New Delhi: The Union Cabinet Wednesday approved the final contours of a Rs 10,900 crore Production-Linked Incentive (PLI) scheme for the food processing sector in the country, months after the initiative was first announced.
The PLI is aimed at incentivising domestic players, and making the industry globally competitive with the production of high-value, export-oriented items.
Food processing is one of the several sectors for which the Modi government announced PLIs last year, with an aim to push domestic industry under the banner of ‘Atmanirbhar Bharat’ and boost exports.
Addressing the media after the Cabinet meeting, Union Consumer Affairs, Food and Public Distribution Minister Piyush Goyal said PLIs for food processing are expected to directly generate 2.5 lakh jobs across the country.
The scheme will be implemented over a six-year period, from 2021-22 to 2026-27.
The first component relates to incentivising manufacturing in four major food product segments — ready to cook/ready to eat foods, processed fruits and vegetables, marine products, and mozzarella cheese. The scheme will also cover “innovative/organic products of SMEs (small and medium enterprises) including free range – eggs, poultry meat, egg products in these segments”.
“The PLI will be given as per the increase in incremental sales. We will issue an EOI (expression of interest) form by April-end wherein interested companies can respond to avail of this scheme,” said Pushpa Subrahmanyam, Secretary, Ministry of Food Processing Industries, who was also present at the briefing.
“These industries must commit to minimum investment and increase in sales in each segment. The selected applicant will be required to undertake investment in plant and machinery in the first two years, which will be 2021-22 and 2022-23. The investment made in 2020-21 will also be counted for meeting the mandated investment.”
The scheme envisages providing grants to applicants for in-store branding, shelf space renting and marketing abroad, with an intention to promote Indian brands overseas.
“We expect to double our current agriculture-based export from the country, which stands at Rs 23 lakh crore. This scheme would directly increase exports by Rs 30,000 crore-35,000 crore, with an overall target of achieving a Rs 1 lakh crore export increase in the food processing sector,” said Goyal.
“We are relying heavily on the 2-crore-strong Indian diaspora living overseas to augment our export.”
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‘To increase farmers’ income’
Among other things, the government has pitched the scheme as one that will benefit farmers.
The PLIs, Goyal said, were an extension of the government’s efforts to increase farmers’ incomes through better processing of agricultural produce and targeted foreign investment in the sector.
He described them as a “fitting tribute to farmers of the country because of whom India’s agricultural production is set to rise by 3-3.5 per cent in 2020-21 despite the Covid-19 pandemic”.
Subrahmanyam said the scheme will “extensively reduce farm wastage”. “With the emergence of more and more food processing units, the sourcing of raw materials from the farms will also increase, thereby reducing waste while also increasing the income and returns for farmers,” she added.
Edited by Sunanda Ranjan
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Tax holiday on agrobased industries.. no excise on agrobased products
There is a typo
Agri exports from India are 2.3 (2 point 3) lakh crore and not 23 lakh crore as you’ve mentioned