Need to simplify tax structure on processed food, says PM

New Delhi, Oct 6 (PTI) Prime Minister Manmohan Singh
Tuesday acknowledged the need to rationalise and simplify tax
structure for processed food sector, which grew at 14.7 per
cent in the last fiscal despite economic slowdown.

"I recognise that we need to look at taxation structure
in the industry. Though primary agricultural commodities are
mostly exempted from taxes, processed foods are subjected to
multiple levies. There is an urgent need to rationalise and
simplify the tax structure," he said.

Singh, while addressing a conference of state food
processing ministers here, noted that "despite the economic
slowdown, the food processing industry in India grew at an
impressive rate of 14.7 per cent in 2008-09".

Pointing out that the level of processing is very low in
the country, the Prime Minister said: "India's share in world
food trade is less than two per cent. The level of processing
in India is abysmally low at around 6 per cent compared to
60-80 per cent in developed countries".

"There is clearly very high wastage and very low value
addition in our country, with corresponding loss of business
opportunity and farm income," he added.

Singh said the food processing sector has the potential
to be an industry driver that can transform the rural economy.

"I recognise that there are a number of constraints both
in forward and backward linkages in the sector. But, if we can
get out act together India can emerge as a leader in the
global food processing industry," he said. PTI