Schemes Under A.P. Food Processing Policy 2015 - 20...46 Incentives Under A.P. Food Processing Policy 2015 –20 Interest Subsidy 7% per annum on term loan taken for fixed capital

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Schemes Under A.P. Food Processing Policy 2015 - 20

Modernization of

Abattoirs

Reefer Vehicles /

Mobile -

Pre Cooling Vans

Setting up of

Testing Labs

Eligible Maximum Grant Rs 15 Crs. (USD 2.4 Million)

Maximum eligible grant is 50 % of Plant & Machinery

and Technical Civil Work

Eligible Maximum Grant Rs 10 lakhs (USD 15,400) per vehicle.

Eligibility 50 % of cost of the reefer vehicle

Rs 5 Crs. (USD 770K) for NABL approved labs

Rs 5 lakhs (USD 7,700) for existing Food Processing units

Eligibility 50 percent of the project cost

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Schemes Under A.P. Food Processing Policy 2015 - 20

Units for Processing of Waste Produced in FP Units

Eligible Maximum Grant Rs 2 Crs. (USD 300K)

Maximum eligible grant is 50 % of Plant & Machinery

and Technical Civil Work

• The Objective of the scheme is to ensure proper utilization of the waster

generated by the food processing unit in the clusters, primarily organic

residue of the processed raw material.

Incentives Under A.P. Food Processing Policy 2015 – 20

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Land Conversion

Charges & Stamp

Duty Exemptions

Food Processing will be declared as Public Utility

under Industrial Disputes Act 1947

GoAP shall facilitate land clearance under Single Desk Policy

GoAP will reimburse the Non-Agriculture Land Assessment (NALA)

tax as applicable for conversion of land

for setting up Food Processing units

100% reimbursement of stamp duty and

transfer duty on purchase or lease of land/shed/buildings.

Ease of Doing

Business

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Interest Subsidy

7% per annum on term loan taken for fixed capital investment, for a period of

5 years from commencement of operations, up to Rs. 2 Crore (USD 300K)

7% per annum on term loan taken for PPCs and PCCs

for a period of 5 years from commencement of

operations, up to Rs. 1 Crore (USD 150K)

25% of project cost (includes P&M, technical civil works), up to Rs 5

Crore (USD 750K) for new units

25% of new/upgraded equipment cost, limited to Rs 1 Crore (USD

150K) for technology upgradation

50% for setting up Primary Processing Centers (PPCs) and Primary

Collection Centers (PCCs) limited to Rs 2.50 Crore (USD 375K)

35% for setting up cold chain for agriculture/horticulture/dairy/meat

produce, up to a Rs 5 Crore (USD 750K)

Capital Subsidy

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Tax Concession

Power tariff subsidy will be at Rs 1.5 per unit (USD 0.02 per unit)

Electricity duty exemption for self use from captive power plants

FPI will continue to be seasonal industry

under the regulation of APERC

Net VAT/CST/SGST reimbursement:

100% for micro and small enterprises for 5 years

75% for medium enterprises for 7 years

50% for large enterprises

Power Subsidy

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100% exemption of APMC cess/ fees for a maximum period of 10

years in procurement of agriculture / horticulture produce

directly from farmers.

This will be applicable to both new and existing Food Processing Units.

APMC Cess/fees

Marketing Assistance

Reimbursement of 50% of cost of participation (maximum of 10

MSME units per year) for participating in international trade fairs, with a

ceiling of Rs 5 Lakh per unit per annum (USD 7,700 per unit per annum)

Reimbursement of 75% of space rent with a ceiling of Rs 2 Lakh per

year (USD 3,000 per year) (maximum of 10 MSME units) for setting up

stalls to extend their business interests in exhibitions and

conferences.

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Skill Development Initiatives

GoAP will encourage setting up of training centers in commodity based

clusters

GoAP will reimburse 50% of cost involved in skilling local manpower

limited to Rs 5000 per person

Transportation and Export Incentives

Reimbursement of 30% of road transport charges till inland container

depot (ICD)/port for export of perishable goods with a ceiling of Rs 5

Lakh (USD 7,700) per annum per unit for a period of 3 years from date

of commercial production

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Incentives as per policy

Quality Certification / Patent Registration

Reimbursement of 50% of cost of certifications up to Rs 5 Lakh

(USD 7,700) per unit

Reimbursement expenditure incurred in obtaining patents for food

processing units / cold chain projects to the extent of Rs 10 lakh

(USD 15,000) per patent

The Single Desk Bureau (Bureau) will be chaired by the Commissioner ofIndustries and shall comprise of Head of Departments (HoDs)

This Bureau shall be supported by a robust IT application for tracking andmonitoring of all industrial clearances.

