CONTENTS 01

Credit & Capital

Formation

02
Strengthening
the Value Chain

03
Initiatives under
Atma Nirbhar
Bharat

04
Process
Harmonization
CREDIT & CAPITAL FORMATION

From a development perspec ve, governments and support agencies must ensure that the
financial systems in their countries are able to meet the financial demands arising from the
growth of modern agricultural and food value chains
-Interna onal Fund for Agriculture Development

Background
ã 70% increase in demand for food by 2050; requiring at least USD 80 billion investments annually
ã As per Annual Survey of Industries (2018-19), Food Processing sector accounted for 12.8% of
manufacturing output but availed only 5.5% of credit extended to the industry
ã Credit outstanding to the food and agro-processing sector under PSL norms registered a 15% CAGR
(during 2019-to 2021) amoun ng to ` 1.98 lakh crore in 2021

Ac on undertaken
Se ng up of Food Processing Fund (FPF)
• A Special Food Processing Fund of ` 2,000 Crore was set up with NABARD in November 2014 for
providing direct term loan at affordable rate of interest to designated food parks (DFP) and food
processing units in DFPs.
• The coverage of the credit facility under FPF was extended in 2019 to Agro-Processing Clusters and
individual manufacturing units within them
• Credit of ` 549.30 Cr has been sanc oned to Mega Food Parks, `82.09 Cr to Agro-Processing Clusters
and ` 149.63 Cr to food processing units
Agro-Processing included in Priority Sector Lending
• Loans for food and agro processing upto aggregate sanc on limit of ` 100 Cr per borrower classified
under agricultural ac vity for Priority Sector Lending (PSL) - RBI Guidelines dated 04/09/2020
• Loans to MSMEs engaged in “food and agro-processing” are eligible for classifica on under PSL
• As a result, bankers are willing to extend the fund to the sector despite its seasonal opera ons and
viability issues

100% FDI permi ed

• 100% FDI permi ed under automa c route in Food Processing Industries in 2016
• 100% FDI allowed through government-approval route for retail trading, including through
e-commerce, in respect of food products manufactured/ produced in India in 2016-17
• India maintains a trade surplus in agro-food products and volume for export is witnessing an
accelerated growth
• Total FDI inflow to the Food Processing sector since 2014 is USD 5151 Mn as compared to USD 5859
Mn during the period of 2000 - 2014

Income tax incen ve to the Food Processing sector

• 100% exemp on of Income Tax on profits and gains for new Food Processing Units for ini al
5 assessment years
• 100 % Income Tax exemp on from profit derived by FPC having annual turnover up to `100 Crore for
ac vi es such as post-harvest value addi on to agriculture for a period of 5 years from financial year
2018-19
STRENGTHENING THE VALUE CHAIN
The primary objec ve of the value system pla orm would be to strengthen market linkages of
farmers, alongside the development of market yards/alternate markets, cold chains, and food
processing units

- Commi ee on Doubling Farmers’ Income

Umbrella scheme of PM Kisan SAMPADA Yojana (PMKSY)

Background
ã According to a study in 2020-21, the es mated levels of processing for fruits and vegetables were
low at 4.5% and 2.7% respec vely
ã High-income losses incurred on certain products deemed as sensi ve because of their mass
consump on, such as onion, potato, and tomato
ã According to a study, a 1% increase in public infrastructure increases the output of food
manufacturing by 0.06% in the longer run

Ac on undertaken
• A central sector scheme PMKSY, was introduced in 2016-17 with an outlay of ` 6000 Crore which is
con nuing with an alloca on of ` 4600 Crore ll 2026
• It is a comprehensive program to create modern infrastructure with efficient supply chain
management from farm gate to retail outlet

Creation of Creation/Expansion
Infrastructure for of Food Processing
Agro-Processing & Preservation
Clusters Capacities

Food Safety and

Operation Quality Assurance
Greens Infrastructure
(FTL)

Integrated Human Resources

Cold Chain and and Institutions-
Value Addition Research &
Infrastructure Development

