The functions of the Ministry can be broadly classified under policy support and development activities:

Policy Support

a)   Formulation and implementation of policies for food processing sector with overall national priorities and objectives.

b)  Facilitating creation of a conducive environment for healthy growth of the food-processing sector.

c)  Promoting rationalization of tariffs and duties relating to food processing sector.

POLICY INITIATIVES

Several policy initiatives have been taken from time to time promote growth of the processed food sector in the country. Some of these are:

a)  Most of the processed food items have been exempted from the purview of licensing under the Industries (Development & Regulation) Act, 1951, except items reserved for small-scale sector and alcohol beverages.

b) Food processing Industries were included in the list of priority sector for bank lending in 1999.

c) Automatic approval for foreign equity upto 100% is available for most of the processed food items excepting alcohol and beer and those reserved for small sector subject to certain conditions.

d) Excise duty on processed fruits and vegetables has been brought down from 16% to zero level in the Budget 2001-02.

e) In the budget of 2004-05 Income Tax holiday and other concessions were announced for certain categories of food processing industries.

f) In the Budget 2006-07 Excise Duty has been waived on condensed milk, ice cream, preparations of meat, fish and poultry, pectins, pasta and yeast. Excise Duty on ready to eat packaged foods and instant food mixes, like dosa and idly mixes have been reduced from 16% to 8%. Excise Duty on aerated drinks has been reduced from 24% to 16%. Fruits and vegetable processing units are already exempted from payment of Excise Duty.

g) To ensure easy availability of credit, Government has included food processing industries in the list of priority sector for bank lending. NABARD has created a refinancing window with a corpus of Rupees one thousand crore for agro processing infrastructure and market development.

h) In Budget 2007-08 Excise Duty has been waived on all kinds of food mixes including instant mixes, soya bari (food supplement) and ready to eat packaged foods and on biscuits.

i) Excise Duty on reefer vans (refrigerated motor vehicles) has been reduced from 16% to 8%.

j) Exemption limit of Excise Duty for small scale industry has been raised from Rs 1.00 crore to 1.50 crores.

k) Customs Duty on refrigerated motor vehicles has been waived while Customs Duty on food processing machinery reduced from 7.5% to 5%. Customs Duty on sunflower oil (crude) reduced from 65% to 50% and on sunflower oil (refined) reduced from 75% to 60%.

l) Special additional duty of 4% has been waived in the case of refined edible oil.

m) All services provided by Technology Business Incubators and their Incubatees whose annual business turnovers do not exceed Rs. 50 lakhs have been exempted from Service Tax for the first three years.

(n)  Budget Announcement of 2010-11:

(i) A strong supply chain for perishable from produce to reach consumption and processing centres promptly.
(ii) Infrastructure and technology to convert such produce into value-added products; and
(iii) Infusion of technology to augment agricultural production.
 Similar attention needs to be paid to related sectors such as apiary, horticulture, dairy, poultry, meat, marine and aquaculture.
 For achieving these objectives, it is proposed to provide:

• Project import status with a concessional import duty of 5 percent for the setting up of mechanized handling systems and pallet  racking systems in `mandis` or warehouses for food grains and sugar as well as  full exemption from service tax for the installation  and commissioning of such equipment.

• Project import status at a concessional customs duty of 5 percent with full exemption from service tax to the initial setting up and  expansion of Cold storage, cold room including farm pre-coolers for preservation or storage of agricultural and related sectors  produce ; and Processing units for such produce.

• Full exemption from customs duty to refrigeration units required for the manufacture of refrigerated vans or trucks.

• Concessional customs duty of 5 percent to specified agricultural machinery not manufactured in India;

• Central excise exemption to specified equipment for preservation, storage and processing of agriculture and related sectors and  exemption from service tax to the storage and warehousing of their produce; and

• Full exemption from excise duty to trailers and semi-trailers used in agriculture.

Development Initiatives 

a) Providing assistance under various Plan Schemes to food processing industries.

b) Widening the R & D base in food processing by involvement of various R & D institutes and support to various R & D activities.

c) Human Resource Development to meet the growing requirement of managers, entrepreneurs and skilled workers in the food  processing industry.

d) Assistance for setting up analytical and testing laboratories, active participation in the laying down of food standards and their  harmonization with international standards.

e) Ministry is setting up a national level institute called National Institute of Food Technology Entrepreneurship and Management (NIFTEM)  at Kundli in Haryana. The Institute will be of international standards. The Institute will start functioning from academic year beginning  from 2010.

f) Sevottam, charter mark in service delivery for excellence is being introduced in the Ministry.

g) An integrated Food Law i.e. Food Safety and Standards Act, 2006 has been notified on 24.08.2006. The Act will enable in removing  multiplicity of food laws and regulatory agencies and will provide single window to food processing sector. Ministry of Health & Family  Welfare has been designated as the nodal Ministry for administration and implementation of the Act.

h) Decentralisation of processing and disbursement of grant under scheme for technology upgradation/ expansion/modernization of  food processing industries through bank/ financial institutions.

i) Creation of World Class Infrastructure for growth of food processing sector through mega Food Parks, integrated cold chain &  modernization of abattoire schemes.
 

Promotional Initiatives

In order to create awareness about the potential and prospect of Food Processing Industries in the country, this Ministry provides assistance for:-

a) Organizing Workshops, Seminars, Exhibitions and Fairs.

b) Studies/ Surveys etc.