Despite having been in the pipeline for nearly a decade, the Gujarat government’s recently announced ‘Agri Business Policy 2016’ has left much to be desired. Industrialists claim that despite having made representations to the state government through industrial bodies like the Confederation of Indian Industries (CII), several of their demands have been left out of the policy.
Their problems have been further compounded by the absence of industry stakeholders in a state-level implementation committee, which has been constituted for the sanction of assistance under this general resolution.
Speaking to FE, Rasna chairman and managing director and past CII Gujarat State Council chairman Piruz Khambatta said, “We had recommended 100% VAT exemption for food processing units. However, the reimbursement has been limited to a ceiling of 70% of the eligible fixed capital investment made by the units. We had also suggested that like in Rajasthan’s agro policy, companies be allowed to procure large parcels of land from farmers through facilitation by the government, and that the land ceiling be relaxed to encourage entrepreneurs to procure lands for bigger units. However, this has not been implemented at all.”
Industries had asked for land to be allotted for food processing units, similar to the IT policy, on the jantri rate of the state government. The recently-announced IT and Electronics Startup Policy saw the chief minister Anandiben Patel-led government allot 10 lakh square feet of land for the development of 50 new incubators to benefit 2,000 IT start-ups in the next five years. Ahmedabad-based consultant Rohit Bhandari said, “The policy is not as good as those implemented in states like Andhra Pradesh. The 25% capital subsidy announced by the government with a ceiling of R50 lakh is not adequate. These days, all units require at least R10 crore to be set up with the necessary infrastructure and machinery facilities.”
He rued that the limit had been R50 lakh for the last couple of years. However, his concerns were not shared by bigger industrialists who cautioned that raising the capital subsidy limit would invite those looking to indulge in fraudulent activities through misuse of funds.
Speaking to FE, Vadilal Industries managing director Devanshu Gandhi said, “The VAT reimbursement has been a great aspect of the new policy, however, more benefits must be provided for marketing produce. Providing incentives to the retail networks and putting up distribution channels will go a long way.” He added that while the power tariff subsidy at the rate of R1 per unit in agro and food processing units was a great step, it was necessary to increase it further. Keeping in mind the micro, small and medium enterprises setting up food processing units in the state, the policy has provided for assistance in acquiring quality certification mark, skill enhancement for their employees and for the cost of machinery and technical civil works (TCW).
Recommendations made by the industries for providing marketing support to MSMEs for enhancement in market development have been ignored. A revolving venture capital fund proposed exclusively for catering to the needs of entrepreneurs developing unique technologies in projects relating to agro & food processing, horticulture, hi-tech agriculture and other agro-related projects has also been overlooked by the state government in the policy.