Despite the food shortage issues and the constant rising food inflation, food wastage has always been a problem that India has been faced with. The loss due the wastage of agricultural produce has at the national level is estimated at Rs 92,651 crore.

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This is calculated using production data of 2012-13 at 2014 wholesale prices, according to data from the Central Institute of Post-Harvest Engineering and Technology (CIPHET), Ludhiana.

The annual wastage of agricultural produce, milk, meat, marine and poultry products as assessed by CIPHET and the annual value of harvest and post-harvest losses. 

Fruits and vegetables, and cereals account for a large majority of losses due to agricultural wastage. While the loss due to wastage of fruits and vegetables amounted to Rs 40,811 crore, loss due to wastage of cereals amounted to Rs 20,698 crore.

In comparison, there has been an overall drop in allocation to social sectors in 2015. The union budget had slashed expenditure on welfare measures by Rs 4.39 lakh crore, according to a new report by The New Indian Express.

For instance, Finance Minister Arun Jaitley in Budget for 2015-16 had reduced spending on education by 16% to Rs 69,074.76 crore and health by 15% to Rs 32,068.17 crore.

Education spends in India has been lower than the world average. While globally 4.9% of the GDP was spent on education in 2010, India spent only 3.3% of its GDP, according to the World Bank data.

Government efforts to improve storage of food

To curb the losses in supply chain of agriculture produce and to improve the existing infrastructure for food processing, the Ministry of Food Processing Industries has been implementing the Schemes of Mega Food Parks, Integrated Cold Chain, Value Addition and Preservation Infrastructure, and Setting up/ Modernisation of Abattoirs.

“Dr Saumitra Chaudhuri Committee in 2012 constituted by the then Planning Commission had indicated cold storage requirement of 61 million tonnes. The present capacity of cold storage is estimated at around 32 million tonnes in the country,” said Minister of State (MoS) for Food Processing Industries Sadhvi Niranjan Jyoti in a written reply in Lok Sabha on Tuesday.

In addition to operationalisation of 4 Mega Food Parks and 29 Cold Chain Projects during 2016-17, Government has also approved setting up of 100 cold chain projects and 250 units under the scheme of creation/expansion of food processing and preservation. The projects set up under the Schemes of this Ministry are granted financial assistance at a higher rate in difficult areas and North East Region as compared to general areas.

The government has also allocated funds to various states under the cold chain scheme. In 2015-16 the allocation had increased to Rs 158.96 crore in 49 cold chains, from Rs 153.05 crore in 46 cold chains in 2014-15. Currently in 2016-17 the number of cold chains funded is 25 for which Rs 61.57 crore.

Apart from this, there are various other incentives provided by the government for cold chain sector.

Details of various other incentives provided by the Government to the cold chain sector

  • Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables have been exempted from Service Tax in Budget 2015-16.
  • Loans to food & agro-based processing units and Cold Chain have been classified under Agriculture activities for Priority Sector Lending (PSL) as per the revised RBI Guidelines issued on 23/04/2015.
  • Under Section 35-AD of the Income tax Act 1961, deduction to the extent of 150% is allowed for expenditure incurred on investment for (i) setting up and operating a cold chain facility; and (ii) setting up and operating warehousing facility for storage of agricultural produce.
  • 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, aquatic and marine produce and meat under Tariff Head: Chapter 84 are exempted from Excise Duty.
  • Construction, erection, commissioning or installation of original works pertaining to post-harvest storage infrastructure for agricultural produce including cold storages for such purposes are exempted from Service tax.
  • Capital investment in the creation of modern storage capacity has been made eligible for Viability Gap Funding scheme of the Finance Ministry. Cold chain and post-harvest storage has been recognized as an infrastructure sub-sector.