Cabinet approves Production Linked Incentive Scheme for Food Processing Industry

The Union Cabinet has approved the Central Sector Scheme – “Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)” to support creation of global food manufacturing champions commensurate with India’s natural resource endowment and support Indian brands of food products in the international markets with an outlay of Rs. 10900 cr.

Objectives of the Scheme –

The objectives of the Scheme are to support food manufacturing entities with stipulated minimum Sales and willing to make minimum stipulated investment for expansion of processing capacity and Branding abroad to incentivise emergence of strong Indian brands.

• Support creation of global food manufacturing champions;
• Strengthen select Indian brand of food products for global visibility and wider acceptance in the international markets;
• Increase employment opportunities of off-farm jobs,
• Ensuring remunerative prices of farm produce and higher income to farmers.

Salient features –

• The first component relates to incentivising manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) foods, Processed Fruits & Vegetables, Marine Products, Mozzarella Cheese.
• Innovative/ Organic products of SMEs including Free Range -Eggs, Poultry Meat, Egg Products in these segments are also covered under above component.
• The selected applicant will be required to undertake investment, as   quoted   in their Application (Subject to the prescribed minimum) in Plant & Machinery in the first two years i.e.  in 2021-22 & 2022-23.
• Investment made in 2020-21 also to be counted for meeting the mandated investment.
• The conditions of stipulated Minimum Sales and mandated investment will not be applicable for entities selected for making innovative/ organic products.
• The second component relates to support for branding and marketing abroad to incentivise emergence of strong Indian brands.
• For promotion of Indian Brand abroad, the scheme envisages grant to the applicant entities for – in store Branding, shelf space renting and marketing.
• Scheme will be implemented over a six year period from 2021-22 to 2026-27.

Impact including employment generation potential –

• The implementation of the scheme would facilitate expansion of processing capacity to generate processed food output of Rs 33,494 crore and;
• Create employment for nearly 2.5 lakh persons by the year 2026-27.

Background –

• The food processing sector in India encompasses manufacturing enterprises in all the segments from micro to large industries.
• India is having competitive advantage in terms of resource endowment, large domestic market and scope for promoting value added products.
• Achieving full potential of this sector would require Indian companies to improve their competitive strength vis-a-vis their global counterpart in term of scale of output, productivity, value addition and their linkages with the global value chain.
• The Production Linked Incentive Scheme for Food Processing Industry has been formulated based on the Production Linked incentive scheme of NITl Aayog under “AatmaNirbhar Bharat Abhiyaan for Enhancing India’s Manufacturing Capabilities and Enhancing Exports”.