The government on Wednesday approved a production-linked incentive (PLI) scheme for the food processing sector, entailing an outlay of Rs 10,900 crore. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the scheme which will help create 2.5 lakh jobs by 2026-27, boost exports and facilitate expansion of food processing capacity to generate processed food output worth Rs 33,494 crore. The incentive under the scheme would be paid for six years ending 2026-27. "The PLI for the food processing sector with Rs 10,900 crore-incentive has been approved. The decision is a fitting tribute to our farmers," Food Minister Piyush Goyal said while briefing the media about the cabinet decisions.
The effort is to take the country's food processing to a next level amid the rising global demand for Indian ready-to-eat foods, organic products, processed fruits and vegetables, marine products and mozzarella cheese, he said. The government said the objectives of the scheme are to support food manufacturing entities with stipulated minimum sales and that are willing to make minimum stipulated investment for expansion of processing capacity and branding abroad to incentivise emergence of strong Indian brands.
Information and Broadcasting Minister Prakash Javadekar, who was also present at the briefing, said that the government in the Budget had announced a PLI scheme for 12-13 sectors. Already, PLI has been announced for six sectors. "Today, PLI for the food processing industries has been approved," he added. According to the government, the first component under the scheme relates to incentivising manufacturing of four major food product segments: ready-to-cook/ready-to-eat foods, processed fruits and vegetables, marine products and mozzarella cheese.
Innovative and organic products of small-to-medium enterprise (SMEs), including eggs, poultry meat, egg products in these segments, are also covered under the first component. The second component relates to support for branding and marketing abroad to incentivise emergence of strong Indian brands.
Highlighting key features of the scheme, Food Processing Industries Secretary Pushpa Subrahmanyam said, "The government will issue an expression of interest (EoI) by the end of April."
The requirement for the respondents is to commit to a minimum sales and minimum level of investment to each segment and if they achieve both, then for the incremental sales, a percentage of that amount will be given as subsidy the following year, she said. The selected applicant will be required to undertake investment in plant and machinery in the first two years i.e. in 2021-22 and 2022-23. Investment made in 2020-21 fiscal also to be counted for meeting the mandated investment, the government said in a separate statement. The conditions of stipulated minimum sales and mandated investment will not be applicable for entities selected for making innovative/organic products, it said.
The scheme aims to support creation of global food manufacturing champions, strengthen select Indian brand of food products for global visibility and wider acceptance in the international markets besides increasing employment opportunities of off-farm jobs as well as ensuring remunerative prices of farm produce and higher income to farmers.
On implementation of the scheme, the government said it will be rolled out across the country and will be implemented through a project management agency (PMA). The scheme is "fund-limited" as the cost will be restricted to the approved amount. The maximum incentive payable to each beneficiary shall be fixed in advance at the time of approval of that beneficiary. The scheme would be monitored at the Centre by the Empowered Group of Secretaries, the statement added.