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With 100% FDI, Narendra Modi calls Food Sector a Priority in Make in India Programme

Modi said India with its rich legacy of spices could provide solutions and offer a win-win partnership as the world was becoming increasingly averse to the use of artificial colours, chemicals and preservatives.

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Prime Minister Narendra Modi. Wikimedia
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New Delhi, November 3, 2017 : Prime Minister Narendra Modi on Friday said the food sector that allows 100 per cent foreign investment was the priority in the government’s ambitious Make In India programme.

Launching a three-day global conference on the food industry here, Modi said food processing was an age old practice in India and simple, home-based techniques like fermentation had resulted in the creation of our famous pickles, papads, chutneys and murabbas that now excite both the elite and the masses across the world.

He said the government had taken a range of transformational initiatives to make the country most preferred investment destination in this sector.

It is priority sector in our ‘Make in India’ programme. 100 per cent Foreign Direct Investment is now permitted for trading including through e-commerce of food products manufactured or produced in India, Modi told the World Food India conference that will see the participation of over 2,000 delegates from 200 companies from some 30 countries.

Apart from representatives of 28 states, it will also see participation of 18 ministerial and business delegations, nearly 50 global CEOs along with heads of all leading domestic food processing companies.

Modi said a single-window facilitation cell provided hand-holding for foreign investors and there were attractive fiscal incentives from the Union and state governments.

Loans to food and agro-based processing units and cold chains are classified under priority sector lending, making them easier and cheaper to obtain, the Prime Minister said.

Modi said the recently launched unique portal – Nivesh Bandhu (investor’s friend) – would bring together information on central and state government policies and incentives provided for the food processing sector.

He said private sector participation had increased in many segments of the value chain but sought more investment in contract farming, raw material sourcing and creating agri linkages.

There were opportunities in post-harvest management such as primary processing and storage, preservation infrastructure, cold chain and refrigerated transportation, the Prime Minister asserted.

There is immense potential for food processing and value addition, especially in niche areas such as organic and fortified foods.

Modi said India with its rich legacy of spices could provide solutions and offer a win-win partnership as the world was becoming increasingly averse to the use of artificial colours, chemicals and preservatives.

Modi said the Pradhan Mantri Kisan Sampada Yojana aimed at creating world class food processing infrastructure was expected to leverage investment of $5 billion, benefit two million farmers and generate more than half a million jobs over the next three years.

Narendra Modi said the government was planning to link agro-processing clusters with production centres through Mega Food Parks, which will offer immense value proposition in crops such as potato, pineapple, oranges and apples.

Minister of Food Processing Industries Harsimrat Kaur Badal in her address said agreements worth $10 billion were expected to be signed during the three-day global event.

Our demand of food is set to double over the next five years. Being six largest food and grocery market in the world, India is a destination that merits global attention in the food sector.

She said there was a need to wage war on food waste to ensure adequate food for all and to avoid a food crisis as the world’s population was set to increase by 25 per cent and the demand for food by 50 per cent by 2050. (IANS)

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Fall Of The Currency And Increase In Oil Prices: India ‘s Turmoil

The falling rupee has given a boost to some of India’s most lucrative exports, such as software services and pharmaceuticals, which add up to billions of dollars.

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Rajesh Kumar, left, shares a ride to work with another employee, Dilip Swain, right, as higher petrol prices in India begin to be felt in people's pocketbooks.VOA

The fall of the currency of India to record lows and rising global oil prices have raised worries that the world’s fastest growing economy faces headwinds that could hurt the fortunes of Prime Minister Narendra Modi’s party in next year’s general elections.

From people filling fuel at gas stations to thousands of students heading out to study overseas, the impact of the slumping rupee is sparking discontent.

Having plunged by about 12 percent against the dollar this year, the rupee is one of Asia’s worst faring currencies, and as in other countries, the slide has accelerated since the crash of the Turkish lira.

“The reasons are global. We must bear in mind that in last few months, dollar has strengthened against almost every currency,” said Finance Minister Arun Jaitley recently as he tried to send out reassuring signals that India’s economy is on track.

India
The rupee has plunged by about 12 percent this year raising fears of spiraling inflation. VOA

The rupee’s sharp depreciation comes at a time when the economy had recovered from a slowdown and surged to a two-year high in the quarter that ended in June. Forecasts put growth for this year at 7.5 percent.

Economy will slow

But economists warn this momentum will be difficult to sustain as the tumbling rupee, along with rising crude oil prices, takes a toll on growth. India, the world’s third largest oil importer, gets almost 80 percent of its fuel needs overseas.

“The government needs to mellow down on growth aspirations,” said N.R. Bhanumurthy, economist with the National Institute of Public Finance and Policy. “The growth needs to come down to a little less than 7 percent.”

Even as the government faces the prospect of a slowing economy, it is under pressure to lower taxes on gas and diesel to bring down the sharp rise in prices. Fuel is one of the most heavily taxed items in India, with rates as high as nearly 50 percent. Prices vary from state to state, but they have gone up by about 14 percent this year.

Hoping to cash in on the growing disaffection over the surge in fuel prices and the sliding rupee, opposition parties led nationwide protests that shutdown offices and schools in several cities this week.

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Discontent with spiraling fuel prices poses a challenge to Prime Minister Modi’s Bharatiya Janata Party ahead of general elections next year. VOA

The government dismissed the protests, saying that although people faced momentary difficulties, they understood they were because of factors beyond its control.

Political analysts are not so sure, pointing out that fuel prices are a politically sensitive issue in India and usually result in a spike in inflation.

“Anger is rising, there is resentment,” said Satish Misra at the Observer Research Foundation, warning the ruling party will face a backlash “Obviously that is going to have a negative impact on the electoral fortunes of the Bharatiya Janata Party, there is no doubt about that.”

Warnings from economists

Among those who are upset with the high fuel prices is Rajesh Kumar, who commutes 30 kilometers to the advertising agency where he works. Hit by the higher prices that eat into his income, he has started sharing the ride with another employee.

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Narendra Modi. Wikimedia Commons

“I have given up the idea of buying another car,” he said despondently. “I will not be able to afford the cost of running it.”

Economists however have warned the government against giving in to populist pressures ahead of a series of state polls later this year and general elections around April next year. They say lowering taxes on fuel or taking measures to prop up the currency will strain the country’s finances and hurt the economy in the long run.

Also Read: Diverse Gathering To Be Addressed This World BioFuel Day: PM Narendra Modi

“One needs to be more careful and vigilant,” Bhanumurthy said. “It is easy for India to stay with low growth than experiencing the high deficit.”

But there is also some good news for the Indian economy. The falling rupee has given a boost to some of India’s most lucrative exports, such as software services and pharmaceuticals, which add up to billions of dollars. (VOA)