Food Processing Industry

It offers value for money and the products are focused mainly towards children and young adults and products are being catered to those who lead a fast modern day life. After realizing the potential and in order to provide further boost, the government has exempted from excise duty for most of the products like condensed milk, ice cream, preparations of meat, fish and poultry, pectin’s, pasta and yeast. Excise duty on certain ready-to-eat packaged foods is also reduced to 8 per cent from 16 per cent. The food processing industry has been benefited from the reduction in excise duty on paper, a cut in customs duty on major bulk plastics and a reduction of customs duty on packaging machines, which would reduce packaging costs (Budget, 2007).

As we know, our body requires food for growth, repair and replacement of its worn-out tissues. The food which is very important for us provides us the required raw material, energy and other regulating substances, like vitamins and minerals for our body. It is required for the smooth functioning of the body, besides meeting the calorific requirements like carbohydrates, proteins, fats, etc. India is just behind China as the world’s second largest producer of food. It has the potential of being biggest industry with food and agricultural sector contributing 26 per cent to Indian GDP and the capacity of producing over 600 million tons of food products every year; will get doubled in next ten years. The consumer spends their largest share of income on food accounts. The overall expenditure on the food and food products account for about 53 per cent of the value of final private

(www.tata.com). The income of urban people have increased and they were spending Rs.1060/= on an average and which was on the higher side i.e. Rs.441 for food and Rs. 619 for non-food items. According to the data, the expenditure was Rs. 511 for rural India, which comprised of Rs.305 for food and Rs. 206 for non-food commodities according to the average monthly per-capita consumer expenditure (MPCE). According to NSSO, “there was a decline in the share of food in India in total expenditure that is 54 per cent in rural areas compared to 64 per cent in 1987-88 and 42 per cent in urban areas compared to 56 percent during 1987-88 (National Sample Survey Organization, GOI).” In India, according to the traditional culture, majority of food items is being consumed still at home. Due to various reasons, out-of-home food consumption has been increasing due to increase in urbanization which had brought about changes in food habits. It has brought changes like, breaking up of the traditional joint family system, desire for better quality food, time has come where there is increased need for convenience, increasing number of working women, rise in per capita income, changing lifestyles and increasing level of affluence in the middle income group etc. The share of urban population in the last two decades has increased from 23.3 per cent in 1981 to