Lok Sabha Question No. 146 (STARRED), answered on 2024-12-05
Subject: PLI Scheme for Food Processing Industries
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: Shri Dushyant Singh

## GOVERNMENT OF INDIA MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA

## STARRED QUESTION NO.*146

ANSWERED ON 05 TH  DECEMBER, 2024

## PLI SCHEME FOR FOOD PROCESSING INDUSTRIES

## *146.   SHRI DUSHYANT SINGH:

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

- (a) the details of the steps taken/being taken by the Government  to promote the Production Linked Incentive Scheme for Food Processing Industries (PLISFPI) in underdeveloped and rural areas along with the contribution of the scheme to the overall growth and development of the food processing sector in the country;
- (b)  whether  the  Government  support  Small  and  Medium  Enterprises  (SMEs)  in  the  food processing sector, particularly in terms of incentivizing capacity expansion and innovation and if so, the details thereof along with the impact on their growth and formalization;
- (c) the details of the specific incentives offered by the Government  to boost the manufacturing of food products in major segments, especially in the region of Jhalawar-Baran, Rajasthan and across the country; and
- (d)  the  details  of  the  measures  taken/being  taken  by  the  Government  to  enhance  the branding and  marketing  of  Indian  food  products  abroad  and  contribute  to  the  global competitiveness of Indian food brands?

## ANSWER

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

- (a) to (d).  A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  STARRED QUESTION NO. *146 FOR ANSWER ON 05 TH  DECEMBER, 2024 REGARDING 'PLI SCHEME FOR FOOD PROCESSING INDUSTRIES'

(a).  The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) was approved by the Union Cabinet on 31 st March 2021 with a budget of ₹10,900 crore, to be implemented from 2021-22 to 2026-27. A total of 171 applicants have been enrolled under the scheme.  The  beneficiary  selection  process  under  PLISFPI  was  conducted  as  a  one-time exercise, preceded by active stakeholder engagement and extensive publicity to ensure broad participation.

By  mandating  the  use  of  domestically  grown  agricultural  products  (excluding  additives, flavors, and edible oils) in the manufacturing process, the scheme has substantially increased local raw material procurement, benefiting underdeveloped and rural areas while supporting farmers'  incomes.  Furthermore,  the  emphasis  on  local  production  of  raw  materials  for processed  food  has  generated  additional  off-farm  employment  opportunities,  significantly contributing to the economic development of rural regions.

The scheme has significantly contributed to the country's overall growth and development by scaling up domestic  manufacturing,  enhancing  value  addition, boosting the  domestic production  of  raw  materials,  and  creating  employment  opportunities.  The  scheme  supports large companies, millet-based products, innovative and organic products, as well as small and medium enterprises, while also promoting Indian brands globally. According to data reported by  the  scheme's  beneficiaries,  an  investment  of  ₹  8,910  crore  has  been  made  across  213 locations. As of 31st October 2024, the scheme has reportedly generated employment of over 2.89 lakh.

(b).  Yes, the Government actively supports Small and Medium Enterprises (SMEs) in the food processing sector through schemes like Pradhan Mantri Kisan Sampada Yojana (PMKSY), Production  Linked  Incentive  Scheme  for  Food  Processing  Industries  (PLISFPI),  and  the Pradhan Mantri Formalization of Micro-food processing Enterprises (PMFME) scheme. These schemes provide financial,  technical,  and  marketing  support  to  SMEs,  facilitating  capacity expansion, innovation, and formalization. SMEs are also eligible to avail the benefits under various components of the PMKSY  Scheme. PMFME  scheme  specifically targets formalization  of  unorganized  units,  improving  their  access  to  institutional  credit,  modern infrastructure, and enhanced food processing capacity. Under the PLI scheme, a significant proportion  of  beneficiaries  are  MSMEs,  with  70  MSMEs  directly  enrolled  and  40  others contributing  as  contract  manufacturers  for  larger  companies.   Collectively,  these  initiatives have  strengthened  SMEs  by  fostering  innovation,  improving  competitiveness,  expanding market access, and generating employment opportunities, and supporting the broader value chain in the food processing industry.

(c).  The incentives offered under PMKSY, PMFME, and PLI scheme of the Ministry is at ANNEXURE . The above-mentioned schemes are demand driven and aspiring beneficiary is required to apply and qualify to avail the benefits of the schemes as per the Guidelines. The incentives  under  these  schemes  are  available  to  applicants,  including  those  from  JhalawarBaran region of Rajasthan, who meet the criteria outlined in the guidelines of each scheme.

