The Hindu Business Line : Rural and dairy industries welcome proposals

THE rural-based industries have welcomed the excise duty exemption granted to dairy machinery and the tax concessions for fruits and vegetable processing industries. However, these are small sops that do not address the key problems faced by the industry, they feel.

Mr R.G. Chandramogan, Chairman and Managing Director, Hatsun Agro Product Ltd, welcomed the Finance Minister's proposals for improving agriculture and the rural economy.

The excise duty exemption for dairy equipment and the insurance scheme for livestock are a welcome step. But excise duty exemption in itself does not constitute a major relief to the industry, which is working capital intensive.

Similarly, the five-year income tax exemption on profits for new horticulture processing units is a beneficial but minor step to encourage the industries.

The fruit and vegetable processing units are capital intensive, long gestation projects and dependent on imported equipment. These units would have preferred import duty, excise exemption and other measures that bring down capital cost, which would have a significant impact on viability.

Similarly, refrigeration equipment continues to attract high tax rates. A cold chain is a basic necessity for the fruit and vegetable processing industries. But there have not been any concessions on this front, he said.

The measures to restore and renovate water bodies in rural areas, and the aim to upgrade the rural economy are welcome. Villages have been brought to centre stage in the process of liberalisation, Mr Chandramogan said.

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