Meeting with. Ministry of Agriculture, Forestry and Fisheries (MAFF), Government of Japan 8 th February, TOKYO
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1 Meeting with Ministry of Agriculture, Forestry and Fisheries (MAFF), Government of Japan 8 th February, TOKYO
2 1. Food Processing Industry in India 2. Imports of Agricultural Products in Japan AGENDA 3. Advantage Andhra Pradesh 4. Exports - Compliance for Japan 5. Policy Initiatives in Andhra Pradesh for Promoting Food Processing Sector 6. New Initiatives 7. Govt. of India 2016 Budget 8. Govt. of India Incentives for Food Processing Sector Presented By Shri. M Girija Shankar, IAS Secretary to Industries & Commerce (Food Processing, Mines & Geology) Government of Andhra Pradesh
3 Food Processing Industry in India
4 Food Processing Industry in India 2 nd Largest Arable Land in the World (Million Hcts) Largest Cattle Population in the World Climatic Diversity Allows For Year Round Supply ADVANTAGE INDIA Leading Producer of Milk, Pulses, Bananas, Tea, Wheat, Mangoes Immense potential for Food Processing Only 2.2% of total food output is processed at present Particulars Units Global Rank * Arable Land Mill. Hcts. 2 Area Under Irrigation *Year Mill. Hcts. 1 Cattle 210 Million 1 Food Processing Sector Annual Average Growth Rate 8.4% Expected to grow at 15% in next 5 years As of 2016, Food Sector is valued at $267 Billion, Food Processing sector is worth $101 Billion Total exports of Processed Foods grew at 21.3% CAGR in the last decade. 42 sanctioned Mega Food Parks, 60 Agri export zones in the Country 4
5 Food Processing Industry in India India was the sixth largest exporter worldwide in
6 12 th Five Year Plan Focus Areas Infrastructure Development Scheme Strengthening of Institutions Quality Assurance, HACCP & R&D and Promotional Activities Mega Food Parks Cold Chain, Value Addition and Infra preservation Setting up/modernisation of Abattoirs A special fund of INR 2000 Crore (USD 300 Million) to NABARD for Agro Processing units ie designated food parks National Institute of Food Tech. Entrepreneurship & Management Indian Institute of Crop Processing Technology Indian Grape Processing Board National Meat & Poultry Processing Board Quality Assurance Scheme Research & Development 6
7 Imports Of Agricultural Products in Japan
8 Japan - Agricultural Products Imports (Global) Quantity in 000 MT MILLED PRODUCTS CUCUMBER AND GHERKINS( PREPD. & PRESVD) FRESH MANGOES GUARGUM GROUNDNUTS NATURAL HONEY FRESH GRAPES CASEIN SHEEP/GOAT MEAT FRESH ONIONS WALNUTS FRUITS & VEGETABLES SEEDS PULSES ALBUMIN( Eggs & Milk) ANIMAL CASINGS DRIED & PRESERVED VEGETABLES RICE FLORICULTURE OTHER CEREALS JAGGERY & CONFECTIONERY COCOA PRODUCTS CEREAL PREPARATIONS DAIRY PRODUCTS OTHER FRESH VEGETABLES POULTRY PRODUCTS OTHER FRESH FRUITS WHEAT PROCESSED MEAT MISCELLANEOUS PREPARATIONS ALCOHOLIC BEVERAGES BUFFALO MEAT OTHER PROCESSED FRUITS & VEGETABLES MAIZE OTHER MEAT Source: UNCOMTRADE, as reported by the Importing countries (updated as on 30-September-2015)
9 Exports - Compliance for Japan
10 AP CONFORMITY TO JAPAN QUALITY CONTROL COMPLIANCE QC Standards for Marine & Aqua Products Residue Control Programmes National Residue Control Plan (NRCP) Group A - Substances having anabolic effect and unauthorized substances: Group B - Veterinary drugs and Environmental contaminants: Monitoring of Pesticide Residues at National Level (MPRNL Monitoring of Cadmium content in Cephalopods Monitoring of radio nuclides in fishes Testing of commercial samples Testing of Ethoxyquin QC Standards & Phyto Sanitary Requirements for export of Mango to Japan At Orchards Level Pre-harvest orchard survey for determining right stage of harvest of fruits Pesticide residue analysis through an accredited laboratory. Harvesting/Marking of Fruit Crates Export by Sea half maturity stage For Air Shipment Full maturity Transport of mangoes to packinghouse facility At Packinghouse Level Approval & Certification of Vapour Heat Treatment (VHT) Facility. Sealed and stamped by PPQS with marking Cleared by PQ India for Japan 10
