CENTRAL EXCISE DUTY
In the Union Budget 2000-01, the
Finance Minister who had imposed a 100% increase in the rate of
Excise Duty on biscuit from 8% as a part of the rationalisation
of CENVAT and introduction of single rate of Duty did not offer
any concesison on the Budget for 2001-02. On the other hand the
50% exemption to small packs was withdrawn. During these years
and in 2002, the Federation submitted strong representations to
the Union Finance
Minister seeking relief in the Excise
Duty on biscuits, giving biscuit special treatment that it deserves
on account of the exceptional nature and sensitivity to price
The Federation submitted its Pre-
Budget Memorandum for 2002 demanding at least 50% Excise Relief.
It is a matter of great satisfaction
that the Govt. has, after 3 years, acceded to our demand and grated
reduction in Excise Duty (from 16% to 18%) in the Union Budget
INTEGRATION OF VARIOUS FOOD
The Food Processing Industry have
been experiencing the adverse affect of multiplicity of various
Acts/ Rules and Regulations for food standards under the Prevention
of Food Adulteration Act Standards of Weights & Measures Act,
Food Products Order, the Meat Products Order, the Bureau of Indian
Standards & MMPO, etc. affected the Food & Food Processing
Sectors. They need to be modernised & converged.
As a consequence of various representations
of industry, the Govt. of India has decided to set up a Group
of Ministers (GOM) to propose legislation and other changes for
preparing a Modem Integrated Food Law and related regulations.
The Ministry of State for Food Processing Industries is the Nodal
Ministry to coordinate the bill.
Our federation submitted its recommendations
and suggested to placed before the Group of Ministers, covering
the broad frame work required for the food legislation as well
as specific issues such as:
- The main objectives of the new Integrated Food Laws
& its structure
- Methodology of development of Standards
- Provisions of Labelling
- Acceptance of a basic list of additives
- Matters relating to GMP, GHP & HACP
- Issues related to Codex
- Procedure for sampling& launching of Prosecutin
- Grading of violations according to the nature of
Recent Changes / Amendments
Prevention of Food
Adulteration Rules The Ministry of Health
& Family Welfare, Govt. of India vide its Notification No.
GSR 908 (E) Dt. 20.12.2001 has provided for printing of statutory
symbol on all products containing vegetarian ingredients. The
notification came into effect from 20 June 2002. As members may
be aware the Govt. has earlier amended PFA Rules vide notification
No. 245(E) Dt.4.4.2001 provided for statutory printing of the
symbols of food packages containing non vegetarian ingredients.
This notification has already come into effect from 4 October
Our Federation along with apex organizations
such as CII & CIFTI have represented to Hon'ble Union Minister
for Health and Family Welfare seeking extension of a minimum period
of 6 months for implementation of the notification, particularly
on account of hardships in printing vegetarian symbol in advertisements.
A delegation from the industry met the Secretary, Ministry of
Health and Family Welfare and apprised him of the hardships faced
by industry. Further follow up is in hand.
Standards of Weight and Measures
(PC) Rules 1977
The Standing Committee on Food Standards
has decided that the following issues be referred to Technical
Committees to look into all aspects and to make recommendations
to the Standing Committee:
(i) Revision of First Schedule as
regards tolerance (maximum permissible error.)
(ii) Deletion of Rule 11 (a) and
the Fourth Schedule for declaration of words "when packed"
with net quantity declaration on packages.
At our request the representatives
of industry have been included in the Technical Committee for
each zone. Members of the Technical Committees will be visiting
the factories of manufacturers for ascertaining the position regarding
industry's plea for not reducing the maximum permissible error
BUREAU OF INDIAN STANDARDS
The Meeting of the Bakery Confectionery
and Nutritious Supplements Sectional Committee of BIS was held
on 1 March 2002. The Draft standards for biscuit were discussed.
FBMI submitted its suggestions on various issues including classification
of biscuits into 5 categories – sweet /semi sweet, crackers,
cookies and speciality biscuits. It has also been suggested that
separate standards should be evolved for wafers. FBMI has also
represented that proposal for Peroxide value should not be included
in the standards for biscuits and there should not be any requirement
of checking biscuits for micro biological parameters. Supporting
data received from members on total plate count, coliform count,
E coli and stapylococcus aureus, etc., have already sent to the
Bureau of Indian Standards showing that bacteria cannot remain
alive at the temperature at which biscuits are baked.
