Food Processing Enterprises in Odisha get a Boost

Bhubaneswar, 2nd November 2013: There is vast untapped potential for food processing industry in the state. In Odisha, about 0.7% of the total produce is processed currently. The National Food Processing Policy strives to achieve 25% from the current national average of 6% by 2025. In line with the national benchmark, the Odisha Food Processing Policy, 2013 aims to achieve 10% of food processing by 2017 and 25% by 2025 in the state.

Food-ProcessingThis policy aims to develop food processing as a vibrant industry creating employment opportunities for the people engaged in primary production activities and increasing the farm returns by value addition in the farm produce.

The agricultural produce including horticulture, diary, fishery and animal husbandry are perishable in nature. An estimated 35 to 40% of the fruits, vegetables in our state goes waste due to lack of storage, cold chain and transport infrastructure. Development of food processing enterprises and adequate post harvest infrastructure especially storage and transportation facilities is necessary to limit the wastage and increase value to farm produce.

Odisha Food Processing Policy 2013 provides many fiscal incentives for attracting investment to the sector, for encouraging investments in the supply chain infrastructure to reduce wastage and for setting up focused industrial clusters and food processing parks in potential food clusters.

There are wide provisions for rebate on land. Maximum 5 acres of land can be made available at concessional rate when the project costs from 1 crore to 50 crores. In case of projects costing from 50 crores to 100 crores, maximum 10 acres of  land can be made available at concessional rate. Maximum 30 acres of land can be made available at concessional rate when the project costs more than 100 crores.

The amount of land to be given to the unit is at the discretion of the nodal agency after assessing the requirement of land in a realistic manner which will not exceed this limit. Identified potential food clusters or enterprises set up in KBK region will be given concession in the form of reimbursement of additional 25% of land rate of the extant Industrial Policy Resolution, 2007 announced by Government of Odisha (and IDCO), subject to the commencement of production in the enterprise.

Enterprises will be given capital investment subsidy of 25% of the project cost (excluding the cost of land) subject to a limit of Rs. 2 crore. In case of enterprises promoted by women entrepreneurs, or entrepreneurs belonging to Schedule Caste/ Schedule Tribe and enterprises promoted in KBK region, the subsidy shall be 33% of the project cost subject to a limit of Rs. 3 crore.

5% per annum back ended interest subsidy will be provided on working capital loan for first 5 years, from commencement of operations for MSME. The interest subsidy will be subject to a limit of Rs 5 lakh per year for 5 years. The interest subsidy will be available on the funds borrowed from public sector banks/OSFC. The interest subsidy shall be released so long as the eligible enterprise continues timely repayment of the loan and remains in production.  The interest subsidy will not be available on term loan.

New enterprises should be exempted from Electricity Duty for a period of 10 years from the date of commercial production. Expansion or diversification of existing enterprise will be entitled for exemption from the payment of electricity duty for a period of 10 years from the date of commencement of OFP policy.

Agro processing and food processing enterprises shall be encouraged to adopt latest quality certification standards like Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP), ISO 9000, Agmark, FPO, Good Laboratory Practices (GLP), Total Quality Management (TQM). Reimbursement up to 50% of the cost of such certification subject to ceiling of Rs. 2 lakh will be given. Marketing support will be allowed to the Food Processing entrepreneurs.

There will be exemption on Entry Tax on plant and machinery and balancing equipment procured by MSMEs. Exemption on Entry Tax on raw material, incidental goods & packaging material procured by MSMEs will be provided for a period of 5 years from the date of starting commercial production.

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