11 A.P. AGRICULTURAL COMMODITIES EXPORTS OTHER FRESH FRUITS, 1796 OTHER PROCESSED FRUITS & VEGETABLES, 3562 ALBUMIN( Eggs & Milk ), 163 PULSES, 334 POULTRY PRODUCTS, 5203 BASMATI RICE, 110 BUFFALO MEAT, 3446 COCOA PRODUCTS, 575 WHEAT, CUCUMBER AND GHERKINS( PREPD. & PRESVD), DAIRY PRODUCTS, 239 DRIED & PRESERVED VEGETABLES, 53 FLORICULTURE, 1378 FRESH GRAPES, 51 FRESH MANGOES, 949 FRESH ONIONS, 507 FRUITS & VEGETABLES SEEDS, 734 NON BASMATI RICE, MAIZE, CEREAL PREPARATIONS, JAGGERY & CONFECTIONERY, 2800 GROUNDNUTS, 20 GUARGUM, 15 MANGO PULP, 4213 TOTAL OTHER CEREALS, MILLED PRODUCTS, 763 OTHER PROCESSED FRUITS 0.14 Total Exports 42,35,965 MT MISCELLANEOUS PREPARATIONS, MAIZE CEREAL PREPARATIONS OTHER CEREALS To JAPAN 364 MT (0.009%) FRUITS & VEGETABLES POULTRY PRODUCTS
12 A.P. AQUA EXPORTS Qty in MT Fr. Shrimp Fr.Fin Fish Others Fr.Cuttlefish Dried items Fr. Squid Chilled items Live items Total JAPAN JAPAN Total Live items Chilled items Fr. Squid Dried items Fr.Cuttlefish Others Fr.Fin Fish Fr. Shrimp
13 Advantage Andhra Pradesh
14 Andhra Pradesh-Leading Agricultural State of India Contributes % to state s GSDP (constant prices) in Forward Looking Farming Community Popularly known as the Rice Bowl of India owing to the large amount of rice grown Leading state in horticulture produce with nearly 2 million hectare (Ha) under different fruit crops 8.45 million hectares of net cultivable area with strong pulse, coconut and livestock products base. F&V, Largest producer of fruits, eggs and aqua products in India 63% of state s population employed in agriculture and related activities 14
15 AP-Attracting investments across the supply chain Sectors # Units 1679 Units Agriculture 1301 Units Horticulture 315 Units Over Food Processing Units, 2 Mega Food Parks, Multiple Agri Export Zones & Cold Chain Facilities Dairy & Poultry 15
16 Agriculture Snapshot of AP Rank In India Production in AP (Mill. MTs) Key Districts Rank In India Production in AP (Mill. MTs) Key Districts Anatapur Chittoor, Kadapa W. Godavari, Guntur, Kurnool Rank In India Production in AP (Mill. MTs) Key Districts Rank In India Production in AP (Mill. MTs) Key Districts Chittoor, Krishna Vizianagaram Anantapur, Kadapa, Prakasam Rank In India Production in AP (Mill. MTs) Key Districts Rank In India Production in AP (Mill. MTs) Key Districts E. Godavari, Anantapur, Kadapa Anantapur, Kadapa, Prakasam 16
17 Agriculture Snapshot of AP Rank In India Production in AP (Mill. MTs) Key Districts Rank In India Production in AP (Mill. MTs) Key Districts Srikakulam, Vizag, E. Godavari Guntur Rank In India Production in AP (Mill. MTs) Key Districts Kurnool, Chittoor, Anantapur, Kadapa 17
18 Agriculture Snapshot of AP Rank In India Production in AP (Mill. MTs) Key Districts Rank In India Production in AP (Mill. MTs) Key Districts E. & W. Godavari, Krishna, Prakasam E. & W. Godavari, Krishna, Chittoor Rank In India Production in AP (Mill. MTs) Key Districts Rank In India Production in AP (Mill. MTs) Key Districts Prakasam, Chittoor, Krishna Prakasam, Chittoor, Krishna 18
19 District Profile (1/13) 19
20 District Profile (2/13) 20
21 District Profile (3/13) 21
22 District Profile (4/13) 22
23 District Profile (5/13) 23
24 District Profile (6/13) 24
25 District Profile (7/13) 25
26 District Profile (8/13) 26
27 District Profile (9/13) 27
28 District Profile (10/13) 28
29 District Profile (11/13) 29
30 District Profile (12/13) 30
31 District Profile (13/13) 31
32 Robust Infrastructure and Ample Skilled Labour Good road network ROBUST INFRASTRUCTURE 4 major ports 4 active airports 24 X 7 power 10 lakh acres land bank VCIC and CBIC Large base of skilled manpower Over 120 polytechnics 225 engineering colleges 35 pharmacy institutions Strong diaspora active in the sector SKILLED LABOUR 32
33 Power, Land & Connectivity Power 1 st state in South India to offer 24X7 power to industry Capacity Addition from 9,600 MW to 17,000 MW by 2019 through solar, wind, thermal Massive Strengthening of electricity grid 3.5 GW of Solar Power capacity being added Land Existing land bank of 300,000 acres, adding further 700,000 acres, total planned land bank of 1 million acres GIS enabled online Land Bank information Affordable land rates and land given on 99-years lease Scope for developing industrial parks on PPP basis Connectivity Ports 6 under operation, 6 under development and 5 planned Airports 6 existing, 1 mega Aerotropolis and 5 no-frills airports to be developed Road Network 45,000 km (4,423 km of National Highways) Railway - 7,040 track km of network Inland Water Transport km National Waterway 33