OFFER OF GRANT FOR FOOD PROCESSING
The FBMI along with other organizations
of industry had requested the Ministry of Food Processing Industries
to revise its assistance for promotion of food of processing industry.
Accordingly the Ministry has offered grants unto Rs. 25 lakhs
or 25% of the Capital cost for setting
up / expansion / modernisation of units in all sectors of food
processing industries. The Ministry is also presently revising
its outline of assistance under the schemes of 10 th Plan. The
information has been circulated to members vide No. FB 1nd 7 52
SALES TAX / VAT ON BISCUITS
As members are aware, though the
Empowered Committee of Finance Ministers fixed the minimum floor
rate of Sales Tax on biscuits at 8%, various State Governments
are levying Sales Tax on Biscuits in the range of 8% to 16%.
The Sales Tax regime is proposed
to be replaced with Value Added Tax (VAT) from 1 April 2003. The
Federation has already represented that biscuits being a nutritious
snack food product predominantly consumed by the consumers from
the lower strata of society should be included in the list of
goods at the minimum level of VAT. Representations have already
been sent to Chief Ministers and other officials concerned in
Punjab, Haryana, UP, Karnataka MP and Kerala. Many States such
as Himachal Pradesh, Delhi, Arunachal Pradesh, Kerala have however,
deferred introduction of VAT. The trading communities in Delhi,
Tamil Nadu, etc. have resorted to agitations against levy of VAT.
As far as biscuit is concerned, it is learned that VAT @ 12.5%
is proposed to be levied by many states. FBMI has therefore, urged
States to fix the rate of VAT on biscuits at the minimum level
of 4% meant for items of mass consumption.
FOOD SAFETY AND QUALITY
The Ministry of Health and Family
Welfare and the Ministry of Food Processing Industries have formed
different Sectoral Groups in ordesr to facilitate formulation
of a proper and efficient Food Safety Programme towards implementation
of GMP , GHP and HACCP in the food industry, either under law
In the Group on Bakery products sector,
FBMI has been made the Convenor of the Group with AIBMA, Society
of Indian Bakers and Britannia Industries Ltd as members. The
meeting of the Sectoral Groups was held on 20 June 2002 at Nirman
Bhawan New Delhi. The President, FBMI attended the meeting. Subsequently,
FBMI has submitted its objections 1 suggestion to the Ministry
of Health, Govt. of India, and the text of which is given in Arnnexure-
FOOD PROCESSING INDUSTRY POLICY
As the members may he aware, the
Ministry of Food Processing Industry is presently undertaking
the formulation of a comprehensive Food Processing Industry Policy.
Our Federation has submitted its
views / suggestions for appropriate incorporation in the Policy,
the text of which is given in Annexure B
TRAINING PROGRAMME IN BISCUIT
With the objective of imparting Training
to the personnel in the biscuit industry as also to prospective
entrepreneurs, FBMI in collaboration with its members and other
organizations, conducts training programme in
Biscuit Manufacture for the
last two decades. The XIII Training Programme was organized at
CFTRI Mysore on 28 to 30th August 2001. The XIV Training Programme
has just concluded at the Resort Country Club, Gurgaon, Haryana,
from 25th to 28th March 2003. M/s Britannia Industries Ltd and
Parle Products Ltd cosponsored both the Training Programmes.
FOOD REGULATORY MEASURES –
During the period underreport, there
has been various proposals for changes/amendments in the important
Food Law affecting our industry, such as PFA Act/Rules, Standards
of Weights & Measures (Packaging Commodities) Act/Rules, etc.
Some of the important issues in this
area of Food Laws and follow up action by FBMI are given below
Packaged Commodities Rules
– Standards of W & M Act
The Dept of Consumer Affairs (Director
of Metrology), Govt. of India, proposed mandatory printing
of 1st point price, in addition to MRP, for food products
like biscuit etc. Our Federation submitted objections to the said
proposals, as there has never been any grievance from consumer
forums against the biscuit industry and this would on the one
hand add to the cost of packaging/printing and on the other hand
would only create confusion for the consumers without any benefit.
