Lok Sabha Question No. 63 (STARRED), answered on 2017-02-07
Subject: Cold Storages
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: OM PRAKASH YADAV

## GOVERNMENT OF INDIA

## MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA

## STARRED QUESTION NO. 63

ANSWERED ON 07 th  FEBRUARY 2017

## COLD STORAGES

## *63. SHRI OM PRAKASH YADAV

Will the Minister of FOOD PROCESSING INDUSTRIES be pleased to state:

- (a) the number of cold chain units/cold storages set up in collaboration with public-private partnership in the country during the last three years and the current year, State-wise;
- (b) the  problems  being  faced  by  the  entrepreneurs  and  stakeholders  of  food  processing industries and the steps taken to solve these problems/issues; and
- (c) whether  the  Government  has  conducted  any  survey  to  identify  the  places/regions  for setting up of cold chain/food chain in various parts of the country in future and if so, the details thereof and the follow up action taken thereon?

## ANSWER

MINISTER OF STATE FOR FOOD PROCESSING INDUSTRIES (SADHVI NIRANJAN JYOTI)

(a) to (c): A Statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PART  (a)  to  (c)  OF  LOK  SABHA STARRED QUESTION NO. *63  FOR  ANSWER  ON  07.02.2017  REGARDING  COLD STORAGES.

(a) The Government has formulated the Viability Gap Funding (VGF) scheme for financial support  to  Public  Private  Partnership  (PPP)  in  Infrastructure  including  cold  chains  and  postharvest storage. Under PPP mode, no cold chain/cold storage project has been set up in last 3 years and current year.

However, in order to arrest post-harvest losses of horticulture and non-horticulture produce, and to provide integrated cold chain and preservation infrastructure facilities from the farm gate to the consumer or from the production site to the market, Ministry of Food Processing Industries is implementing  the  Central  Sector  Scheme  for  Integrated  Cold  Chain  and  Value  Addition Infrastructure. The scheme is primarily private sector driven wherein financial assistance in the form of grant-in-aid upto maximum of Rs. 10 crore per project is provided for setting up the cold chain infrastructure  in  the  country.  Details  of  projects  assisted  by  MoFPI  for  last  3  years  and current year is as per Annexure-I

(b) On  the  basis  of  experience  in  implementation  of  the  schemes  of  this  Ministry  and interaction with the various stakeholders, the major problems being faced by the food processing industries sector have been identified as below:

- i. Availability of affordable credit from the Banks/Financial Institutions for the projects in the sector.
- ii. Delay in statutory clearances from the State Government /Agencies, namely, Change in land use, consent to establish and operate from respective State Pollution Control Board, power connection, water connection etc.
- iii. Availability of raw material suitable for processing purposes, etc.

In order to promote the food processing sector including availability of credit, Government has taken various measures as detailed in Annexure-II.

The  Ministry  reviews  and  monitors  the  progress  of  implementation  of  various  schemes  and follows up issues with the State Governments/ concerned agencies to resolve issues affecting implementation.

Further,  in  order  to  strengthen  backward  linkages  so  as  to  ensure  suitable  raw  material  for processing units, better price realization for farmers and to reduce post-harvest losses, creation of  farm  level  infrastructure  has  been  made  mandatory  under  the  Scheme  for  Integrated  Cold Chain and Value Addition Infrastructure.

- (d) Yes, Madam. A study was undertaken by the Ministry of Agriculture and Farmers Welfare in 2015  to  assess  the  requirement  for  cold  chain  infrastructure  in  the  country.  The  study  was primarily based on requirement of fruits and vegetables. As per the study  report, State  wise breakup of cold chain infrastructure required is at Annexure-III. Keeping in view the findings of the study report and stakeholder consultation, the operational guidelines for the Scheme for Integrated Cold Chain and Value Addition Infrastructure have been revised with effect from 29.08.2016. In the revised guidelines, weightage has been given in the evaluation criteria to proposals in uncovered areas having abundant raw material availability and lacking cold chain infrastructure.