The members of the Bureau shall ensure that department-specificclearances are provided within stipulated timelines.

The Commissioner of Industries will be authorized to issue specificclearances should the concerned department not provide clearance afterfollowing due process within stipulated time.

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Single Desk Policy 2015-20

Return

The Single Desk Policy aims to create a conducive ecosystem to provide all clearances required to setup industry within 21 working days

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Single Desk Policy (SDP) 2015-20 - Salient Features

• For starting an industry, a subset of 24 different clearances may be

required.

– 13 approvals / clearances are necessary in the Pre-establishment stage

– 11 approvals / clearances are necessary in the Pre-operation stage

• Measures to simplify process and procedures under SDP

• Grievance appeal system

Spot Approvals

Deemed Approvals

based on self certification

Assignment of Inspection to

Private Technical Experts

Parallel Processing of

Clearances

Streamlined Process

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Existing and Upcoming Focus Mega Food Parks

• Srini Food Park at Chittoor

• Multi product Food Park

• Commercial production started

• Mango, Tomato, papaya, Basil, Pomegranate, coconut, noodles

are processed :Project cost INR 150 Cr. (USD 23 Million)

• Godavari Aqua Mega Food Park at Bhimavaram

• Aqua produce processing Food Park.

• Under construction: Project cost INR 300 Cr.

(USD 46 Million)

• Krishna Mega Food park at Agiripalli

• Multi product Food Park

• Construction to start : Project cost INR 350 Cr.

(USD 53 Million)

• Spices Park at Guntur

• Spices Processing &

export

• Ultra Mega Food Park at

Kurnool

• Project cost INR 380 Cr

(USD 58 Million)

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Future Potential for Food Parks in AP

Cashew, Mango Pineapple

Coconut, Maize, Banana

Vegetables, Mango, Guava, Eggs

Spices, Maize

Aqua, Lime, Lemon, Orange

Banana, Papaya, Onion

Mango, Tomato, Papaya, Milk,

Eggs

Pomegranate, Papaya,

Banana & Sweet Orange

New Initiatives

New Initiatives – Smart Agribusiness Platforms

• Smart Agribusiness Platforms Network of Andhra Pradesh (SAPNAP)

• 13 District level Incubators to be established and 7 Value chain Pilots to beimplemented in Phase-I

• ‘Farm-to-Fork’ value chains to be mapped and developed for existing andpotential crops/ commodities / products.

• Incubators to have Office / Lab spaces, trial fields, common facilities, pilotequipment and start up ecosystem to help new enterprises take off.

Crop /Commodity

Cluster (Farmers, Crops,

Progressive Farmers)

Thematic Incubators Platforms

Skill Development

& Acceleration

Programs

Value Chains • Mango (Fresh & Processed)• Coconut• Chili• Tomato• Tuna• Shrimp

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Thematic Incubators• Food Business Incubator• Seed Technology Incubator• Agri-Biotech Incubator• Crop Specific Incubators• Dairy & Fodder Incubator• Aquaculture Incubator

Thematic Platforms• GAP Centers• Food Systems Coalitions• ICT based Smart extension

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New Initiative - Farmer Producer Organisations

A Pathway to Link Farmers to Value Chains -

A larger strategy to increase the income of small and marginal farmers.

1. Government of Andhra Pradesh is set launch 1000 FPOs covering One Million

Farmers to empower farmers with technical, marketing and institutional management

know how to collectively leverage production & marketing strength.

2. The FPOs aim at reducing the complexity for the farmer and to ensure continuous and

efficient supply to the value chain.

FPOs

Financial & Technical (Credit, Savings,

Insurance, Extensions)

Training & Networking (HRD, Policy

advocacy, etc.)

Marketing Linkages (Contract farming

etc.)

Input Supply (Seed, Fertilizer,

machinery)

Crop/Commodity/Product

Specific FPOS

Value ChainsProduction Clusters

Industry Partnerships

Incentives for Horticulture Sector

Keeping in mind, the vast potential in horticulture sector for both fresh and processed fruits & vegetables, GoAP is giving special emphasis and the following schemes and incentives are in operation

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Mission for Integrated Development of Horticulture (MIDH)

Rashtriya Krishi Vikas Yojana (RKVY)

Prime Minister Krishi Sinchayee Yojana (PMKSY)

National Mission on Oil Seeds and Oil Palm (NMOOP)

Special State Plan for Development Initiatives in Horticulture

Government of AP enabling implementation of the programs in

cluster approach for holistic development of Horticulture Value Chains

Quality Seed / planting materialPre & Post-harvest handling

Primary ProcessingOn Farm Value Addition

Quality CertificationsMarketing (FPOs)

Incentives for Horticulture Sector

IPM/INM/ICM/Gap Certification Programs are under implementation to meet the quality

parameters and standards of the importing countries.