The proposal has been kept in abeyance.
Similarly, our Federation on its
own and through apex organizations, effectively pursued and objected
to the proposed amendment in the Standards of Weights & Measures
(PC) Rules, for making 50% reduction in the present Maximum Permissible
Error in weight of biscuit (Tolerance Limit),
on the ground that various factors such as atmospheric/environmental
changes affect moisture, temperature, and consequently affect
the weight of biscuit, at both the manufacturing, marketing/retail
levels, and hence the present Tolerance Limit should be maintained.
The Sub-Committee of the Committee on Food Standards,
constituted sub grounds of experts in various Zones/States to
review the issue with representatives of industry, to visit biscuit
units and recommend their view points on Tolerance Limit, together
with another proposed amendment of discontinuing with the proviso
of printing “When Packed” on the packages of biscuit
and other food products, which was also objected to by our Federation
by representations and meetings in the Sub Committee of the CFS.
Expert from our membership participated in this process through
CIFTI. At the time of this Report, the issues involved are under
consideration/ review by the Committee on Food Standards (CFS).
Approval of Additives
The list of various additives needed
for making Biscuit is required to be approved by the Standing
Committee on Weights & Measures. The Committee has held various
sittings in this connection. FBMI has represented on he Committee
for scrutinizing various additives for which various food processing
industries have sought approval.
Prevention of Food Adulteration
Act / Rules
Members reported various instances
where the PFA authorities in the States are adopting penal action,
even in cases of very minor offences / errors under the PFA Rules.
FBMI suggested that such minor errors etc should be compounded,
avoiding prosecution, harassment and resultant losses to biscuit
units. This issue has also been referred to CIL and CIFTI for
further follow up.
Introduction of HACCP/GMP/GHP
The Govt. of India (Ministry of Health),
has formulated proposals to introduce the concepts of Hazard Analysis
Control Convention Procedures (HACCP), Good Manufacturing Practices
(GMP) and Good Hygienic Practices (GHP), as a step towards eventual
adoption in the various states in accordance with the International
Codex Alumnus, in the context of trade terms and regulatory, measures
under the WTO regime.
After discussions with FBMI and
other organizations, the Dept of Health constituted Sectoral Groups
on various categories of food processing industries. The Sectoral
Group on Bakery Products consisted of FBMI, as Convener and FBMI
and SIB as members. After detailed deliberations, the Federation
submitted our comments and suggestions, highlighting the hardships
that the biscuit units would face in the event of statutory enforcement
The Federation suggested
that the concepts of HACCP etc should be made voluntary in the
first two/three years, keeping in view the ground realities in
the bakery sector and due to the fact that the implementation
of HACCP/GMP/GHP may be beyond he financial and technical capabilities
of majority of the biscuit manufacturers and compulsory introduction
of these regulations would adversely impact the viability and
may lead to closure of a large number of bakeries in the country.
FBMI, after detailed deliberations by the Executive Committee,
suggested to the Govt. of India that, in the first instance projects
for imparting training to the Managers/Executives and workforce
in the bakery industries should be organized so as to create awareness
and knowledge on these complex regulatory aspects and educate
the personnel in the industry on various aspects of HACCP etc.
FBMI has proposed to organize such Training Programs and Workshops,
in collaboration with the Dept of Health, Govt. of India. Specific
project application has since been submitted by FBMI, which is
Convener or the Sectoral Group on Bakery Industries a mentioned
is glad to inform members that the government of India has
accepted our suggestion and as desired by the Ministry of
Health, Govt. of India, a four day Training Programme /
Workshop on HACCP/GMP/GHP will be held as per the following
Day & Dates
|Wednesday 28 January
to Saturday, 31 January 2004
National Institute of Biology
A-32, Institutional Area
Sector – 62
Noida- 201 302 (GB Nagar, UP)
Unified Food Laws –
As members are aware, the food processing
industries, including Biscuit / Bakery segment, are subjected
to and administered by a large number of statues i.e. PFA Act
/ Rules, Weights & Measures Act, Packaged Commodities Rules,
MMPO / FPOA orders under Essential Commodities’ Act / Rules,
Agmark, BIS etc. There are much multiplicity of implementing /
enforcing Agencies / Departments for watch one of these Acts and
Rules, both at Central and State levels. Unfortunately, many a
time there are instances of overlapping and even contradictions
between such Agencies / Departments. PFA Act / Rules are recipe
based, and focus on prosecution / penal action, even for minor
/ technical errors etc. which are also different in the States.