(d).  Under the Production Linked Incentive Scheme for Food Processing Industries (PLISFPI), the  Government  provides  financial  incentives  to  promote  Indian  food  brands  abroad, supporting branding and marketing activities for Indian-branded consumer food products in global  markets.  Beneficiaries  are  reimbursed  50%  of  their  expenditure  on  branding  and marketing abroad,  capped  at  3%  of  their  annual  food  product  sales  or  ₹50  crore  per  year, whichever is lower. Applicants are required to spend a minimum of ₹5 crore over five years to qualify. Currently, there are currently 73 beneficiaries under this component of the PLI scheme.

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## ANNEXURE REFERRED TO IN REPLY TO PART (c) OF STARRED QUESTION NO. *146 FOR ANSWER ON 05 TH  DECEMBER, 2024 REGARDING 'PLI SCHEME FOR FOOD PROCESSING INDUSTRIES'

## Pattern of assistance under PMKSY Scheme:

- i. Integrated Cold Chain & Value Addition Infrastructure: Grant-in-aid will be @ 35% of eligible project cost for project in general area and @ 50% of eligible project cost for difficult area as well as for projects of SC/ST. FPOs and SHGs, subject to maximum of Rs. 10 crore per project.  Approved grants-in-aid released in three equal installments.
- ii. Creation of Infrastructure for Agro Processing Clusters : Scheme envisages grantsin-aid @35% of eligible project cost in general areas and @50% of eligible project cost in difficult areas, SC/ST, FPOs and SHGs subject to maximum of Rs.10.00 Crores. Approved grants-in-aid released in three equal installments.
- iii. Creation/  Expansion  of  Food  Processing  and  Preservation  Capacities: Scheme envisages grants-in-aid @35% of eligible project cost in general areas and @50% of eligible project cost in difficult areas, SC/ST, FPOs and SHGs subject to maximum of Rs.5.00 Crores. Approved grants-in-aid released in two equal installments.
- iv. Scheme  for  Food  Safety  &  Quality  Assurance  Infrastructure: For  Government Organizations, the grant is 100% and for private organizations 50% for general areas and 70% for difficult areas and SC/ST applicants.
- v. Scheme for Operation Greens: Grants-in-aid will be @35% of eligible project cost for projects in general areas and @50% of eligible project cost for projects in difficult areas as well as for projects of SC/ST, FPOs and SHGs. For Integrated Value Chain Development Projects, maximum grants-in-aid would be ₹15 crore per project; and for Standalone Post-Harvest Infrastructure Projects, maximum grants-in-aid would be ₹10 crore per project.
- vi. Scheme  for  Research  &  Development  in  Processed  Food  Sector: For  Govt. organisation, the grant is 100% of eligible project cost and for Private organisation, it is  50% of eligible project cost in  General  areas  and 70% of eligible project cost in difficult areas.

## Pattern of assistance under PLI scheme:

- i. The beneficiary should achieve minimum year on year sales growth of 10% for claiming incentive under Category-I, Category-II and Millet-Based Products components of the Scheme. Under Category -I component, the companies have to make committed investments to  increase  their  production  capacities.   If  a  company  does  not  make  the  committed investment upto end of 2023-24, it is not eligible to receive incentives under the Scheme.
- ii. Under Category-III, i.e., Branding and Marketing component, a company is eligible for financial incentives @ 50% of expenditure incurred on Branding & Marketing abroad

subject to a maximum of 3% of Sales of food products or Rs 50 crore per year, whichever is less.  The minimum expenditure should be Rs. 5 crore over a period of five years.

## Pattern of assistance under PMFME scheme:

The  details of financial assistance offered to the  enterprises  under  Pradhan  Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme are as under:

- i. Support  to  Individual  /  Group  Category  Micro  Enterprises:  Credit-linked  capital subsidy @35% of the eligible project cost, maximum ceiling Rs.10 lakh per unit;
- ii. Support to SHGs for seed capital: Seed capital @ Rs. 40,000/- per member of SHG engaged in food processing for working capital and purchase of small tools subject to maximum of Rs. 4 lakh per SHG Federation.
- iii. Support for Common Infrastructure: Credit linked capital subsidy @35% subject to maximum of Rs. 3 crore to support FPOs, SHGs, Cooperatives and any Government agency for setting up of common infrastructure. The common infrastructure will also be available for other units and public to utilize on hiring basis for substantial part of the capacity.
- iv. Branding  and  Marketing  Support:  Grant  upto  50%  for  Branding  and  Marketing  to groups of FPOs/ SHGs/ Cooperatives or an SPV of micro food processing enterprises.
- v. Capacity Building: The scheme envisages training for Entrepreneurship Development Skilling  (EDP+):  program  modified  to  meet  the  requirement  of  food  processing industry and product specific skilling.

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