## STATE-WISE DETAILS OF COLD CHAIN PROJECTS SANCTIONED BY MINISTRY OF  FOOD  PROCESSING  INDUSTRIES  DURING  THE  LAST  THREE  YEARS  AND CURRENT YEAR

| State                          | 2013-14   | 2014-15   | 2015-16   | 2016-17 (till date)   | Total No. of Projects sanctioned   |
|--------------------------------|-----------|-----------|-----------|-----------------------|------------------------------------|
| State                          | Nos.      | Nos.      | Nos.      | Nos.                  | Nos.                               |
| Andhra Pradesh                 | 0         | 0         | 1         | 0                     | 1                                  |
| Assam                          | 1         | 0         | 0         | 0                     | 1                                  |
| Bihar                          | 0         | 0         | 1         | 0                     | 1                                  |
| Chhattisgarh                   | 0         | 0         | 0         | 0                     | 0                                  |
| Gujarat                        | 4         | 0         | 1         | 0                     | 5                                  |
| Haryana                        | 1         | 0         | 4         | 0                     | 5                                  |
| Himachal Pradesh               | 5         | 0         | 0         | 1                     | 6                                  |
| Jammu &Kashmir                 | 3         | 0         | 1         | 0                     | 4                                  |
| Karnataka                      | 2         | 0         | 0         | 0                     | 2                                  |
| Kerala                         | 0         | 0         | 0         | 0                     | 0                                  |
| Madhya Pradesh                 | 2         | 0         | 1         |                       | 3                                  |
| Maharashtra                    | 15        | 0         | 2         | 2                     | 19                                 |
| Manipur                        | 0         | 0         | 0         | 0                     | 0                                  |
| Mizoram                        | 0         | 0         | 0         | 0                     | 0                                  |
| Odisha                         | 1         | 0         | 0         | 0                     | 1                                  |
| Punjab                         | 4         | 0         | 3         | 0                     | 7                                  |
| Rajasthan                      | 2         | 0         | 1         | 0                     | 3                                  |
| Tamil Nadu                     | 0         | 0         | 1         | 0                     | 1                                  |
| Telangana                      | 1         | 0         | 0         | 0                     | 1                                  |
| Uttar Pradesh                  | 3         | 0         | 3         | 0                     | 6                                  |
| Uttarakhand                    | 7         | 0         | 5         | 1                     | 13                                 |
| West Bengal                    | 0         | 0         | 2         | 0                     | 2                                  |
| Total No. of Projects Approved | 51        | 0         | 26        | 4                     | 81                                 |

Note: - Total Cold Chain projects sanctioned by the Ministry since 2008-09 is 135, of which 81 have been sanctioned since 2013-14

## DETAILS  OF  VARIOUS  MEASURES  TAKEN  BY  THE  GOVERNMENT  TO PROMOTE FOOD PROCESSING SECTOR

- i. Loans to food & agro-based processing units and Cold Chain have been classified under Agriculture activities for Priority Sector Lending (PSL) as per the revised RBI Guidelines issued on 23/04/2015.
- ii. In the Budget 2014-15, a special fund of Rs. 2,000 crore has been created with NABARD to  provide  affordable  credit  to  designated  Food  Parks  and  food  processing  units  to  be setup in these parks.
- iii. Refrigeration machineries and parts used for installation of  cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat are exempted from Excise Duty.
- iv. Construction, erection, commissioning or installation of original works pertaining to postharvest  storage  infrastructure  for  agricultural  produce  including  cold  storages  for  such purposes are exempted from Service Tax.
- v. Government has extended Project Import benefits to cold storage, cold room (including for farm level pre-cooling) or industrial projects for preservation, storage or processing of agricultural,  apiary,  horticultural,  dairy,  poultry,  aquatic  and  marine  produce  and  meat. Consequently,  all  goods  related  to  Food  Processing,  imported  as  part  of  the  project, irrespective  of  their  tariff  classification,  would  be  entitled  to  uniform  assessment  at concessional basic customs duty of 5%.
- vi. Under Section 80(1B) (11A) of the Income Tax Act, 1961, 100 percent tax exemption is available for the first five years of operation and after that, at the rate of 25 per cent (30 per  cent  in  case  of  a  company)  for  next  five  years  for  new  units  in  the  business  of processing, preservation and packaging of fruits or vegetables, meat and meat products, poultry, marine or dairy products.
- vii. Under Section 35-AD of the Income tax Act 1961, deduction to the extent of 100 per cent is allowed for expenditure incurred on investment for (i) setting up and operating a cold chain  facility;  and  (ii) setting  up  and  operating  warehousing  facility  for  storage  of agricultural produce.
- viii. Services  of  pre-conditioning,  pre-cooling,  ripening,  waxing,  retail  packing,  labeling  of fruits and vegetables have been exempted from Service Tax in Budget 2015-16.
- ix. Foreign Direct Investment (FDI) is permissible in food processing sector up to 100 per cent on automatic route.

In 2016, Department of Industrial Policy and Promotion (DIPP) vide press note No. 5 allowed 100 per cent FDI under Government approval route for trading, including through e-commerce, in respect of food products manufactured and / or produced in India.

