Odisha seafood exporters seek higher capital subsidy for processing units

Seek capital subsidy based on actual capex subject to a maximum of Rs 5-7 crore for putting up a processing plant

Don't want to miss the best from Business Standard?

In order to compete with their counterparts in neighbouring Andhra Pradesh, Odisha seafood exporters have sought hike in capital subsidy to set up processing plants with higher capacity in the existing Odisha Fisheries Policy.

They argued that entrepreneurs should get capital subsidy on the basis of actual capital expenditure subject to a maximum of Rs five crore or Rs seven crore for putting up a seafood processing plant. The Odisha government has set an ambitious target to export Rs 10,000 crore marine products by 2020.

"As per the present Odisha Fisheries Policy, the capital subsidy is very negligible. This is discouraging entrepreneurs from setting up new projects and is putting them in a disadvantageous position compared to other states like Andhra Pradesh," said a memorandum submitted by Utkal Chamber of Commerce and Industry, state's apex chamber for industries, to the government.

In Andhra Pradesh's Fisheries Policy , an entrepreneur is eligible for capital subsidy upto Rs seven crore for putting up a seafood processing plant. The investment in modern seafood processing plant is pegged at Rs 40 crore.

Seafood exporters in Odisha are a worried lot as their Andhra Pradesh counterparts are lifting the raw material from the state to feed their processing units paying higher rates. The buyers from Andhra Pradesh are lifting the materials from the farmers paying in cash.

The provisional value of exports for 2015-16 is pegged at Rs 1,880.50 crore compared to Rs 2,070 crore achieved in 2014-15, a decline of about nine per cent. Quantity wise, the exports, however, have registered a growth. The state exported 37,867.5 tonnes of marine food products in 2015-16 against 34,800 tonne clocked in 2014-15.

"The exporters in Odisha are in dire straits as people from the neigbouring state are sourcing their raw material requirements from here. The percentage of lifting raw materials has gone up to as high as 30 per cent and the processing units in the state are mostly operating at 50 per cent capacity. We have approached the Odisha government for an increased capital subsidy", said Ajay Dash, president, the Seafood Exporters' Association of India (SEAI)-Odisha region.