Greenhouse

Cultivation

High Density

Production

Certification

Programs

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Special programs for quality and productivity enhancement are under implementation

for vegetables and flowers under protected cultivation (Greenhouse Cultivation).

High density/Ultra high density/meadow orcharding technologies are being

promoted for higher productivity, quality and to minimize pre and post harvest

losses.

Incentives for Fisheries Sector

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Incentives on Purchase

of Land, lease of

Land/Shed/Buildings

Capital Subsidy /

Financial Assistance

o Aquaculture processing units will be incentivized by providing 100% stamp duty exemption

in land registration/lease of land/, mortgage deed/Bank documentation/ Hypothecation etc.

o For shrimp processing units including cold chain maintenance, subsidy of 50% inclusive

of land cost with upper ceiling limit of Rs.5 crores.

o For fish processing / filleting units including cold chain, land cost etc., subsidy of 50%

with upper ceiling limit of Rs. 7 crores (USD 1 Million)

o For purchase of Reefer vans, a subsidy of 50% with maximum of Rs. 10.00 Lakhs (USD

15,000) per vehicle will be provided from 2016-17 onwards

o Financial assistance will be extended for farm mechanization like pumps and aerators

with 50% subsidy. Solar pumps, solar lights and solar based aerators will be given on

60% subsidy to the prawn and shrimp farms up to maximum of 2 ha per farmer per

annum .

o Interest subvention of 6% will be provided on bank loan subject to maximum of Rs.2.5

Crores (USD 390K) for 5 year period to aqua processing units, ice plants and cold

storages.

o Interest subvention of 6% per annum up to a maximum of Rs.2.00 Crores (USD 310K)

will be provided to the Fish Feed Manufacturing units only for Five Years.

Interest Subsidy

Incentives for Fisheries Sector

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Power and Water

Subsidy

o Power subsidy to fish/prawn/shrimp processing unit and ice plants from the date of

commencement of commercial production and will be on par with industrial policy from

2016-17.

o Power will be supplied to Shrimp and Prawn culture farms at Rs.3.75 ps/ unit for a

maximum of 2 hectares per aqua-farmers/ shrimp farmers from the year 2016-17

Other Incentives

o Cold storage at ports/ Fishing harbours with subsidy will be permitted on par with industrial

policy.

o Financial assistance of 50 % for establishing Water and soil analysis labs with a unit cost

of maximum of Rs.10.00 lakhs (USD 15,000).

o Financial assistance of 40 % for establishing Quality control / Antibiotic residue testing

labs with a unit cost of maximum of Rs. 2 crore (USD 310K).

o Incentives to be provided to feed manufacturing units, aerator manufacturing, fish

processing equipment on par with industrial policy.

Government of India 2016 Budget Snapshot

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Govt of India 2016 Budget Highlights

Allocation for Agriculture and Farmers’ welfare is 35,984 crore (USD 5.5 Billion)

‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 2.85Million hectares will be brought under irrigation.

Implementation of 89 irrigation projects under AIBP.

A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpusof about INR 20,000 Crore (USD 3.1 Billion)

Programme for sustainable management of ground water resources, costing INR6,000 Crore (USD 923 Million) will be implemented

500,000 farm ponds and dug wells in rain fed areas and 1,000,000 compost pitsfor production of organic manure will be taken up under MGNREGA

Soil Health Card scheme will cover all 140 Million farm holdings by March 2017.

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Govt of India 2016 Budget Highlights

2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testingfacilities during the next three years

Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and 'Organic Value ChainDevelopment in North East Region'.

Unified Agricultural Marketing ePlatform to provide a common e-market platform for wholesalemarkets

Allocation under Pradhan Mantri Gram Sadak Yojana increased to INR 19,000 Crore (USD2.9 Billion). Will connect remaining 65,000 eligible habitations by 2019.

To reduce the burden of loan repayment on farmers, a provision of INR 15,000 Crore (USD2.3 Billion) has been made in the BE 2016-17 towards interest subvention.

Allocation under Prime Minister Fasal Bima Yojana INR 5,500 Crore (USD 846 Million).

