Responding to various demands of 40 CEOs from the industry, Prime Minister Manmohan Singh on Tuesday said he would ask the finance ministry to look into the issue.
Singh also assured the CEOs that states would be encouraged to amend the Agriculture Produce Marketing Committee Act as soon as possible.
The delegation presented Singh with a wish-list of sorts designed to unleash investments worth Rs 1,50,000 crore (Rs 1500 billion) over the next 10 years and create 9-10 million employment opportunities.
The delegation, under the aegis of the Confederation of Indian Industry and headed by president Yogi Deveshwar, made a detailed presentation on how government could help realise the potential of the food processing industry. Some of the key recommendations pertained to rationalisation of taxes, both at the Central and state levels.
The industry has also sought the government's support in building 20 world-class hubs for food processing industry that would improve India's share in the global market. India accounts for only 1.3 per cent now of the global processed food market now.
The idea of setting up an autonomous Food Safety and Quality Authority has also been mooted. An integrated law covering the industry, Food Safety and Standards Bill 2005 is expected to be taken during the winter session of Parliament.
"Processed food should not be seen as a luxury consumption. There is a need for moderation of taxes to around zero to four per cent including the VAT," Deveshwar said at a subsequent meeting of the delegation with the media, along with Food Processing Minister Subodh Kant Sahai.
He said the food processing industry attracted taxes that aggregated to as much as 25 per cent. The presentation made to the prime minister pointed out that the industry in India was one of the highest taxed in the world. In developed countries like the UK, Ireland, the US, and in Malaysia, there was no tax, while it was 7 per cent in Thailand and 13 per cent in China.
Deveshwar said the food processing industry would grow only if it addressed the needs of the common man. It would also benefit the country and its farmers by cutting down the post-harvest waste, which was about 40 per cent of the total production.
"Reduction in wastage will reduce the cost of food that is delivered. Improving the quality of demand would also help farmers produce more," he said.