New Delhi: The production linked incentive for the food sector will boost India’s export of processed food by Rs 30,000 crore in the next six years, said Pushpa Subrahmanyam, Secretary in Ministry of Food Processing Industries, adding that it was a conservative estimate and the government expects the exports to be on the higher side.
In an exclusive interaction with ETV Bharat, the top officer said the production linked scheme will be rolled out by the end of next month and within three-four months, the government will be able to finalise the eligible companies.
Under the scheme, companies will be able to avail a total subsidy of Rs 10,900 crores over the next six years if they increase their sale or make new investment which will reduce the wastage of farm produce, particularly of fruits and vegetables.
The scheme is aimed at reducing the wastage of perishable commodities such as fruits and vegetables, milk and poultry products by developing the required infrastructure in the processed food sector.
The government also hopes to boost export of food products by establishing the country’s brand image in the global food market.
Thrust on ready-to-eat segment
“There will be an indicative allocation for all the four sectors, we could allocate more for the ready-to-eat segment, it could be up to 40%. Then we have fruits and vegetables, we have kept 35% that segment. Then we will allocate some money for Mozzarella cheese manufacturers,” said Pushpa Subrahmanyam, Secretary in the Ministry of Food Processing Industries.
Subrahmanyam said the government has made indicative allocation on the basis of market size and trends.
“It is not fixed, it depends on proposals, it could change also on the basis of proposals and growth of each segment,” she told ETV Bharat.
In response to a question by ETV Bharat, the top officer said a sizeable amount of this incentive will go to large companies as there is a need for sizeable investment to avail the scheme but small players will also be encouraged in certain segments.
"It will be mostly large industries due to our benchmarks for the investment requirements. But we have earmarked Rs 250 crore for the SME sector for innovative and organic products," said the top officer who spent nearly 8-9 months in formulating the Rs 10,900 crore production linked incentive (PLI) scheme for the food processing sector.
She, however, clarified that the amount of Rs 250 crore earmarked for the SME sector was only an indicative amount for small companies having a turnover of Rs 1 crore and it could change as per the feedback from the rollout of the scheme.
Big boost to food export
With the roll-out of the production linked scheme for the food processing sector, the government is hoping to scale up India’s export of processed food and create 2.5 lakh direct jobs across the country.
“Our estimate is that export will go up by Rs 30,000 crore in the next 6 years but many factors may enhance it,” said the top officer, adding that it was a modest estimate and the growth in the export could be even higher.
Food sector PLI to be rolled out in April
Pushpa Subrahmanyam says the scheme will be rolled out by the end of April and the government will seek applications from the interested companies.
She said the interested companies will have to give commitments to the government for the investment and growth rates as laid out in the scheme.
“We hope that by the end of July we will be able to sanction the projects. And they will get the subsidy in the following year based on their performance in FY 2021-22,” explained the top officer.
Preference to fresh investment
In response to a question, the food processing and industries secretary clarified that under the scheme, the preference will be given to those proposals which will commit new investment.
"They will have to commit to the minimum amount as laid out. It is Rs 100 crore in the ready-to-eat segment, Rs 75 crore for fruits and vegetables and about Rs 23 crore for mozzarella cheese," she said.
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