Lok Sabha Question No. 675 (UNSTARRED), answered on 2026-02-03
Subject: Industries based on by-products of Agricultural Crops
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Shri Virendra Singh

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA UNSTARRED QUESTION NO. 675

TO BE ANSWERED ON THE 3 RD  FEBRUARY, 2026

## INDUSTRIES BASED ON BY-PRODUCTS OF AGRICULTURAL CROPS

†675. SHRI VIRENDRA SINGH:

Will the Minister of AGRICULTURE AND FARMERS क ृ िष एवं िकसान कʞाण मंũी be pleased to state:

(a) whether the Government has any plans for setting up industries based on by-products generated from agricultural crops;

(b)  if  so,  whether  the  Government  is  considering  setting  up  a  cooperative  sugar  mill  in Chandauli district  of  Uttar  Pradesh,  which  is  an  agriculture-dominated  area  and  if  so,  the timeline for the same; and

(c) whether the Government has any scheme for providing exemptions or subsidies for setting up  industries  based  on  such  agricultural  by-products  and  if  so,  the  percentage  of  such support?

## ANSWER

## THE MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण राǛ मंũी (SHRI RAMNATH THAKUR)

(a): Government has initiated various steps for setting up industries to utilize by-products generated from agricultural crops. Government provides one-time financial support under the Environment  Protection  Charge  (EPC)  funds  for  the  establishment  of  pelletization  and torrefaction plants to promote the utilization of paddy straw. For pelletization plants, financial assistance is available at the rate of ₹14 lakh per ton of production capacity per hour, subject to a maximum support of ₹1.4 crore per proposal. For torrefaction plants, financial assistance is  provided  at  the  rate  of  ₹28  lakh  per  ton  of  production  capacity  per  hour,  with  the  total financial support also capped at ₹1.4 crore per proposal.

Ministry of New & Renewable Energy is implementing Biomass Programme scheme which provides financial support for the manufacturing of briquettes and pellets, as well as for biomass-based energy  generation.  For  briquette  and  pellet  manufacturing  plants,  Central Financial  Assistance  (CFA)  of  ₹9  lakh  per  MTPH  (metric  ton  per  hour)  plant  capacity  is available, subject to a maximum of ₹45 lakh per plant. For non-torrefied pellet manufacturing plants, CFA is provided at ₹21 lakh per MTPH production capacity or 30% of the eligible capital cost of plant and machinery for a 1 MTPH plant, whichever is lower, with a maximum support of ₹105 lakh per project. For torrefied pellet manufacturing plants, CFA is ₹42 lakh per MTPH production capacity or 30% of the eligible capital cost of plant and machinery for a 1  MTPH  plant,  whichever  is  lower,  capped  at  ₹210  lakh  per  project.  Under  the  Biomass Programme, biomass-based (non-bagasse) cogeneration plants are supported with CFA of ₹40 lakh per MW, up to a maximum of ₹5 crore per plant. Additionally, under the Waste to Energy Programme, establishment of Compressed Biogas (CBG) plants is supported with CFA of ₹4 crore for every 4,800 kg of CBG generated per day from 12,000 cubic meters of biogas, subject to a maximum allocation of ₹10 crore per project for new projects.

Ministry  of  Petroleum  and  Natural  Gas  has  introduced  a  scheme  viz.  Sustainable Alternative  Towards  Affordable  Transportation  (SATAT)  to  provide  financial  assistance  to Compressed Biogas (CBG) producers for the procurement of biomass aggregation equipment and machinery, under which assistance is available up to 50% of the equipment cost or ₹90 lakh,  whichever  is  lower.  Additionally,  under  the  Pradhan  Mantri  JI-VAN  Yojana,  financial assistance  is  provided  to  bioethanol  projects  using  lignocellulosic  biomass  and  other renewable  feedstocks;  for  commercial  projects,  viability  gap  funding  is  offered  to  make projects financially viable, subject to a maximum of 20% of the project cost or ₹5 crore for every 10 lakh litres added to the biorefinery's annual nameplate capacity, whichever is lower, with the total financial support per project capped at ₹150 crore.

