Centre extends PLI scheme to food processing sector, announces Rs 10,900 crore worth of benefits

File image: Union Minister Piyush Goyal

File image: Union Minister Piyush Goyal

The Union Cabinet on March 31 approved extension of the Production-Linked Incentive (PLI) scheme to the food processing sector. Rs 10,900 crore were approved as incentives for domestic manufacturing in the sector.

The PLI scheme is an effort to make the industry globally competitive and geared towards production of high value export oriented items. Before this, the government had announced benefits for six sectors. In February, the Centre had approved Rs 15,000 crore in incentives for domestic manufacturing of pharmaceuticals and Rs 7,350 crore for production of laptops, tablet computers, all-in-one personal computers and servers in the country.

“The move is a fitting tribute to our farmers who managed to expand our agriculture output, despite the year seeing a pandemic breaking out,” Union Minister Piyush Goyal said. Goyal said the move was an extension of the government’s efforts to increase farmers’ incomes through better processing of agricultural produce and targeted foreign investment in the sector.

The allocation has been made for the next six years and is expected to see employment generation of more than 2.5 lakh across the country, Goyal said. Therefore, the incentive under the scheme would be paid for six years ending 2026-27, with the incentive payable for a particular year will be due for payment in the following year.

Selected applicants will be required to undertake investment, as   quoted   in   their  Application subject to the prescribed minimum in Plant & Machinery in the first two years or  in 2021-22 & 2022-23. But the government has also allowed investment made in 2020-21 to be counted for meeting the mandated investment.

Also, the scheme will be “fund-limited” or, cost shall be restricted to the approved amount. The maximum incentive payable to each beneficiary shall be fixed in advance at the time of approval of that beneficiary.

“Indian produce, processed through state of the art machinery, maintaining hygiene and meeting international standards, will have immense demand across the world,” the minister of consumer affairs, food and public distribution added.

Items like millets, mozzarella cheese, marine products, organic products farmed by MSMEs such as poultry and meat have also been covered under the scheme. Ready to eat items have also been focussed upon.

Details announced

The government has announced the scheme shall be implemented through a Project Management Agency (PMA) and would be monitored at Centre by the Empowered Group of Secretaries chaired by the Cabinet Secretary.

However, the Food Processing Ministry would approve selection of applicants for coverage under the scheme, sanction and release of funds as incentives. It will also prepare Annual Action Plan covering various activities for implementation of the scheme.

A third party evaluation and mid-term review mechanism would be built in the program. Applicant enterprises can apply to participate in the scheme through a national level portal that soon be set-up, Food Processing Secretary Pushpa Subrahmanyam, said.