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Priority in lending to food sector — Rs 1,000-cr corpus for refinancing loans

Our Bureau

New Delhi , Feb. 28

In an attempt to provide an impetus to the food processing industry, the Finance Minister, Mr P. Chidambaram, today announced that food processing would be treated as a priority sector for bank credit.

Mr Chidambaram said the National Agriculture and Rural Development Bank (Nabard) would create a separate window with a corpus of Rs 1,000 crore for "refinancing loans to the sector, especially for agro-processing infrastructure and market development".

Additionally, the Government would also set up a National Institute of Food Technology Entrepreneurship and Management and develop the Paddy Processing Research Centre at Thanjavur (in Tamil Nadu) into a "national-level institute".

exemption

With a view to giving a fillip to the food processing industry, the Government has proposed to fully exempt condensed milk, ice cream, preparations of meat, fish and poultry, pectin, pasta and yeast from excise duty.

Earlier, condensed milk, ice cream and ready-to-eat packaged foods were subject to a 16 per cent excise duty.

Processed meat, fish and poultry products were subject to 8 per cent excise duty.

With the Government's initiative to exempt both condensed milk and ice cream from excise duty, the dairy industry is now completely relieved of any such charges.

Duty cut

The excise duty on ready-to-eat packaged food and instant food mixes such as dosa and idli mix would be reduced to eight per cent from 16 per cent.

Besides, the concessional rate of 8 per cent excise duty applicable on scented supari, with retail sale price of 50 paise or less per pouch, has been extended to scented supari with retail price of Re 1 or less per pouch.

In addition, the Finance Minister has also proposed a reduction in customs duty on packaging machinery from 15 per cent to five per cent.

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