Budget 2021 Expectations: CII said that a Rs 2000 crore fund has been created under NABARD to provide affordable credit for setting-up of new or modernization of existing food processing units in designated food parks.
All COVID-related protocols would be followed during the session.
Industry body CII on Tuesday said it has demanded higher allocation of fund for food processing schemes and tax incentives for exports of agriculture and food items.
In a pre-Budget meeting with senior finance ministry officials, CII highlighted the need to find ways for tapping export markets for wheat.
“For wheat, on one hand we have the surplus but on the other hand we are uncompetitive in the global market. Thus, there is a need to find ways of offsetting this comparative disadvantage to manage surplus & tap export markets,” CII said in a statement.
Stating that the RoDTEP (Remission of Duties or Taxes on Export Products) Scheme will replace MEIS (Merchandise Exports from India) Scheme with effect from 1 January 2021, the industry body said rates have to be finalized in a way to make exports competitive.
RoDTEP rates for food and agri products be benchmarked appropriately to ensure competitiveness of exports, it added.
CII demanded that the revenue expenditure incurred on notified agricultural extension projects under Section 35CCC of the Income-tax Act should allow a higher weighted deduction of 200 per cent as against existing 100 per cent.
All public warehouses in India should be registered with WDRA (Warehousing Development Regulatory Authority) in phased manner. Further, mandatory issuance of electronic warehouse receipts in all registered warehouses is needed.
It proposed to establish ‘Citrus Board’ and ‘Branding and Market Development Board’ and said necessary allocations should be made in the Union Budget 2021-22 towards establishment of these boards.
“While the Ministry of Food processing Industries has taken up execution of the “TOP’ scheme for effective implementation of the scheme under cluster approach necessary allocations should be made in the Union Budget 2021-22,” the statement said.
Low interest finance and other benefits of SAMPADA scheme of Food Processing ministry should be made available outside Mega Food parks too in order to create a level playing field for the food industry, the CII said.
As announced in the 2018-19 Union Budget, there is a need to expedite the establishment of a Bank/Financial Institution for the food processing industry.
To facilitate investment in food processing industry, CII suggested that for existing projects, any additional capital investment of more than 50 per cent of existing book value of plant and machinery should be treated as new investment and should also be eligible for a five-year tax holiday, under section 80IB(11A).
For existing projects, any capital investment should be extended 50 per cent accelerated depreciation to encourage modernisation; and the investment development allowance should be re-introduced, the association said, adding that such depreciation has been provided up to 150 per cent to various sectors such as energy, environment, computers, textiles etc.
“With a view to boost the MSMEs that form a majority of the units in the Food processing sector, the 25% Income Tax benefit, that was announced in the last budget to the MSMEs which have been incorporated as companies, may also be extended to the MSMEs that have been incorporated either as the Limited Liability Partnerships (LLPs) or as Partnership firms,” CII said.
To position India as the food factory to the world and promote value added processed food products abroad, CII said 200 per cent deduction on expenditure incurred on promoting Indian Branded food items should be allowed.
CII said that a Rs 2000 crore fund has been created under NABARD to provide affordable credit for setting-up of new or modernization of existing food processing units in designated food parks.
However, it said that limiting the funding assistance only to units in designated food parks is a inhibiting factor. It recommended that — eligibility for credit under this fund should be extended to all food processing units (not only those located in the designated food parks).