Lok Sabha Question No. 261 (UNSTARRED), answered on 2021-07-20
Subject: Growth of FPI Sector
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: S. Jagathrakshakan

## GOVERNMENTOF INDIA MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO. 261

ANSWERED ON 20 TH  JULY, 2021

## GROWTH OF FPI SECTOR

## 261. SHRI S. JAGATHRAKSHAKAN:

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

- (a) whether it is true that the inherent tastes of our multicultural society, propensity to consume fresh food and the traditional distrust of outside food and its quality have hampered growth in the food processing sector; and
- (b) if so, the details thereof along with the steps taken by the Government keeping in mind that increasing urbanization, rise in disposable income, availability of a greater variety of processed food, increasing demand from tier 2/3 cities, and the emergence of E-commerce will bring a change in food consumption patterns of the country and propel the food processing industry towards a growth trajectory leading to higher processing levels?

## ANSWER

## THE MINISTER OF STATE FOR FOOD PROCESSING INDUSTRIES (SHRI PRAHLAD SINGH PATEL)

- (a).  No, Sir. The Gross Value added (GVA) in the food processing sector has steadily increased over the years as indicated below:

(Rs. in lakh crore)

| Year    |   2014-15 |   2015-16 |   2016-17 |   2017-18 |   2018-19 |
|---------|-----------|-----------|-----------|-----------|-----------|
| GVA-FPI |      1.34 |      1.61 |      1.79 |      1.91 |      2.08 |

Source : National Account Statistics 2020

The Annual Average Growth Rate in the food processing sector during this period has been 10% compared to 8.3% & 3.1% in Manufacturing & Agriculture & allied sectors respectively.

- (b): The Government has taken a number of measures and implementing several schemes to ensure higher processing levels and augment the growth in FPI sector. These includes:
- (i)  Ministry  of  Food  Processing  Industries  (MoFPI)  is  implementing  a  Central  Sector  schemePRADHAN  MANTRI  KISAN  SAMPADA  YOJANA  (PMKSY)  for  overall  growth  and development  of  food  processing  sector  including  increasing  the  preservation  and  processing capacity. The scheme consists of a number of sub-schemes with the main objective to minimize the post-harvest losses and to increase the extent of processing and ensure higher realisation for the farmers.
- (ii)  As  part  of  the  Aatmanirbhar Bharat Initiative,  the Ministry  is also implementing a Centrally Sponsored Scheme-Prime Minister's Formalisation of Micro Food Processing Enterprises Scheme (PM FME) to upgrade and support 2 lakh micro food processing units through credit linked subsidy based on One District One Product (ODOP) approach.
- (iii) Recently Government has also announced a Production Linked Incentive (PLI) Scheme for the food processing sector to support creation of global food manufacturing champions and boosting domestic manufacturing and promoting exports.
- (iv) In addition, the Government has also undertaken various policy measures and reforms to support food processing sector as indicated below:
- 1) A  Special  Food  Processing  Fund  of  Rs.  2000  crore  was  set  up  with  NABARD  in November 2014 to provide affordable credit for investments in setting up Mega Food Parks (MFP) as well  as  processing  units  in  the  MFPs.  In  2019,  the  coverage  of  the  fund  was extended to setting up of Agro Processing Clusters and individual manufacturing units within them.
- 2) Inclusion of food & agro-based processing units and cold chain as agricultural activity under Priority Sector Lending (PSL) norms in April 2015.
- 3) As  a  measure  towards  improving  ease  of  doing  business,  the  FSSAI  through notifications  in  2016  has  shifted  from  product-by-product  approval  to  an  ingredient  and additive based approval process.
- 4) 100 per cent FDI under automatic route has been permitted for the food processing sector. 100% FDI under the government approval route has been allowed for retail trading, including E-commerce, in respect of food products manufactured/ produced in India.

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