Similarly, in the Standards of Weight
& Measures Act and PC Rules, there have been plethoras of
amendment, and proposals for more restrictions on the food processing
industries including Biscuit and this has resulted in unavoidable
hindrances in the development and growth of the industries.
It is in this context that our Federation
in close coordination with CIFTI, CII, FICCI, PHDCCI urged he
Government to evolve a single Integrated Food Law, encompassing
the existing legislation’s mentioned above, with main focus
on development and promotion of the Food Processing, Agro Based
industries in the country, paving way for creation of large employment
generation, consumption of varied types of safe food products
of good quality, at reasonable prices benefiting consumers particularly
those in the lower and middle segments of the society. Exports
and better capacity utilization also need to be encouraged in
the proposed Integrated law, which would also result in higher
productivity and better revenue for the Central and State Governments.
As a result of such concerted efforts
and presentations by organizations of industry, including AIMBA
the Government constituted the Justice Venkatachalam Committee
to review the entire gamut of the existing Food Laws and to recommend
the ways ad means and basis for unifying these Acts / Rules and
regulations into an Integrated Food Law (Act). After due consideration
of all aspects and by inviting suggestions from Govt., Industry
and Commerce as well as consumers and other important sections
of the community at large, the Committee submitted its report
containing detailed suggestions / recommendations on the imperative
need for integrating the existing multiple food laws.
Accordingly, the Govt. formed a Group
of Ministers with the Ministry of Food Processing Industries as
the nodal point and this comprehensive exercise has resulted in
the Draft Food Bill 2002 presented to the Group of Ministers.
The said Draft Food Bill 2002 has been formulated to “provide
for the production, manufacture, processing and sale of safe and
suitable food systematic and scientific development of food industry,
introducing new technologies, imparting new inputs of market dynamics,
and to create an enabling environment for innovation and value
additions, ensuring high degree of objectivity and transparency
and to provide for the establishment of a Food Development an
Regulatory Authority of India an the Council for Food Standards
and for matters connected therewith or incidental thereto.
In addition, a Draft Prevention of
Food Adulterations (Amendment) Bill, 2002 has also been prepared
and disseminated for further deliberations. The relevant excerpts
from the preamble of the Draft Food Bill, 2002, along with the
“Concept Note” on the Draft PFA (Amendment) Bill 2002
is given Annexure-C.
Our Federation, jointly with other
apex industry organizations, is continuing follow up with a view
to achieving introduction of the Integrated Food Act.
FOOD LAWS – A
REVIEW OF THE SCENARIO
The year under report witnessed controversial
development relating to allegations against certain food processing
industries such as mineral / drinking water, soft drinks, etc.
regarding contents of pesticides, heavy metals, etc, leading to
constitution of a Joint Parliamentary Committee (JPC) and issuance
of a Draft Notification by the Government of India stipulating
permissible contents of pesticides, heavy metals, etc in various
food products. FBMI interacted with the Government and with the
apex organizations of industry. The Executive Committee discussed
these developments in detail, in the context of the manufacturing
process involved in the biscuit industry.
Weights & Measures
Act (PC) Rules
The Ministry of Consumer Affairs, Govt. of India
initiated action to reduce the existing Maximum Permissible Error
(Tolerance Limit) in weight of biscuit, by 50% . The Federation
represented against the proposal and actively participated in
the Sub-Committee constituted by thy Government under the Chairmanship
of the Director, Legal Metrology, Ministry of Consumer Affairs.
As a result, the proposal to amend tolerance limit has been deferred.
Prevention of Food
The Ministry of Health, Govt. of India issued
a Draft Notification on the list of approved additives. The Federation
submitted its objections/suggestions and also tendered oral evidence
before the Standing Committee. Further follow up action is in