34 Conducive Business Environment 2 nd Rank amongst Indian States (World Bank Study for DIPP, Govt. of India, September 2015) EASE OF DOING BUSINESS State Rank (Score) Gujarat 1 (71.14%) Andhra Pradesh 2 (70.12%) Jharkhand 3 (63.09%) Chhattisgarh 4 (62.45%) Madhya Pradesh 5 (62.00%) COUNTRY DESKS FOR STRATEGIC PARTNERS APPROVALS IN 21 DAYS SINGLE DESK PORTAL (identified as Best Practice by World Bank) INVESTMENT FACILITATION OFFICERS INVESTMENT TRACKER 34
35 Recent Investment Commitments by Major Food Processing Companies Home to PepsiCo's biggest manufacturing unit in the country, Expected to benefit 32,000 mango farmers. Ultra Mega Food Parks being set up by leaders like Jain Irrigation to boost agro processing Britannia Industries Ltd. has set up a biscuit manufacturing facility in Kuppam, Chittoor. MAJOR PLAYERS IN AP 35
36 Policy Initiatives in Andhra Pradesh for Promoting Food Processing Sector
37 AP Food Processing Policy OBJECTIVES Make Andhra Pradesh one of the most preferred destinations for food processing industries Develop commodity-based clusters to enable a focused and planned approach to developing the food processing industry Identify and bridge existing infrastructure gaps affecting the industry Promote innovation, research & development in the industry and ensure continuous technology up gradation. Develop Andhra Pradesh as an Innovation Society of global repute Undertake capacity building and enhance competitiveness of food processing industry in both domestic and international markets. TARGETS Attract new investments worth Rs 5,000 Crore (USD 770 Million) in the sector by 2020 Create 50,000 additional employment opportunities in the sector by
38 Highlights of AP Food Processing Policy Interest Subvention Investment Subsidy Skill Development Power Tariff Subsidy Marketing Assistance Research & Development VAT/CST/SGST Concession Transport and Export Incentives Quality certification/patent registration 10 All permissions and clearances in 21 days under Single Desk Policy 38
39 Schemes Under A.P. Food Processing Policy
40 Schemes Under A.P. Food Processing Policy Mega Food Parks Eligible Maximum Grant 50% of the Project Cost Limited to Rs 50 Crs. (USD 7.7 Million) Land Required - 50 Acres Integrated Food Parks Eligible Maximum Grant 50% of the Project Cost Limited to Rs 20 Crs. (USD 3 Million) Land Required - 30 Acres New Food Processing Units Eligibility 25% of the Project Cost limited to Rs.5 Cr (USD 770K) includes Plant & Machinery & Technical Civil Works Interest Subsidy 5 Years from 7% limited to Rs.2 Cr (USD 300K) 40
41 Schemes Under A.P. Food Processing Policy Cold Chain Units Eligible Maximum Grant 35% of the Project Cost Limited to Rs 5 Crs. (USD 770K) Interest Subsidy 5 Years from 7% limited to Rs.2 Cr (USD 300K) Primary Processing Units / Collection Centers Eligible Maximum Grant 50% of the Project Cost Limited to Rs 2.5 Crs. (USD 380K) Interest Subsidy 5 Years from 7% limited to Rs.1 Cr (USD 150K) Upgradation / Modernization of existing FP Units Eligibility 25% of the new / upgraded equipment cost limited to Rs.1 Cr (USD 150K) 41
42 Schemes Under A.P. Food Processing Policy Modernization of Abattoirs Eligible Maximum Grant Rs 15 Crs. (USD 2.4 Million) Maximum eligible grant is 50 % of Plant & Machinery and Technical Civil Work Reefer Vehicles / Mobile - Pre Cooling Vans Eligible Maximum Grant Rs 10 lakhs (USD 15,400) per vehicle. Eligibility 50 % of cost of the reefer vehicle Setting up of Testing Labs Rs 5 Crs. (USD 770K) for NABL approved labs Rs 5 lakhs (USD 7,700) for existing Food Processing units Eligibility 50 percent of the project cost 42
43 Schemes Under A.P. Food Processing Policy Units for Processing of Waste Produced in FP Units Eligible Maximum Grant Rs 2 Crs. (USD 300K) Maximum eligible grant is 50 % of Plant & Machinery and Technical Civil Work The Objective of the scheme is to ensure proper utilization of the waster generated by the food processing unit in the clusters, primarily organic residue of the processed raw material. 43
