The Hindu Business Line : CII for integrated food law

ENACTMENT of an integrated food law to reduce regulatory burden in the agricultural sector, freeing agricultural interest rates from artificial ceilings and reduction of excise duty on pesticides and cocoa-based confectionary are some of the steps that the Confederation of Indian Industry (CII) has called for in its pre-Budget memorandum for the agricultural sector.

Along with agriculture, water management is going to be another major challenge, feels CII. While investing in water already attracts infrastructure status, operations and maintenance (O&M) are equally important. In this context, CII recommends, "those planning to have O&M contracts for water management should also get Section 80 (IA) and 80 (IB) benefits".

CII has said that new food legislation is required in order to reduce the regulatory burden on the agricultural sector, which is currently quite onerous.

The chamber also says that agricultural interest rates should be market determined. "Price ceilings typically have the effect of curtailing the availability of the product. Once interest rates are freed, there will be better pricing of risk, more incentive to lend to farmers and a better flow of credit to farmers, " said the CII.

The industry body has said that excise duty on pesticides used in agriculture be reduced from 16 per cent to 8 per cent. For food processing and agro-based products and beverages, the CII has recommended that excise duty on low value products used by children such as the cocoa-based confectionery, chewing and bubble gums, should be reduced from 16 per cent to 8 per cent in line with the reduction on sugar confectionery.

Additionally, the CII has said that excise duty difference between `branded' and `unbranded' food products existing at present should be removed. In particular, it urged the Government not to charge any excise duties on any branded and packed processed products made from perishable goods such as poultry, meat, milk, fruits and vegetables.

Larger amounts of private investments should be mobilised for water management, storage, transportation, information technology, post-harvest mechanisation, etc., to supplement the Government investment.

To encourage this, such investments should qualify for exemption from tax of profits similar to the investments in infrastructure under Section 80(IA), according to the CII.

More Stories on : Budget | Foods & Food Processing | Agriculture | Industry Associations

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