Union food processing minister Harsimrat Kaur Badal is pushing hard for incentives for multi-brand retailers who promise to make 20% of their investments in farm infrastructure. In an interview with ET’s Himangshu Watts and Madhvi Sally, Badal also said she wants to put her ministry on “auto-pilot” with an empowered new body. Edited excerpts:
How have the first two years been, and what lies ahead?
I came into a ministry which I think was paralysed, dysfunctional (and) starved for funds. There were lots of payments piled up from the previous years which had to be cleared. So, the first year went in just setting the house in order. It was only in the second year that we actually got to work on the ground. Now we are going to see the results of the work done. It’s also probably a time to see the fruits of the work done begin to flourish and also to see what is ahead after that. On the one side we are pushing for projects, trying to bring tieups, FDI in multi-brand retail, open up the markets. Another point of focus is to look at value addition for farmers to supplement their income.
Also one starts thinking about whether there has to be an authority to map all this together, so it goes on an autopilot mode in the coming years. The roadmap is set so that wherever shortcomings are, there is an overarching authority to look at it…no matter who is the minister and who is the government.
So, it will be a new authority all together?
I am thinking about it. It will look at all the shortcomings throughout the country, be it in the cold chain, cold storage, in processing parks, cluster scheme… Any other thing connected with food processing from what needs to be grown, processed, etc. will be looked by the authority. Looking at the shortcomings of the earlier schemes I realised we were either creating humongous infrastructures like food parks of 50 acres…(or) cold chains. There was nothing in between. So we need a body which starts planning what after that. I am mulling over that now.
Read more at: Allow multi-brand food retail stores to sell soaps, shampoos: Harsimrat Kaur Badal
Will this authority also monitor projects?
The ministry will continue to do the monitoring. Over the past one year I have tried to ensure that everything is online. It has something to do with ease of doing business, for which I got the maximum resistance in my ministry.
I managed to push it through and I hope that in the completion of two years I will launch it. So all interface will be removed. All applications coming, all grants going, all papers which are required to get grant…it’s all going to be online. It will start with all the mega food parks and then extend to other schemes. This will eliminate corruption and can be easily monitored.
On the click of a button I will know what paper has been filed, how long it has taken for my ministry to clear the project…it can be all seen online.
What kind of resistance did you face on going online?
Typical. I got to know why my food parks were getting delayed when promoters came to me saying that they had applied for grant three months ago, but there has been no response from my ministry. So now when a company wants a grant, it will have to upload the papers and once it’s uploaded, then it’s received.
Officials will be given a set period to check the papers. This project will be launched soon. I am aiming that at the end of my five years in the ministry the level of food processing in the country should improve from 10% to close to 20%.
What progress has been made in allowing foreign direct investment (FDI) in retail?
The policy is yet to come and I am still waiting for it to happen.
I floated the policy but unfortunately it is made by the commerce ministry. FDI is something which they decide.
So after having stakeholders’ meeting, I have given my suggestions, but it is now a different ministry which has to come up with the guidelines.
Have they indicated when it will come?
In the last couple of cabinet meetings it was heard that it was coming, but it didn’t come. Why I envisioned this entire thing of bringing in multi-brand was that it should create infrastructure at farmers’ level. This was something that was missing. It was not my aim to ensure that our people open their wallets to the multinationals who would have become richer themselves. My aim was to use videshi paisa to help our swadeshi farmer for creation of swadeshi infrastructure. That was my whole aim. I was very categorical that certain percentage of FDI that was coming in should be mandatory for creating infrastructure at farm level.
After talking to all stakeholders and foreign cos, they said that they had no issue, as in food retail they would anyway have to do that. I think the commerce ministry probably just thought let’s bring in a policy that will be very popular as it will have no riders. This is what I have written and I am pushing for… I am very clear that if the policy doesn’t help our farmers and if it’s middlemen…and multinationals that become richer, then we have defeated the whole purpose of bringing in a policy.
What all do you want in this policy?
Minimum of 20% of your FDI should be at your farm gate level. It can be forcreation of primary processing, cold storage or even for upgrading agriculture meaning modern technology, seed, ways of doing farming…anything which impacts farmers. Western countries are so scientific. They tell you the time you need to do planting, how many millimetres apart, how much water, drip irrigation, what to grow in between…. We are still stuck up in wheat, rice and sugarcane cycle.
The industry had requested that there should be a sweetener. If I had a choice I would have given them the sweetener as it made sense to me. The industry said that you have allowed FDI only for food, which has very low margins and if it is expensive nobody will buy. When you go to buy fresh fruits the margins are very tight. It’s only when you allow other things with food the money comes in. So the industry had talked about home care products, which may be a soap or a shampoo, toothpaste and all these things, which I thought if were also made in India, it will create employment, revenue generation. There could be a sweetener that: how much infrastructure you create at the farm gate, that much you are allowed for homecare products.
Have you spoken to foreign companies about this?
Yes, I brought these suggestions after talking to all these players from Walmart, Reliance, Tesco, (Kishore) Biyani…to embassy trade representatives too. Larry Murphy JerseyShare This