44 Incentives Under A.P. Food Processing Policy
45 Incentives Under A.P. Food Processing Policy Ease of Doing Business Food Processing will be declared as Public Utility under Industrial Disputes Act 1947 GoAP shall facilitate land clearance under Single Desk Policy Land Conversion Charges & Stamp Duty Exemptions GoAP will reimburse the Non-Agriculture Land Assessment (NALA) tax as applicable for conversion of land for setting up Food Processing units 100% reimbursement of stamp duty and transfer duty on purchase or lease of land/shed/buildings. 45
46 Incentives Under A.P. Food Processing Policy Capital Subsidy 25% of project cost (includes P&M, technical civil works), up to Rs 5 Crore (USD 750K) for new units 25% of new/upgraded equipment cost, limited to Rs 1 Crore (USD 150K) for technology upgradation 50% for setting up Primary Processing Centers (PPCs) and Primary Collection Centers (PCCs) limited to Rs 2.50 Crore (USD 375K) 35% for setting up cold chain for agriculture/horticulture/dairy/meat produce, up to a Rs 5 Crore (USD 750K) 7% per annum on term loan taken for fixed capital investment, for a period of 5 years from commencement of operations, up to Rs. 2 Crore (USD 300K) Interest Subsidy 7% per annum on term loan taken for PPCs and PCCs for a period of 5 years from commencement of operations, up to Rs. 1 Crore (USD 150K) 46
47 Incentives Under A.P. Food Processing Policy Power Subsidy Power tariff subsidy will be at Rs 1.5 per unit (USD 0.02 per unit) Electricity duty exemption for self use from captive power plants FPI will continue to be seasonal industry under the regulation of APERC Tax Concession Net VAT/CST/SGST reimbursement: 100% for micro and small enterprises for 5 years 75% for medium enterprises for 7 years 50% for large enterprises 47
48 Incentives Under A.P. Food Processing Policy APMC Cess/fees 100% exemption of APMC cess/ fees for a maximum period of 10 years in procurement of agriculture / horticulture produce directly from farmers. This will be applicable to both new and existing Food Processing Units. Marketing Assistance Reimbursement of 50% of cost of participation (maximum of 10 MSME units per year) for participating in international trade fairs, with a ceiling of Rs 5 Lakh per unit per annum (USD 7,700 per unit per annum) Reimbursement of 75% of space rent with a ceiling of Rs 2 Lakh per year (USD 3,000 per year) (maximum of 10 MSME units) for setting up stalls to extend their business interests in exhibitions and conferences. 48
49 Incentives Under A.P. Food Processing Policy Skill Development Initiatives GoAP will encourage setting up of training centers in commodity based clusters GoAP will reimburse 50% of cost involved in skilling local manpower limited to Rs 5000 per person Transportation and Export Incentives Reimbursement of 30% of road transport charges till inland container depot (ICD)/port for export of perishable goods with a ceiling of Rs 5 Lakh (USD 7,700) per annum per unit for a period of 3 years from date of commercial production 49
50 Incentives as per policy Quality Certification / Patent Registration Reimbursement of 50% of cost of certifications up to Rs 5 Lakh (USD 7,700) per unit Reimbursement expenditure incurred in obtaining patents for food processing units / cold chain projects to the extent of Rs 10 lakh (USD 15,000) per patent 50
51 Single Desk Policy The Single Desk Policy aims to create a conducive ecosystem to provide all clearances required to setup industry within 21 working days The Single Desk Bureau (Bureau) will be chaired by the Commissioner of Industries and shall comprise of Head of Departments (HoDs) This Bureau shall be supported by a robust IT application for tracking and monitoring of all industrial clearances. The members of the Bureau shall ensure that department-specific clearances are provided within stipulated timelines. The Commissioner of Industries will be authorized to issue specific clearances should the concerned department not provide clearance after following due process within stipulated time. Return 51
