Rs 10,900-crore budget for food processing schemes

Being implemented from 2021-22 to 2026-27

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food processing
The government schemes offer comprehensive support across the entire food processing value chain, aiding the food industry in meeting international quality and safety standards for their food products.

Union Minister of state for food processing industries Prahlad Singh Patel said the ministry is implementing the central schemes Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) and centrally sponsored PM Formalization of Micro Food Processing Enterprises (PMFME) Scheme to increase the level of food-processing industry and encouraging rural entrepreneurship across the country including rural areas.

The PLISFPI, which was approved by the Union Cabinet on 31 March 2021 with a budget of Rs. 10,900 crore, is being implemented from 2021-22 to 2026-27, Patel said in a written reply in the Lok Sabha.

The scheme consists of three components – incentives in manufacturing in four major food product segments, promoting innovative/organic products of SMEs, and supporting branding and marketing abroad for Indian brands, a PIB release said.

Additionally, the PLI Scheme for Millet-based Products (PLISMBP) was launched in FY 2022-23 with an outlay of ₹800 crore, utilizing savings from PLISFPI. The scheme is aimed at boosting the capacity of the food processing industry by supporting food manufacturing entities that are willing to expand their processing capacity, incentivizing the growth of strong Indian brands, enhancing the presence of Indian food brands in the global market, creating more employment opportunities, and ensuring higher income for farmers, the minister said.

The ministry is actively implementing the Pradhan Mantri Kisan Sampada Yojana, Pradhan Mantri Formalization of Micro Food Processing Enterprises scheme, and Production Linked Incentive Scheme to promote the food processing sector.

These schemes offer comprehensive support across the entire food processing value chain, aiding the food industry in meeting international quality and safety standards for their food products. One of the objectives of the R&D scheme under PMKSY is to promote research and development in the field of food quality and safety standards in the food processing sector, the minister said.

Through this scheme, financial support is provided through grant-in-aid, covering 50% of equipment costs in general areas and 70% in difficult areas. Under another component scheme of PMKSY, known as ‘Food Safety and Quality Assurance Infrastructure,’ financial assistance is provided to central/state government and private sector organizations/universities for the establishment and enhancement of food testing laboratories across the country. This initiative plays a crucial role in ensuring compliance with FSSAI regulations, which, in turn, facilitates the maintenance of high-quality and safety standards of processed food products to meet global demands.

The PMKSY addresses the infrastructure challenges being faced by SMEs and promotes technology adoption in the food processing sector. PMKSY supports the establishment of cold chains, and other processing facilities, which contribute to improving the supply chain and storage capabilities in the food processing sector. 1,281 projects have been approved under PMKSY.

The PMKSY provides significant support and incentives to food processing SMEs, encouraging their growth and development. Through financial assistance and other benefits, PMKSY facilitates the establishment of modern infrastructure/ technology, and capacity expansion for SMEs. This has led to increased processing levels, improved product quality, and enhanced market access for these SMEs. The Yojana has significantly boosted employment opportunities, particularly in rural areas, assisting in the generation of jobs for 13.09 lakh people, the government said.

The R&D Scheme under PMKSY aims to enhance production, including tech-based food processing innovation, quality, safety, and trade while promoting sustainability. The PLI Scheme for Food Processing Industry incentivizes MSMEs that focus on innovative products, boosting innovation in the food processing sector. Additionally, the PLI Scheme for Millet-based Products promotes millets, which are special grains that need fewer resources to grow, provide excellent nutrients, and can withstand changes in the weather, which helps in achieving the goal of sustainability.

To promote ‘Brand India’ globally, the PLI Scheme for Food Processing Industry supports companies with branding and marketing abroad, boosting the emergence of strong Indian brands. Companies receive 50% financial incentives for expenditure on international branding, capped at 3% of food product sales or ₹50 crore per year, whichever is less. Presently, 77 applications are covered under this PLI component, the minister said.

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