NITI Aayog’s appraisal document for the 12th Five-year Plan has strongly pitched for clear tax policies and vision vis-à-vis the manufacturing sector and has proposed to reduce the duration of the Five-year Plan to a three-year action plan. The document has also identified food processing as a major sector for propelling growth.

It called for a healthy growth in labour-intensive sectors, including food processing. The focus was on jobs for workers with limited skills. However, the food processing industry expects alignment of policies and actions on ground.

Sagar Kurade, immediate past president, All India Food Processors’ Association (AIFPA), said, “It’s a positive development if policy makers think about food processing in such a manner. If India has to grow, the value addition in agri commodities would be a way to add more to the gross domestic product (GDP) numbers. It’s always been a low-hanging fruit, but is somewhat neglected.”

“In terms of policy initiatives, a lot has changed in the last one decade but a lot is needed. Serious encouragement is needed for the sector, particularly for the micro, small and medium enterprise (MSME) sector, which is the backbone of the food processing sector,” he added.

Kurade said that the food processing industry in India offered tremendous opportunities for value addition of India’s large agriculture and horticulture commodity-based industry.

“The year 2016 saw a close working relationship developing between the Food Safety and Standards Authority of India (FSSAI) and various industry and consumer bodies. It witnessed regulatory concerns of the industry being addressed, while the industry worked towards migrating to standards in line with international expectation,” he said.

And, the ministry of food processing industries (MoFPI) also tried to infuse funds in the sector by means of policies related to foreign direct investment (FDI) in food marketing.

Rakesh Sharma, food and beverage consultant based in Kota, Rajasthan, said, “On the policy front, government has cracked FDI in marketing and manufacturing of the food products in India. It should also promote FDI in export of food products.”

“There is a need to track the success of a plant or a small set-up to which the government has extended loans that too in real time. There is no need to check the performance of a food park or food cluster through a study. There should be a real-time report on how the food parks are performing, so that it will enable the government to change the policies if the results are not favorable,” he added.

According to sources, NITI Aayog’s appraisal document also found that the food processing sector and reforms in the Agriculture Produce Marketing Committees (APMCs) would help in achieving double-digit growth. It opined that the eight per cent growth was achievable.

Sharma added, “NITI Aayog is working to bring in reforms for farmers, which is good and credible. But if there are ample processing units and lesser APMC restrictions, which, across the states of India for domestic trade, will lead to facilitating both the food processing and agriculture sectors.”

The document also mentioned the need for steps to revive and sustain growth in agriculture with more focus on high-value commodities like horticulture, fisheries and livestock.

As far as the suggested three-year action plan was concerned, Sharma said, “The idea of a three-year plan seems to be a reality now. Instead of waiting for five years to gauge the development, one can easily reformulate the needed policies to suit the needs of the departments. Short-term goals will address the major issues.”

“The food processing sector being one of the thrust sectors, there is an acute need to address the marine sector which accounts for several opportunities on the processing front,” he added.

“Food business operators (FBOs) are given all the major tools and help like loans and tax subsidies, but the government should at least impart training to those who take loans from the government to set up their own businesses,” Sharma said.

“An export promotion authority should be set up or formulated in the existing authorities to deal with exports and train the FBOs on the export front,” he added.

Meanwhile, Kurade hoped that the current financial year would help the industry by means of goods and service tax (GST) and lower rates.

“The industry hopes that 2017 would see low GST rates for most of the food products. While India is the only country in the world to have four slabs on GST, the food processing industry expects most of the food products to fall under the zero to five per cent category,” he added.

“The food processing industry, which is directly linked to farmers’ benefits, hopes to be encouraged further through the policies of both the Central and state governments,” Kurade said.