52 Single Desk Policy (SDP) Salient Features For starting an industry, a subset of 24 different clearances may be required. 13 approvals / clearances are necessary in the Pre-establishment stage 11 approvals / clearances are necessary in the Pre-operation stage Measures to simplify process and procedures under SDP Spot Approvals Deemed Approvals based on self certification Assignment of Inspection to Private Technical Experts Parallel Processing of Clearances Streamlined Process Grievance appeal system 52
53 Existing and Upcoming Focus Mega Food Parks Krishna Mega Food park at Agiripalli Multi product Food Park Construction to start : Project cost INR 350 Cr. (USD 53 Million) Spices Park at Guntur Spices Processing & export Godavari Aqua Mega Food Park at Bhimavaram Aqua produce processing Food Park. Under construction: Project cost INR 300 Cr. (USD 46 Million) Ultra Mega Food Park at Kurnool Project cost INR 380 Cr (USD 58 Million) Srini Food Park at Chittoor Multi product Food Park Commercial production started Mango, Tomato, papaya, Basil, Pomegranate, coconut, noodles are processed :Project cost INR 150 Cr. (USD 23 Million) 53
54 Future Potential for Food Parks in AP Vegetables, Mango, Guava, Eggs Spices, Maize Cashew, Mango Pineapple Pomegranate, Papaya, Banana & Sweet Orange Coconut, Maize, Banana Aqua, Lime, Lemon, Orange Banana, Papaya, Onion Mango, Tomato, Papaya, Milk, Eggs 54
55 New Initiatives
56 New Initiatives Smart Agribusiness Platforms Smart Agribusiness Platforms Network of Andhra Pradesh (SAPNAP) 13 District level Incubators to be established and 7 Value chain Pilots to be implemented in Phase-I Farm-to-Fork value chains to be mapped and developed for existing and potential crops/ commodities / products. Incubators to have Office / Lab spaces, trial fields, common facilities, pilot equipment and start up ecosystem to help new enterprises take off. Value Chains Mango (Fresh & Processed) Coconut Chili Tomato Tuna Shrimp Thematic Incubators Food Business Incubator Seed Technology Incubator Agri-Biotech Incubator Crop Specific Incubators Dairy & Fodder Incubator Aquaculture Incubator Thematic Incubators Platforms Skill Development & Acceleration Programs Thematic Platforms GAP Centers Food Systems Coalitions ICT based Smart extension Crop /Commodity Cluster (Farmers, Crops, Progressive Farmers) 56
57 New Initiative - Farmer Producer Organisations A Pathway to Link Farmers to Value Chains - A larger strategy to increase the income of small and marginal farmers. 1. Government of Andhra Pradesh is set launch 1000 FPOs covering One Million Farmers to empower farmers with technical, marketing and institutional management know how to collectively leverage production & marketing strength. 2. The FPOs aim at reducing the complexity for the farmer and to ensure continuous and efficient supply to the value chain. Crop/Commodit y/product Specific FPOS Input Supply (Seed, Fertilizer, machinery) FPOs Financial & Technical (Credit, Savings, Insurance, Extensions) Value Chains Production Clusters Industry Partnerships Marketing Linkages (Contract farming etc.) Training & Networking (HRD, Policy advocacy, etc.) 57
58 Incentives for Horticulture Sector Keeping in mind, the vast potential in horticulture sector for both fresh and processed fruits & vegetables, GoAP is giving special emphasis and the following schemes and incentives are in operation Mission for Integrated Development of Horticulture (MIDH) Government of AP enabling implementation of the programs in cluster approach for holistic development of Horticulture Value Chains Rashtriya Krishi Vikas Yojana (RKVY) Prime Minister Krishi Sinchayee Yojana (PMKSY) National Mission on Oil Seeds and Oil Palm (NMOOP) Quality Seed / planting material Pre & Post-harvest handling Primary Processing On Farm Value Addition Quality Certifications Marketing (FPOs) Special State Plan for Development Initiatives in Horticulture 58
59 Incentives for Horticulture Sector Greenhouse Cultivation Special programs for quality and productivity enhancement are under implementation for vegetables and flowers under protected cultivation (Greenhouse Cultivation). High Density Production High density/ultra high density/meadow orcharding technologies are being promoted for higher productivity, quality and to minimize pre and post harvest losses. Certification Programs IPM/INM/ICM/Gap Certification Programs are under implementation to meet the quality parameters and standards of the importing countries. 59