INR 850 crore (USD 130 Million) for four dairying projects - ‘Pashudhan Sanjivani’, ‘NakulSwasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds

Government of India Policy & Incentives

for Food Processing Sector

Govt of India Policy on Foreign Direct Investment (FDI)

• Foreign Direct Investment (FDI) is permissible for all the processed food

products up to 100% on automatic route except for items reserved for Micro

and Small Enterprises (MSEs).

• FDI in MSEs (MSMED, Act 2006) will be subject to the sectoral caps, entryroutes and other relevant sectoral caps, entry routes and other relevantsectoral regulations.

• The export obligation would be applicable from the date of commencement ofcommercial production and in accordance with the provisions of section 11 ofthe Industries (Development & Regulation) Act, 1951.

• Government of India has declared Agriculture and Food Processing a PrioritySector and encouraging Private Participants and PPPs.

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GOI Incentives for Food Processing

Sectors Products Incentive

Dairy & Horticulture Milk, Milk Products, Vegetables, Nuts and Fruits (Fresh &

Dried)

Nil Duty

Dairy & Horticulture Processed Fruits and Vegetables, Soya Milk

Drinks, Flavored Milk of animal origin

Merit rate of 2% without CENVAT

or 6% with CENVAT

Cold Storage All refrigeration machineries and Parts used

for installation of cold storage, cold room or

refrigerated vehicle, for the preservation,

storage, transport or processing of agricultural,

apiary, horticultural, dairy, poultry

• Pasturing, drying, evaporating, etc. machinery

used in Dairy sector

Nil Duty

A&H Fisheries Machinery for the preparation of meat, poultry,

fruits, nuts or vegetables and on presses,

crushers and similar machinery used in the

manufacture of wine, cider, fruit juices or

similar beverages and packing machinery

Reduction from 10% to 6%

Incentives from GOI are in addition to GoAP incentives

Central Excise duty

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Horticulture • Construction, Erection, Commissioning or installation of original works

pertaining to postharvest storage infrastructure for agricultural produce

including Cold storages for such purposes

• Mechanized Food grain handling system, machinery or equipment for

units processing agricultural produce as food stuff excluding alcoholic

beverages

• Services of Loading, unloading, packing, storage or warehousing of

agricultural produce

• Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing,

labeling of fruits and vegetables

• Services by way of transportation by rail or a vessel and by a goods

transport agency used for transportation of agricultural produce and food

stuff including flours, rice, pulses, tea, coffee, jaggery, sugar, milk, milk

products, salt and edible oil, excluding alcoholic beverages

Nil Tax

Incentives from GOI are in addition to GoAP incentives

Service Tax

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Income Tax


Horticulture

(Cold Chain

Infrastructure)

• Setting up and operating a cold chain facility

• Setting up and operating warehousing facility for storage of

agricultural produce

• Bee-keeping and production of honey and beeswax

• Setting up and operating a warehousing facility for storage of

sugar

100% deduction in

Expenditure (This deduction is

allowed only for the investment

made in the previous year and

prior to commencement of its

operations.)

• New units engaged in processing, preservations and packaging

of fruits or vegetables, meat & meat product, poultry, marine or

dairy products

100% tax exemption for

the first 5 years’ of

operation, and after that, t the

rate of 25% of the profits being

exempted from tax; 30% in case

of a company

Incentives from GOI are in addition to GoAP incentives 69

Nodal Contact Points

AP Food Processing Society (APFPS)

2nd Floor, AP Khadi and Village Industries Board Building,

Humayun Nagar, Masab Tank Road,

Hyderabad – 500028, India

Telephone: +91 40-23392202 Fax: +91 40-23395655

www.apfps.com

M.Girija Shankar, IASSecretary to Industries &

Commerce, Food Processing, Mines & Geology

Y.S.PrasadChief Executive OfficerAndhra Pradesh Food

Processing Society

Abdul Rahman IlyasAdvisor – AgribusinessIndustries & Commerce

(FP)

Y.Vidya SankarOSD – Food ProcessingIndustries & Commerce

(APIIC)

Thank you

Annexure I: Pre-establishment Stage Approvals/ Clearances

Annexure I: Pre-establishment Stage Approvals/ Clearances

Annexure II: Pre-operation Stage Approvals/ Clearances

Annexure II: Pre-operation Stage Approvals/ Clearances

Documents

Schemes Under A.P. Food Processing Policy 2015 - 20...46 Incentives Under A.P. Food Processing Policy 2015 –20 Interest Subsidy 7% per annum on term loan taken for fixed capital