolence to farmers. Krish Iyer, chief executive of Walmart India, said the Budget’s generosity to the rural, agriculture and infrastructure sectors would give boost to formal economy. Other measures announced by the finance minister to cut red tape for businesses “augurs very well for the economy​”.

There was disappointment, though from edible-oil industry body SEA, which had hoped in vain that Jaitley would increase import duties on edible oils and offer goodies to farmers to promote mechanisation.

More stories from South Asia…

Carb-laden breakfasts the unhealthiest meal of the day for Indians

Breakfast appears to be the most unhealthy​ meal of the day for Indians, according to a study that assessed 43m dietary records of 1m urban residents.


Conducted by health and fitness app HealthifyMe, snacks consumed during evening and morning hours make for most unhealthy eating habits.

It found that breakfast had the highest amount of carbohydrates and fat, compared to other meals, while lunch and dinner had a higher intake of vegetables. Dinner provided the most protein-laden food of the day.

Data also suggested confirmation that snacks are major contributors to diabetes, hypertension and obesity. 

Over 70% people of the sample were found either to be overweight or obese, and one-third had diabetes, hypertension or both. 

"One interesting trend we found is that the smallest foods are the biggest culprits! It is not so much of what we eat during lunch and dinner but what we snack on in between and after, that is causing Indian waistlines, diabetes and hypertension to skyrocket​," Tushar Vashisht, co-founder of HealthifyMe, said.

Tripura state reports fake egg crisis

Food authorities fear a state in northeast Indian is witnessing an increase in the circulation of fake eggs. 


Officials in Tripura have issued an alert to government schools to warn them to be careful while serving eggs as part of lunchtime meals.

We are giving a double thought before serving eggs to our schools,​” said Tripura’s elementary school chief, UK Chakma.

According to state officials, the fake eggs are slightly reddish in colour and bigger than regular eggs.

As most of the eggs in the remote mountain state are imported elsewhere from India, traders claim it is virtually impossible to spot the fakes. Cross-border trade with Bangladesh, which surrounds most of Tripura, and China makes it difficult for authorities to know from which country the fake eggs originate,

Some traders believe that Chinese fraudsters have been flooding Indian markets with fake eggs for some time, reaping the benefits of a higher profit margin. There have been reports of similar cases in other states, including Andhra Pradesh, Kerela and Tamil Nadu.

The fake eggs are made from calcium chloride, which smells just like eggs, and are extremely hard to detect other than by comparing their usually rougher shells with a real egg.

Related topics: Policy, India, Industry growth

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