Jaitley announces sops for food processing, relief to wind energy units

Finance minister, Arun Jaitley today announced the setting up of a special fund to provide credit at affordable rates to food processing centres, in an effort to give a boost to the food processing sector industries.

The finance minister also announced reliefs to wind energy companies.

Replying to debate on the general budget in Lok Sabha today, Jaitley said a fund with a corpus of Rs2,000 crore will be set up to provide affordable credit to food processing units.

This, he said, will help provide credit to food processing units at affordable rates.

Jaitley also clarified on the provision related to wind energy in the budget, saying that accelerated depreciation will continue for the sector.

The finance minister said the government may take 'out of the budget steps' and will encourage manufacturing sector growth in the long run, and revive the nation's economic growth that tumbled tremendously in the last couple of years.

But, he suggested, "We need to correct lopsided subsidy policy".

Retrospective taxation has destabilised business; it is a lesson to learn, he further stated.

Jaitley also said that the Indian economy had witnessed significant growth for a few years after the first generation of economic reforms were executed in 1991.

He said, he has received a lot of suggestions on various tax proposals and that he would respond to them in his reply on the Finance Bill next week.

There are demands from various sections that tax proposals related to debt mutual funds need to be relooked, besides clarity on General Anti Avoidance Rules (GAAR).

Expressing concern on rising drug addiction cases especially in States located on the border with Pakistan, the finance minister announced setting up of a rehablitation centre in Punjab with an initial corpus of Rs50 crore.

Earlier, defending his proposal of raising the foreign direct investment limit in defence sector, he said that currently the nation imports almost 70 per cent of defence requirement which entail huge foreign exchange outgo.

Now, if companies can be set up here with 49 per cent FDI, then it will resolve a number of issues.

He emphasised that allowing 51 per cent would have meant shifting the plant from other countries to India which means no benefit. At the same time, foreign investors would not be interested at 26 per cent, so ''49 per cent is the best option''.

On FDI in insurance, he said that this sector is fund starved. More important, resources are needed especially in health sector. Keeping all these in mind, 49 per cent FDI has been proposed with full Indian control, he said.