Fruit-processing micro units need a boost

Rajesh Kumar

An inherent notion deeply ingrained in a typical Himachali mindset that sees a permanent government job as the only respectable livelihood option is a regressive perception afflicting the state for long. All other means are seen as secondary, somewhat of a compromise and reflective of one’s ineptitude. What is more appalling is self-employment is seen as the last option to sustain life. This unfounded predicament has impeded employment-generation efforts in the state in a big way. 

Today we are faced with a huge army of 8 lakh unemployed youth in the state who are not ready to take to traditional agriculture or horticulture as a full-time career option, but are keen on pursuing white-collar jobs instead. Providing such jobs to all is too big a task to be accomplished. Setting up a targeted number of micro units in the fruit-processing sector could be one such viable option that may help in easing the situation to a considerable extent. A strong socio-political will is, however, required if we wish to change the existing employment scenario in the state and generate new and promising employment avenues. 

Why focus on micro units

Himachal’s present industrial policy is aimed at attracting only bigger investors from outside the state by offering tax benefits under central packages mainly to fill the state coffers. No determined efforts are being made yet that may groom entrepreneurs from within the state. We do organise Entrepreneurship Development Programmes (EDPs) from time to time, but seldom take pains to undertake an effective after-exercise intended to elicit the participants’ opinions and decisions in the regard. Of what use are such programmes if they fail to generate enough positive response on the ground? This is because our present policy framework fails to infuse enough confidence in them; because policy formulators never invite opinions from the ground level and are literally oblivious of the concerns and apprehensions, which dissuade young minds from coming forward and taking challenges in their stride. This is where we err.

Why fruit processing

Himachal is blessed with nature’s bounty in the form of abundant fruits and vegetables that grow here owing to its suitable climate. After the top-grade fruit finds its way to the open market, the second-rate ones remain consigned to the orchards in appreciable quantities. This left-out lot comprising second-grade fruits and vegetables for which there are literally no buyers is our chief concern and area of focus.This is where the role of micro units could come in handy. With government initiative, if we could arrange to put this left-out stock to some productive use, it may not only help growers in raking up forsaken revenue, but also generate ample livelihood opportunities for the unemployed youth. To bring it about, we need to put in place an attractive and favourable industrial policy that should address the chief concerns of the would-be entrepreneurs. Following steps could be considered: 

Identify genuine entrepreneurs first

This is the primary and the most important task to ensure the success of any future venture in the long run. After organising EDPs, we must undertake an exercise to obtain feedback from the participants about their opinions and decisions.This would help in shortlisting some of the prospective would-be entrepreneurs. Our failure in identifying genuine entrepreneurs causes the whole effort to go haywire, resulting in the closure of units sooner or later.

Provide bank loans on easier terms 

Once identified, the entrepreneurs could be provided collateral-free softer loans to raise the requisite infrastructure and commence commercial production.

Liabilities of GST,

Income Tax

The government must view the idea of setting up of micro units as its socio-economic responsibility, aimed at generating employment and not additional revenue. Therefore, units with less than Rs 50 lakh as annual turnover could be considered for above benefits.

The present GST regime has been unkind to the existing micro units in Himachal as fruit-based packed products have been placed under the 12% tax slab, which was 5% earlier under the VAT regime. Big players have not much to lose, as their prices have remained more or less unaltered because with abolition of 12%  excise and 12%  GST imposed, the net change has remained almost negligible. Smaller manufacturers, who enjoyed full excise exemption earlier, but were burdened with 12%  GST later, have suffered a net increase of 7% in their product prices. In other words their prices have increased by 7% in contrast to what they were before the GST came into being. 

(The writer is a resident of Samoor Khurd village, Una district)