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Union Cabinet approves PLI Scheme for Food Processing Industry with an outlay of INR 10, 900 Crores

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Cabinet approves Production Linked Incentive Scheme for Food Processing IndustryOn March 31, 2021, the Union Cabinet chaired by Prime Minister Narendra Modi approved the Central Sector Scheme – ‘Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)’ with a total outlay of INR 10, 900 Crores.

  • The key objectives of the Scheme are – Creation of global food manufacturing champions & supporting Indian brands of food products in the International markets.
  • Duration – six-year period from 2021-22 to 2026-27.
  • Implementation – Rolled out on an All India basis, and will be implemented through Project Management Agency (PMA).
  • It will facilitate expansion of processing capacity to generate processed food output of INR 33, 494 crores.
  • It is expected to create employment for around 2.5 Lakh persons by 2026-27.

Objective 

  • To support creation of Global food manufacturing champions.
  • Strengthen select Indian brand of food products for global visibility and wider acceptance in International markets.
  • Increase employment opportunities of off-farm jobs.
  • Ensure remunerative prices of farm produce and higher income to farmers.

Components

The scheme has 2 major components –  Incentivising the manufacturing of 4 Major Food Products and Branding & Marketing of Indian Products Abroad.

Incentivising of Major Food Products

i.The scheme will incentivise the manufacturing of 4 Major Food Products. They are

  • Ready to Cook (RTC) / Read to Eat foods (RTE)
  • Processed Fruits & Vegetables
  • Marine Products
  • Mozzarella Cheese

ii.Under this component, Innovative/Organic products of Small & Medium-sized Enterprises (SMEs) including Free Range – Eggs, Poultry Meat, Egg products will be covered.

Branding & Marketing of Indian Products Abroad

  • It will provide support for Branding & Marketing of Indian Products Abroad.
  • Funding will be provided under the scheme for entities like – in store Branding, shelf space renting & marketing.

Plant & Machinery

  • The applicants selected for the scheme will be required to invest in plant and machinery in the first two years – 2021-22 and 2022-2023.

Implementation of the Scheme

  • The implementation will be monitored at the Centre by the Empowered Group of Secretaries chaired by Cabinet Secretary.
  • The Ministry of Food Processing Industries (MoFPI) will be responsible for selection of applicants for coverage under the scheme, sanction and release of funds as incentives.
  • It will prepare an Annual Action Plan for covering various activities for implementation of the scheme.
  • Third Party evaluation & mid-term review mechanisms will be built for monitoring the programme.

Incentive, Strategy and targets

  • The incentives for companies manufacturing the eligible products will be subject to a stipulated minimum investment in plant and machinery as well as incremental sales of the products.
  • Incentive will be paid for six years ending 2026-27.
  • It is fund-limited i.e cost shall be restricted to the approved amount.

National Portal & MIS

  • A National Level portal will be established wherein the applicant can apply for participation in the scheme. All the activities regarding the implementation of the scheme will be undertaken on a National Portal.

Parallel Framework

Apart from this scheme, the Government has initiated several measures to strengthen the food processing industry.

Pradhan Mantri Kisan Sampada Yojana (PMKSY)

  •  It is Implemented by MoFPI
  •  Under this scheme, SME food processing enterprises are supported in terms of Strengthening of supply chain infrastructure, expansion of processing capacities, augmenting availability of industrial plots, facilitating skill development, R&D, provision of testing facilities.
  • Schemes implemented by the other ministries like Ministry of Agriculture Cooperation & Farmers’ Welfare, Animal Husbandry, Fisheries, Commerce will also have a direct or indirect bearing on the growth of the food processing sector.

Background:

  • The food processing sector in India consists of manufacturing enterprises in all ranges (from Micro to Large industries).
  • Factors like resource endowment, large domestic market & scope for promotion of value added products indicate that Indian can succeed at the global stage in the food processing sector.
  • To compete at the global level, Indian companies need to improve their scale of output, productivity, value addition and their linkages with the global value chain.

Basis of the Scheme

  • PLI Scheme for Food Processing Industry has been formulated based on the PLI scheme of NITI Aayog under ‘Atma Nirbhar Bharat Abhiyaan for Enhancing India’s Manufacturing Capabilities and Enhancing Exports’.

Recent Related News:

i.On October 29, 2020, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers revised guidelines of PLI schemes for promotion of domestic manufacturing of bulk drugs and medical devices.

ii.February 25, 2021, The Union Cabinet approved the PLI Scheme with an outlay of Rs 15,000 crore for the pharmaceuticals and with Rs 7,350 crore for IT hardware.

About Ministry of Food Processing Industries (MoFPI):

Union Minister – Narendra Singh Tomar (Lok Sabha MP, Constituency – Morena, Madhya Pradesh)
Minister of State – Rameswar Teli (Lok Sabha MP, Constituency – Dibrugarh, Assam)