Notwithstanding the current global meltdown and GDP growth rate projection in India, Rs 1 lakh crore would be invested in the $200-billion Indian food industry by the end of 11th plan period (2011-12). Minister of state for food processing Subodh Kant Sahai said this here on Thursday while delivering his inaugural address at the two-day global conference?FoodWorld India 2008. It was organised by Ficci in association with the ministry of food processing, state governments of Maharashtra and Kerala, and State of Illinois.
Sahai called upon the panic-stricken investors to invest their money in the fast-growing food sector. The sector has grown to 13.14% in 2006-07 from 7% in 2002-03. It would further grow owing to the investor-friendly policies and a corpus of Rs 1,000 crore created by the National Bank for Agriculture and Rural Development (Nabard) for financing investments in the food sector, Sahai said.
Sahai however, admitted that the different VAT rates imposed by various states was a matter of concern. According to him, the issue has also been taken up with the empowered committee of state finance ministers. ?I have repeatedly taken up the matter with state governments.
Some of them have given positive response. States should not impose VAT for perishable items while only 4% VAT should be imposed on non-perishable items,? he said. The Centre has already rationalised taxes on milk, meat, import of dairy machinery and other segments, he added.
Sahai was responding to the concerns expressed by chairman of Ficci Maharashtra State Council Ness Wadia over the taxation rates. He pitched for restructuring VAT, excise duty and other taxes imposed on food sector. Besides VAT, the amended Agriculture Produce Marketing Act is yet to be enacted in various states.
The amendments facilitate better marketing of farm products. Similarly, initiatives taken by various states for contract farming will be helpful for farmers.