The Union Budget this year gave quite a platefull for the food processing industry. These include slashing the excise duty on soft drinks from 16 to 8 per cent and the announcement of food processing as a priority sector for bank credit. Big food and beverage companies are cheering to that.

According to the Coca-Cola spokesperson, the finance minister in his Budget proposal has taken the rationalisation of indirect taxes a step further. "We are happy to note that the finance minister has taken into cognisance the justifiable pending demand of the beverage industry for removal of Special Excise Duty (SED) on aerated waters thus bringing it at par with other processed food items," the spokesperson said.

Industry experts say that the removal of SED will enable the soft drink industry, dominated in India by the two Cola majors, Coke and Pepsi to make further investments that will fuel growth in demand, resulting in higher employment, revenue to the government and overall positive impact in related sectors and the economy.

Also, the finance minister announced in his Budget speech that excise duty on ready to eat packaged foods and instant food mixes like Dosa and Idli mix will be reduced from 16 per cent to 8 per cent. Also, with a view to give a fillip to the food processing industry, the finance minister has proposed to fully exempt from excise duty condensed milk, ice cream, preparations of meat, fish & poultry, pectin, pasta and yeast.

Big time corporate houses in the country including Hindustan Lever Limited (HLL), ITC-which is increasingly focusing on its food business, Dabur, Nestle, Amul and South-based MTR foods are only some of the corporates who are expected to put their act together to reap the benefits from the helping hand extended to the food processing industry. What’s more, Enhanced foreign as well as domestic investments will pour into the food processing sector in India, say industry analysts.

With Chennai becoming a major centre for the Indian automotive industry, Pondicherry is poised to emerge as the auto ancillary sourcing base of South India, attracting investment and orders from large mother units from the neighbouring states, according to the exhibitors of IndEX 2006 — the three-say focused Vendor Development Exposition and Business Meet organised by the Confederation of Indian Industry (CII) at Pondicherry.

The exhibitors are also foreseeing the emergence of a strong vendor base for Pondicherry’s IT hardware industry that produces over 60 per cent of IT hardware in the country.

According to them, Pondicherry has all the ingredients for success such as proximity to Chennai, quality power, skilled workforce, industry base, proactive government, etc to become the sourcing destination of South India.

"With Chennai’s the real estate and infrastructure cost skyrocketing and the city getting more and more congested, Pondicherry is emerging as the ideal and cost-effective expansion base and sourcing destination for the large automotive and auto component industries," said A. Natarajan, vice-president, Sundram Fasteners (Zhejiang) Ltd.

Sundram Fasteners, for instance, has been continuously expanding its operations in Pondicherry since its inception — the monthly turnover of the company, which was Rs 40 lakhs in 1994 has grown to Rs 10 crores last year.

As a part of its initiative to tap the engineering potential of the small and medium enterprise segment, Tata Consultancy Services, a technology service and consulting company, unveiled its first engineering centre of excellence here. The centre will target automotive and aerospace verticals here even as the company has plans to launch similar such processes in various

manufacturing clusters across the country in a phased manner, S. Ramadorai, managing director and CEO of TCS, told reporters here.

Mr Ramadorai said, "If India has to succeed in the global market, then it must strengthen its manufacturing base. Engineering SMEs from India are gaining momentum globally and Coimbatore accounted for 11 per cent of the total SMEs in the country. TCS’ superior IT and engineering capabilities will help establish SMEs in the global arena further".

He said if this business model of Centre of Excellence took root here, then the model will be replicated in 30 to 40 processes across India. He also said that a "right ecosystem" must be created for the SMEs to develop in the country..