60 Incentives for Fisheries Sector Incentives on Purchase of Land, lease of Land/Shed/Buildings o Aquaculture processing units will be incentivized by providing 100% stamp duty exemption in land registration/lease of land/, mortgage deed/bank documentation/ Hypothecation etc. Capital Subsidy / Financial Assistance o For shrimp processing units including cold chain maintenance, subsidy of 50% inclusive of land cost with upper ceiling limit of Rs.5 crores. o For fish processing / filleting units including cold chain, land cost etc., subsidy of 50% with upper ceiling limit of Rs. 7 crores (USD 1 Million) o For purchase of Reefer vans, a subsidy of 50% with maximum of Rs Lakhs (USD 15,000) per vehicle will be provided from onwards o Financial assistance will be extended for farm mechanization like pumps and aerators with 50% subsidy. Solar pumps, solar lights and solar based aerators will be given on 60% subsidy to the prawn and shrimp farms up to maximum of 2 ha per farmer per annum. Interest Subsidy o Interest subvention of 6% will be provided on bank loan subject to maximum of Rs.2.5 Crores (USD 390K) for 5 year period to aqua processing units, ice plants and cold storages. o Interest subvention of 6% per annum up to a maximum of Rs.2.00 Crores (USD 310K) will be provided to the Fish Feed Manufacturing units only for Five Years. 60
61 Incentives for Fisheries Sector Power and Water Subsidy o o Power subsidy to fish/prawn/shrimp processing unit and ice plants from the date of commencement of commercial production and will be on par with industrial policy from Power will be supplied to Shrimp and Prawn culture farms at Rs.3.75 ps/ unit for a maximum of 2 hectares per aqua-farmers/ shrimp farmers from the year Other Incentives o o o o Cold storage at ports/ Fishing harbours with subsidy will be permitted on par with industrial policy. Financial assistance of 50 % for establishing Water and soil analysis labs with a unit cost of maximum of Rs lakhs (USD 15,000). Financial assistance of 40 % for establishing Quality control / Antibiotic residue testing labs with a unit cost of maximum of Rs. 2 crore (USD 310K). Incentives to be provided to feed manufacturing units, aerator manufacturing, fish processing equipment on par with industrial policy. 61
62 Government of India 2016 Budget Snapshot
63 Govt of India 2016 Budget Highlights Allocation for Agriculture and Farmers welfare is 35,984 crore (USD 5.5 Billion) Pradhan Mantri Krishi Sinchai Yojana to be implemented in mission mode Million hectares will be brought under irrigation. Implementation of 89 irrigation projects under AIBP. A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about INR 20,000 Crore (USD 3.1 Billion) Programme for sustainable management of ground water resources, costing INR 6,000 Crore (USD 923 Million) will be implemented 500,000 farm ponds and dug wells in rain fed areas and 1,000,000 compost pits for production of organic manure will be taken up under MGNREGA Soil Health Card scheme will cover all 140 Million farm holdings by March
64 Govt of India 2016 Budget Highlights 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities during the next three years Promote organic farming through Parmparagat Krishi Vikas Yojana and 'Organic Value Chain Development in North East Region'. Unified Agricultural Marketing eplatform to provide a common e-market platform for wholesale markets Allocation under Pradhan Mantri Gram Sadak Yojana increased to INR 19,000 Crore (USD 2.9 Billion). Will connect remaining 65,000 eligible habitations by To reduce the burden of loan repayment on farmers, a provision of INR 15,000 Crore (USD 2.3 Billion) has been made in the BE towards interest subvention. Allocation under Prime Minister Fasal Bima Yojana INR 5,500 Crore (USD 846 Million). INR 850 crore (USD 130 Million) for four dairying projects - Pashudhan Sanjivani, Nakul Swasthya Patra, E-Pashudhan Haat and National Genomic Centre for indigenous breeds 64
