UP to offer sops for food processing

In a bid to promote the food-processing industry, the Uttar Pradesh government has announced a series of incentives and concessions for potential investors.

A food-processing unit (both perishable and non-perishable) investing Rs 50 crore will be entitled to the same set of incentives as those applicable to all other categories of investors investing Rs 100 crore, according to the package announced by the government last June.

The package was devised by the government to arrest the flight of capital to Uttaranchal as the hill state is a virtual tax haven after having been accorded the status of special state by the Centre.

The package announced by UP included capital subsidy and interest-free loan to the new units equal to the trade tax and central tax paid by them.

In the food-processing sector, the units investing Rs 10 crore to Rs 50 crore excluding flour mill, rice mills and pulses unit, will be given an interest-free loan equivalent to the trade tax and CST contributed by these units to the state exchequer.

This facility will also be given to the units investing Rs 1 crore and using perishable material as raw material.

Milk processing units also engaged in milk collection directly from the farmers will be given 15 per cent capital subsidy.

The incentives and the concessions will not be available for the investors choosing NOIDA or greater NOIDA as their destination.

According to the government announcements, the units willing to avail the benefits of the package would have to commence production within 36 from the date of the issue or orders for the enforcement of the package.

In a major incentive for the poultry industry, is being brought under the ambit of agriculture, thus bringing tax relief for the poultry unit owners. However, only the eggs and broiler breeding will be under the ambit of the agriculture.

For one window service to the entrepreneurs, the government also announced to set up a `Food Processing Directorate", for dealing with all the issues concerning the industry.

The announcements to this effect were made by the chief minister Mulayam Singh Yadav on the concluding day of the two day seminar ``Strengthening the food processing industry and marketing facilities in UP''. , However in a major shift, the chief minister citing the problem of `regional imbalance ' said the incentives will not be available if the units are set up in NOIDA and Greater NOIDA.

He said NOIDA was saturated and investment here only benefits Delhi while rest of the UP like Bundelkhand and eastern UP district were lagging behind in all spheres of development.

The two day seminar had made a total of 59 recommendations with special focus on the meat industry and reducing the trade tax on the processed food items to 4% from the present 12%.