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Cabinet approves PLI scheme for food processing industry

Outlay of Rs 10,900 crore; scheme expected to create over 2.5 lakh jobs

PTI08-04-2020_000247A The first component of the scheme will incentivise manufacturing of four major food product: ready to cook, processed fruits and vegetables, marine products and mozzarella cheese | Representational image

Prime Minister Narendra Modi-led cabinet approved production linked incentive (PLI) scheme for food processing industry for creation of globally competitive food manufacturing companies, and support Indian food products in the international markets. The scheme will carry an outlay of Rs 10,900 crore, and is expected to create over 2.5 lakh jobs.

The first component of the scheme will incentivise manufacturing of four major food product: ready to cook, processed fruits and vegetables, marine products and mozzarella cheese. The scheme will also cover innovative and organic products, eggs, poultry meat and egg products. The scheme will support food manufacturing entities with stipulated minimum sales and willing to make minimum stipulated investment for expansion of processing capacity and branding abroad to incentivise emergence of strong Indian brands.

“It will aim to create global food manufacturing champions and strengthen select Indian brand of food products for global visibility and wider acceptance in the international markets,” cabinet minister Piyush Goyal said. The scheme will help Indian companies to improve their competitive strength as compared to their global counterparts in terms of scale of output, productivity, value addition and their linkages with the global value chain.

Apart from supporting the manufacturing capabilities of processed food, the other key component of the scheme is to support branding and marketing to incentivise emergence of strong Indian brands in the foreign countries. For promotion of Indian brand abroad, the scheme envisages grant to the applicant entities for in store branding, shelf space renting and marketing.

Scheme will be implemented over a six-year period from till 2026-27. The implementation of the scheme would facilitate expansion of processing capacity to generate processed food output of Rs 33,494 crore.

Goyal said the ultimate beneficiary of the scheme will be the farmers as they would get better prices for their crops. He sought to link the benefits from developiong the food processing industry with the three farm laws that also gives a filip to this industry. “It will be a fitting tribute to our farmers. The annadaatas who worked through the pandemic and achieved growth, and helped country become self reliant. When the new farm laws were brought in, we were worried for increasing their income, create jobs, have increased investment in farm infrastructure. We have given options to farmers to sell in APMC mandis or outside where they get better prices,” Goyal said during the cabinet briefing.

Goyal said the scheme will help the fishtries sector and people in the coastal region. He named states like Kerala, Tamil Nadu, West Bengal—the three states where elections are currently underway—among others. The scheme has capacity to generate Rs 1 lakh crore worth of processed food in exports.

“There was a demand for Indian food products alone, be it Indian diaspora, or even when we travel abroad that we crave for local food. There are over two crore of Indian diaspora, and they have good spending capacity. We expect to take the exports of processed food to Rs 6 lakh crore,”Goyal said.

"There is a certain rate for our fruits and vegetables. But once they are processed, cleaned and packed, the rate goes up. It will help the farmers. The aim is to create international quality Indian branded food products to include ready to eat food, and millet-based food as demand for it is growing across the world," he added. 

For the implementation of the scheme at the national level, a project management agency will be set up which will be responsible for appraisal of applications, verification of eligibility for support, scrutiny of claims eligible for disbursement of incentive.

The scheme would be monitored at the Centre by the Empowered Group of Secretaries chaired by the Cabinet Secretary. The ministry of Food Processing Industries would approve selection of applicants for coverage under the scheme, sanction and release of funds as incentives. The ministry will prepare annual action plan covering various activities for implementation of the scheme. A third-party evaluation and mid-term review mechanism would be built in the programme.

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