Govt encourages private sector investment in food processing industries

The Government has been consistently encouraging and incentivizing increased private sector investment for the overall development of the food processing sector of the country to promote value addition in the agricultural and allied sector and reduce wastage.

Ministry of Food Processing Industries (MoFPI) is implementing a central sector umbrella scheme- Pradhan Mantri Kisan Sampada Yojana (PMKSY) since 2016-17 for overall growth and development of the food processing sector, mostly through private sector participation. Under the component schemes, MoFPI provides credit-linked financial assistance (capital subsidy) in grants-in-aid to entrepreneurs for setting up food processing or preservation industries with farm-level infrastructure like primary processing facilities, collection centers etc. So far, 792 projects out of a total of 818 projects have been approved for setting up food processing Industries by the private sector with approved Grants in Aid of Rs 5791.71 crore.

To further increase private sector participation in the sector, the Government has taken three major initiatives this year. Firstly, Government has approved the introduction of the "Production Linked Incentive scheme" for the food processing sector with an outlay of Rs 10,900 crore to support the creation of global food manufacturing champions and support Indian brands of food products in the international market.

Secondly, to extend incentives to the private micro food enterprises, Self Help Groups (SHGs), Farmer Producer Organizations (FPOs) and Cooperatives, spread all over the country, MoFPI is implementing centrally sponsored "PM Formalization of Micro food processing Enterprises Scheme." The scheme aims to provide financial, technical and business support for up-gradation or setting up two lakh micro food processing units based on the One District One Product (ODOP) approach in five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.

Thirdly, in the budget speech for 2021-2022, Government has announced expanding the scope of the "Operation Greens scheme" from Tomato, Onion and Potato (TOP) to 22 perishable products to boost value addition in agriculture and allied products and their exports.

This information was given by the Union Minister of State for Food Processing Industries Prahlad Singh Patel in a written reply in Loksabha on 20 July 2021.