In an effort to boost up the food processing sector, Finance Minister, Arun Jaitley, has announced setting up of a special fund to provide credit at affordable rates. At the same time, he also gave relief to wind energy companies.

Replying to debate on General Budget (better known as part A of the budget speech) in Lok Sabha today, Jaitley said that a fund with a corpus of Rs 2,000 crore will be set up to provide affordable credit to the food processing centres.

He also cleared the air on provision related to wind energy by saying that accelerated depreciation will continue for the sector.

Finance Bill

He also clarified that he has received a lot of suggestions on various tax proposals. He will respond to them when he will reply on the Finance Bill next week. There are demands from various section s that tax proposals related to debt mutual funds need to be relooked, besides clarity on General Anti Avoidance Rules (GAAR).

Expressing concern on rising drug addiction cases especially in States located on the border with Pakistan, the Finance Minister announced setting up of a rehablitation centre in Punjab with an initial corpus of Rs 50 crore.

FDI in defence, insurance

Earlier, defending his proposal of raising the foreign direct investment limit in defence sector, he said that currently the nation imports almost 70 per cent of defence requirement which entail huge foreign exchange outgo. Now, if companies can be set up here with 49 per cent FDI, then it will resolve a number of issues.

He emphasised that allowing 51 per cent would have meant shifting the plant from other countries to India which means no benefit. At the same time, foreign investors would not be interested at 26 per cent, so “49 per cent is the best option''.

On FDI in insurance, he said that this sector is fund starved. More important, resources are needed especially in health sector. Keeping all these in mind, 49 per cent FDI has been proposed with full Indian control, he said.

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