65 Government of India Policy & Incentives for Food Processing Sector
66 Govt of India Policy on Foreign Direct Investment (FDI) Foreign Direct Investment (FDI) is permissible for all the processed food products up to 100% on automatic route except for items reserved for Micro and Small Enterprises (MSEs). FDI in MSEs (MSMED, Act 2006) will be subject to the sectoral caps, entry routes and other relevant sectoral caps, entry routes and other relevant sectoral regulations. The export obligation would be applicable from the date of commencement of commercial production and in accordance with the provisions of section 11 of the Industries (Development & Regulation) Act, Government of India has declared Agriculture and Food Processing a Priority Sector and encouraging Private Participants and PPPs. 66
67 GOI Incentives for Food Processing Central Excise duty Sectors Products Incentive Dairy & Horticulture Dairy & Horticulture Milk, Milk Products, Vegetables, Nuts and Fruits (Fresh & Dried) Processed Fruits and Vegetables, Soya Milk Drinks, Flavored Milk of animal origin Nil Duty Merit rate of 2% without CENVAT or 6% with CENVAT Cold Storage A&H Fisheries All refrigeration machineries and Parts used for installation of cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry Pasturing, drying, evaporating, etc. machinery used in Dairy sector Machinery for the preparation of meat, poultry, fruits, nuts or vegetables and on presses, crushers and similar machinery used in the manufacture of wine, cider, fruit juices or similar beverages and packing machinery Nil Duty Reduction from 10% to 6% Incentives from GOI are in addition to GoAP incentives 67
68 GOI Incentives for Food Processing Service Tax Sectors Products Incentive Horticulture Construction, Erection, Commissioning or installation of original works pertaining to postharvest storage infrastructure for agricultural produce including Cold storages for such purposes Mechanized Food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages Services of Loading, unloading, packing, storage or warehousing of agricultural produce Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables Services by way of transportation by rail or a vessel and by a goods transport agency used for transportation of agricultural produce and food stuff including flours, rice, pulses, tea, coffee, jaggery, sugar, milk, milk products, salt and edible oil, excluding alcoholic beverages Nil Tax Incentives from GOI are in addition to GoAP incentives 68
69 GOI Incentives for Food Processing Income Tax Sectors Products Incentive Horticulture (Cold Chain Infrastructure) Setting up and operating a cold chain facility Setting up and operating warehousing facility for storage of agricultural produce Bee-keeping and production of honey and beeswax Setting up and operating a warehousing facility for storage of sugar 100% deduction in Expenditure (This deduction is allowed only for the investment made in the previous year and prior to commencement of its operations.) New units engaged in processing, preservations and packaging of fruits or vegetables, meat & meat product, poultry, marine or dairy products 100% tax exemption for the first 5 years of operation, and after that, t the rate of 25% of the profits being exempted from tax; 30% in case of a company Incentives from GOI are in addition to GoAP incentives 69
70 Nodal Contact Points M.Girija Shankar, IAS Secretary to Industries & Commerce, Food Processing, Mines & Geology Y.S.Prasad Chief Executive Officer Andhra Pradesh Food Processing Society Abdul Rahman Ilyas Advisor Agribusiness Industries & Commerce (FP) Y.Vidya Sankar OSD Food Processing Industries & Commerce (APIIC) AP Food Processing Society (APFPS) 2nd Floor, AP Khadi and Village Industries Board Building, Humayun Nagar, Masab Tank Road, Hyderabad , India Telephone: Fax:
71 Thank you
72 Annexure I: Pre-establishment Stage Approvals/ Clearances
73 Annexure I: Pre-establishment Stage Approvals/ Clearances
74 Annexure II: Pre-operation Stage Approvals/ Clearances
75 Annexure II: Pre-operation Stage Approvals/ Clearances
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