Ashok Sethia, president, Solvent Extractors Association on India (SEAI), said the oil seeds sector was disappointed with the Budget. In view of the country being heavily dependent on import of oils, the SEAL had suggested the establishment of an "Oilseed Development Fund" to raise production and productivity; giving weighted income-tax deduction for the oilseed extension programme; and re-imposing Custom duty on vegetable oils to check excessive import. But none of the issues very important to the oilseed sectors'growth has been addressed by the Finance Minister. The industry is greatly disappointed as no action / measure has been suggested in the Budget to encourage oilseed production and productivity.
Davish Jain, president, Central Organisation for the Oil Industry & Trade (COOIT), said the Budget had no concrete steps to achieve 4% growth in agriculture. The serious problem of stagnating productivity of oilseeds had not been addressed and the persistent and justifiable demand of levying Customs duty on edible oils, particularly cheap palm oil, had been totally ignored. The unbridled cheap import of edible oil at zero duty was highly discouraging to the farmers and would affect the domestic oilseeds production as high imports of cheap edible oil was a disincentive to the farmers, while helping the foreign suppliers. The industry's demand for the establishment of an Oilseeds Development Fund, which could be easily funded by putting aside a part of the Customs revenue from edible oil imports, had once again been left unheard, he added.
For the importers of vegetable oils, who had pinned their hopes on the finance minister to bail them out of burdensome stocks, the disappointment is deeper. There is no change in the rate of customs duty on imported vegetable oils (zero duty on unrefined oils and 7.5% on refined oils). The decision to maintain status quo on customs duty rate on an essential food item of mass consumption, and in which the country is facing a shortage, is fully justified. Any levy of duty would have hurt the poor, but brought windfall profits to a handful of business houses. The finance minister saw through the game and desisted from tinkering with the consumer-friendly duty regime.
Source : Fnbnews.com