## ALL INDIA COLD-CHAIN INFRASTRUCTURE CAPACITY (ASSESSMENT OF STATUS & GAP) CONDUCTED BY NATIONAL CENTRE FOR COLD CHAIN DEVELOPMENT

State - Wise breakup of cold - chain infrastructure requirement

| State             | Urban Population (2014-15)   | %share population   |   Pack- house (No.) | CS Bulk* (MT)   |   CS Hub** (MT) | Onion Storage (MT)   |   Ripening Chamber (MT) |
|-------------------|------------------------------|---------------------|---------------------|-----------------|-----------------|----------------------|-------------------------|
| Andhra Pradesh    | 18428602                     | 4.46                |                3124 | 489195          |           41730 | 551273               |                    4070 |
| Arunachal         | 354419                       | 0.09                |                  60 | 6705            |             803 | -                    |                      78 |
| Assam             | 4774459                      | 1.15                |                 809 | 61185           |           10811 | -                    |                    1054 |
| Bihar             | 13008947                     | 3.15                |                2205 | 5094524         |           29458 | 155936               |                    2873 |
| Chhattisgarh      | 6670958                      | 1.61                |                1131 | 498724          |           15106 | -                    |                    1473 |
| Delhi             | 17718674                     | 4.29                |                3003 | -               |           40122 | -                    |                    3913 |
| Goa               | 1002786                      | 0.24                |                 170 | -               |            2271 | -                    |                     221 |
| Gujarat           | 28523771                     | 6.90                |                4835 | 2174886         |           64590 | 305066               |                    6299 |
| Haryana           | 9998498                      | 2.42                |                1695 | 217754          |           22641 | 305686               |                    2208 |
| HP                | 722662                       | 0.17                |                 122 | 304511          |            1636 | -                    |                     160 |
| J&K               | 3807726                      | 0.92                |                 645 | 899220          |            8622 | -                    |                     841 |
| Jharkhand         | 8710072                      | 2.11                |                1476 | 5228            |           19723 | -                    |                    1923 |
| Karnataka         | 25886395                     | 6.26                |                4388 | 151695          |           58618 | 809817               |                    5717 |
| Kerala            | 19831340                     | 4.80                |                3361 | 968             |           44906 | -                    |                    4379 |
| MP                | 21658925                     | 5.24                |                3671 | 1818134         |           49045 | 1130550              |                    4783 |
| Maharashtra       | 54543414                     | 13.19               |                9245 | 34200           |          123509 | 3063522              |                   12045 |
| Manipur           | 943761                       | 0.23                |                 160 | 2925            |            2137 | -                    |                     208 |
| Meghalaya         | 651738                       | 0.16                |                 110 | 17228           |            1476 | -                    |                     144 |
| Mizoram           | 623469                       | 0.15                |                 106 | 7508            |            1412 | -                    |                     138 |
| Nagaland          | 676818                       | 0.16                |                 115 | 7142            |            1533 | -                    |                     149 |
| Odisha            | 7583316                      | 1.83                |                1285 | 288328          |           17172 | -                    |                    1675 |
| Punjab            | 11227754                     | 2.72                |                1903 | 1667984         |           25424 | -                    |                    2479 |
| Rajasthan         | 18558887                     | 4.49                |                3146 | 11370           |           42025 | 337343               |                    4098 |
| Sikkim            | 210234                       | 0.05                |                  36 | 2145            |             476 | -                    |                      46 |
| Tamil Nadu        | 37817826                     | 9.15                |                6410 | 109005          |           85635 | -                    |                    8351 |
| Telangana         | 12806317                     | 3.10                |                2171 | 248130          |           28999 | 442517               |                    2828 |
| Tripura           | 1161198                      | 0.28                |                 197 | 5925            |            2629 | -                    |                     256 |
| Uttar Pradesh     | 48414644                     | 11.71               |                8206 | 10565506        |          109631 | 72945                |                   10691 |
| Uttarakhand       | 3410752                      | 0.82                |                 578 | 65208           |            7723 | 273893               |                     753 |
| West Bengal       | 31729218                     | 7.67                |                5378 | 9409081         |           71848 | -                    |                    7007 |
| UT& Others        |                              |                     |                 340 | -               |            4539 | -                    |                     443 |
| All - India Urban | 413461936                    |                     |               70080 | 34164411        |          936251 | 7448545              |                   91306 |

- -All Figures in MT indicate size in metric tonnes.
- -It may be noted that this gap is assessed solely on current consumption patterns of the urban population in the country.

The size for storage of onion at farm-gate is not considered under cold stores (bulk).