• It provides an ins tu onal mechanism for producers, processors, and retailers to work together to
build the supply chain
• It has resulted in substan al improvement in Food Processing & Value Chain infrastructure
The progress of components under PMKSY scheme :
Scheme Parameters Pre 2014 Post 2014 &
upto April 2022
Opera onal Projects 2 21
Farmers benefi ed 5757 53519
Mega Food
Investment Leveraged (` Cr) 116.18 1369.71
Park
Processing & Preserva on capacity created (LMT) 3.08 25.32
Employment generated 35660 630456
Opera onal Projects 37 222
Farmers benefi ed 353000 2120968
Cold Chain Investment Leveraged (` Cr) 563.18 4469.80
Processing & Preserva on capacity created (LMT) 1.77 116.95
Employment generated 22200 133200
Opera onal Projects 12
Farmers benefi ed 39650
Agro Scheme
Processing Investment Leveraged (` Cr) implemented 207.13
Cluster Processing & Preserva on capacity created (LMT) since 2017 4.07
Employment generated 10288
Opera onal Projects 139
Farmers benefi ed Scheme 9666
Unit Scheme Investment Leveraged (` Cr) implemented 1542.79
since 2017
Processing & Preserva on capacity created (LMT) 28
Employment generated 58186
Opera onal Projects 43
Backward Farmers benefi ed Scheme 361782
and implemented
Investment Leveraged (` Cr) 384.05
Forward since 2017
Linkages Processing & Preserva on capacity created (LMT) 6.42
Employment generated 24472
Approved Projects 6
Farmers benefi ed Scheme 33780
Opera on Total project cost (` Cr) implemented
363.30
Greens since 2018
Processing capacity (LMT) 3.34
Employment to be generated 10749

• Post 2014, 437 infrastructure projects has become opera onal leveraging private investment of
` 7973.48 crores and has resulted in crea on of processing & preserva on capacity of 180.76 LMT.
• These opera onal projects are expected to have generated employment for about 8,57,000 people
and benefi ed about 25,86,000 farmers.
Ini a ves under Atmanirbhar Bharat Abhiyaan
Both our path and des na on for the future are clear. AatmaNirbhar Bharat is our path and our
resolve. And it is not the resolve of any government, but of 130 crore countrymen.
In the past few years, we have taken every necessary step and have worked relentlessly
to make the environment posi ve.

-Prime Minister’s Address to the Na on on Atma Nirbhar Bharat

Mainstreaming Micro Food Processing Units: Launching of PMFME scheme

Background
ã The micro food processing sector faces several challenges including the lack of access to modern
technology and value addi on opportuni es
ã Farmers intending to enter the food processing domain are not entrepreneurial by birth and need
orienta on and hand holding to progress in the direc on of the industry demand
ã Covid pandemic shook the biggest systems including MSMEs, which are a source of livelihood for
millions of people in India

Ac on undertaken
• The first-ever scheme to upgrade and support the micro-units launched in June 2020 with an outlay
of ` 10,000 Crore for implementa on during 2020-21 to 2024-25
• The scheme expects to generate skilled and semi-skilled jobs at the local level
• Promote ‘Vocal for Local’ through value chain development of One District One Product (ODOP)
• Increased access to common services like food tes ng, storage facili es, and access to high-end
machinery, technologies, and incuba on services
• A seed capital amount of ` 173.08 Crore released for 56,346 SHG Members
• 75 Incuba on Centres with an outlay of ` 200.03 Crore approved
• 27,653 applica ons were submi ed out of which 3451 loans sanc oned
• 10 ODOP brands launched in addi on to Na onal Level e-ups with NAFED & TRIFED
TOP to TOTAL under Opera on Greens scheme
Background
ã Covid lockdown hit the growers of fruits and vegetables compelling distress sales and lower price
realiza on due to an increase in post-harvest losses
ã Transporta on of crops from surplus produc on cluster to consump on center was broken
ã Few project areas were declared containment zones during the lockdown, further aggrava ng
produc on and income losses

Ac on Undertaken
• Opera on Greens scheme extended to all no fied hor culture crops for 50% subsidy for
transporta on and or storage
• 21 Fruits and 20 Vegetables were no fied
• Direct claims for subsidy
3 78 claims approved
3 Benefi ed 16881 farmers
• Support through Kisan rails
3 50% freight subsidy for movement of all fruits and vegetables extended through Kisan Rail
3 Carried7.24 lakh MT perishables transported up to 28th February 2022
3 47,500 beneficiaries across India
3 Transporta on subsidy of ` 138.98 crore released by Indian railways ll 28th February 2022.
` 77.79 crore reimbursed to Indian railways by MOFPI
• Support to NAFED
3 50% subsidy to eligible en es for transporta on and/or storage of apples from J&K, issued on
27th November 2020

