8-year tax holiday sought for food processing

Food Processing Minister Subodh Kant Sahai on Thursday met Finance Minister Pranab Mukherjee in the run-up to the Budget to seek a minimum of eight-year tax holiday for the sector to attract investment.

"I have told him (Mukherjee) that keeping in view the growth in the sector and the number of people dependent on it for livelihood, a tax holiday of 8-10 years should be offered. . . to attract investment, including the FDI," Sahai said after meeting the finance minister.

Sahai said since most of the commodities are easily perishable, the sector needs fiscal incentive to boost growth. The ministry has set a investment target of Rs 1 lakh crore (Rs 1 trillion) over the next five years to prop up the sector.

He said the processing industry assumes an important role as growth of rural areas depends on agriculture, which still employs over 60 per cent of the population.

The minister said he has sought to remove anomalies in tax on different value-added products, some of which attract VAT as high as 4 per cent.

Asked if he got any assurance from the finance minister, Sahai said, "He (Mukherjee) said this is an important sector and he will look into the issues."