The Punjab government is planning to incorporate new guidelines and also review the existing concessions for the new rice mills to be set up in the state under Agri Mega Projects (under the scheme investment should Rs 25 crore or more) of the state government. The move by the state government is likely to give relief to over 4,000-odd rice shellers, majority of them in small category in the state who are struggling over thin margins. It would also help the new mills to find a strategic location where there is much potential.
Speaking to Business Standard, sources in the Punjab Agro Industries Corporation Ltd confirmed, “The state government is planning to incorporate new guidelines in the existing policy of the agri mega projects, as in some districts the concentration of rice mills is very high, which makes business unviable. So, we have identified three districts where the potential of setting up new rice mill exists. We have identified Amritsar, Guradaspur and Ferozpur as the districts where the influx of rice shellers is less, so there lies a potential for a new entrant.”
He added, “We have given recommendations that concessions be granted to those rice mills under mega projects that wish to set up units in these districts only. Further, we are also planning to promote modern units (broken is meagre), units having congeneration facility and preference would be given to rice mills who wish to set up scientific storage system under the policy. Besides, we are also planning to review the existing concession which is being granted to new rice shellers under the policy.”
He added these were the recommendations given to the state government in the recently concluded meeting, and now it was up to the state cabinet to decide.
Since the policy is under review, no fresh approval has been granted to fresh investments in the state under the agri mega projects. Already the department has got applications from five companies who wish to set up new rice mills in the state with an investment of Rs 150-200 crore but only after the decision of the empowered committee they would be granted approval, as the existing policy is under review. Further each rice mill would have milling capacity of 12-20 metric tonnes per hour.
It is worth mentioning that Punjab has over 4,000 rice mills in the SME category and 15-20 in large category. At present, Punjab gives a number of concessions to the units where the fixed capital investment in the project is Rs 25 crore or more under the agri mega project.
With the mega units getting a plethora of concessions from the state government, the existing units, especially the smaller units are facing hard times. Last year, bumper ‘basmati’ production in the state attracted other rice shellers here to set up new units under the mega industrial projects policy, which further intensified the competition.
At present, under the scheme, the units which are approved get a 75 per cent exemption from payment of mandi fee(two per cent), rural development fund (two per cent) and infrastructure cess on purchase of non-FCI grade foodgrains directly from farmers for processing by the unit for a period of 10 years.
There is also provision for Rs 100 exemption on electricity duty on captive consumption of power generated by the unit. Also, it grants 50 per cent exemption on electricity duty on purchase of power from Punjab State Electricity Board (PSEB) for five years from the date of release of connection.