Produc on Linked Incen ve to the Sector

Background
ã Industry stakeholders have been asking for support to compensate for a higher cost of produc on
due to a lack of efficient supply chain infrastructure, higher cost of electricity, etc.
ã Fruc fying the target of a $5 trillion economy by 2025, there is a growing need to transform India into
a global hub for food processing by boos ng domes c manufacturing and a rac ng large
investments in the sector
ã Focus on promo ng India’s global food manufacturing champions commensurate with natural
resource endowment and promote innova ve/ organic food products

Ac on Undertaken
• The Produc on Linked Incen ve (PLI) scheme for the Food Processing sector approved in
March 2021 with a financial outlay of `10,900 Crore for six years
• The first component of the Scheme relates to incen vizing the manufacturing of four major food
product segments:

Ready-to-Eat/ Mozzarella
Ready-to-Cook Cheese

Processed
Marine fruits and
Products vegetables

• The second component relates to the produc on of Innova ve/ Organic products for SMEs including
Free Range - Eggs, Poultry Meat, and Egg Products in the above four product segments
• The third component relates to support for branding and marke ng abroad to incen vize the
emergence of strong Indian brands for in-store Branding, shelf space ren ng and marke ng
• A total of 56 applica ons under Category-I, 13 applica ons under Category-II and 80 applica ons
under Category-III are now covered under the Scheme

• Expected to achieve
3 Processed food output of over ` 33,000 Crore
3 Employment of 2.5 lakh persons by 2026-27

• Further, in the wake of celebra ng the Interna onal Year of Millets 2023, the Ministry is in the
process of invi ng a proposal for Millet based products.
PROCESS HARMONIZATION
Globally recognized standards enable trade, by making it more transparent, and efficient, and
allowing the smooth flow of food products between markets

-Food & Agriculture Organiza on (FAO)

Background
ã Due to diverse subsectors and complicated stakeholder rela onships, food processing is more
complicated than most sectors
ã A well-cra ed investment policy can enhance its a rac veness by providing a transparent and a
predictable legal and regulatory framework
ã FDI in agribusiness is seen as a poten ally transforma ve force for developing countries

Ac on Undertaken
Investment Facilita on
• An investor facilita on portal, Nivesh Bandhu, launched in November 2017
• Portal facilitates poten al investors in making informed investment decisions
• Informa on on Central and State Governments' investor-friendly policies and compara ve analysis
of incen ves offered by the various states available on portal
• Invest India acts as the dedicated Investor Facilita on Cell to facilitate all investment interests
received in the food processing sector. Investment targe ng and facilita on desk (ITFD) handholds
investors throughout the investment phases in a structured manner such as:
3 Providing relevant sectoral & sub-sectoral informa on
3 Assists with regulatory requirements
3 Loca on assessment
• ITFD is also engaged with other ac vi es for the Ministry such as assistance for the COVID Grievance
Cell, Project Development Cell and other key ac vi es related to policy formula on

Transparent Decision making

• An online scheme management system, the SAMPADA portal, implemented for all the schemes
under PMKSY
• Automates and captures end-to-end workflow of project sanc on and implementa on including the
filing of the applica on, evalua on of the proposal, release of grants, progress of projects, etc.
• Dashboard implemented for MIS purposes and to facilitate real- me monitoring of progress and key
performance indicators
FSSAI reforms in Ease of Doing Business
Background
ã All new products or a minor varia on of a standard product requires FSSAI clearance causing delays
in the introduc on of new products and product innova on
ã Industry Players highlighted the above issue as a major impediment to investment in the food
processing sector
ã Ministry took up the issue on behalf of the food processors

Ac on Undertaken
• Ingredient and addi ve based approvals were put in place instead of product-by-product approval
(FSSAI no fica on dated Jan 2016 and Oct 2016)
• Businesses were exempted from regulatory approval for each product