Besides,  in  order  to  promote  and  ensure  overall  development  of  Food  Processing Industries,  Ministry  of  Food  Processing  Industries  has  been  incentivizing  setting  up/ expansion  of  related  infrastructure  through  its  Central  Sector  schemes  namely  Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) Scheme, Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) and Centrally Sponsored-Pradhan Mantri Formalization of  Micro  Food  Processing  Enterprises  (PMFME)  Scheme  across  the  country.  Incentives available under PMKSY, PLISFPI and PMFME alongwith assistance available to Micro Food Processing Enterprises under PMFME Scheme are Annexed .

(b) & (c): The Central Government does not set up sugar mill in any part of the country. Further, sugar industry was deleted from list of industries required compulsory licensing, vide press note dated 31.08.1998. After that any entrepreneur is free to set up sugar mill in any part of the country as per provisions laid down in clause 6A to 6E of Sugarcane (Control), Order as amended.

However, the Government in order to achieve the blending targets mandated under Ethanol  blended  with  Petrol  (EBP)  Programme  has  notified  various  ethanol  interest subvention schemes for sugar mills/distilleries from 2018 to  2022  to  set  up  new ethanol plants/capacity expansion of existing ethanol plants based on sugarcane; its by-products such  as  B-heavy  molasses  &  C-heavy  molasses  and  grain  based  feedstock  across  the country.

Further,  the  Government  has  also  notified  a  new  scheme  for  Cooperative  Sugar Mills(CSMs)  on  06.03.2025  for  conversion  of  their  existing  ethanol  plants  based  on sugarcane; its by-products such as B-heavy molasses & C-heavy molasses into multi-feed based 1G ethanol plants to use grains like Maize and Damaged Food Grains (DFG).

## Incentives available under Pradhan Mantri Kisan Samapada Yojana (PMKSY)

|   Sl. No. | Component Scheme                                                 | Scheme Benefits (Grant-in-aid) for projects in General Area                                                                                                                                                                                                           | Scheme Benefits (Grant-in-aid) for projects in Difficult Areas as well as SC/ST, FPOs, SHGs                                                                                                                                                                           |
|-----------|------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         1 | Integrated Cold Chain and Value Addition Infrastructure          | Grant-in-aid @ 35% of eligible project cost [Subject to maximum of Rs. 10 crores per project]                                                                                                                                                                         | Grant-in-aid @ 50% of eligible project cost [Subject to maximum of Rs. 10 crores per project]                                                                                                                                                                         |
|         2 | Creation/ Expansion of Food Processing & Preservation Capacities | Grant-in-aid @ 35% of eligible project cost [Subject to maximum of Rs. 5 crores per project]                                                                                                                                                                          | Grant-in-aid @ 50% of eligible project cost [Subject to maximum of Rs. 5 crores per project]                                                                                                                                                                          |
|         3 | Infrastructure for Agro- Processing Clusters                     | Grant-in-aid @ 35% of eligible project cost in General Area [subject to maximum of Rs. 10 crores per project]                                                                                                                                                         | Grant-in-aid @ 50% of eligible project cost [Subject to maximum of Rs. 10 crores per project]                                                                                                                                                                         |
|         4 | Operation Greens                                                 | Grant-in-aid @ 35% of eligible project cost for Integrated Value Chain Development Projects, maximum grants-in-aid would be Rs.15 crore per project; and for Standalone Post-harvest Infrastructure Projects, maximum grants-in-aid would be Rs.10 crore per project. | Grant-in-aid @ 50% of eligible project cost for Integrated Value Chain Development Projects, maximum grants-in-aid would be Rs.15 crore per project; and for Standalone Post-harvest Infrastructure Projects, maximum grants-in-aid would be Rs.10 crore per project. |
|         5 | Food Safety and Quality Assurance- Food Testing Laboratories     | For Private Organization/entities: grant-in-aid @ 50% of eligible project cost [Subject to maximum of Rs. 5 crores per project]                                                                                                                                       | For Private Organization/entities: grant-in-aid @ 70% of eligible project cost [Subject to maximum of Rs. 5 crores per project]                                                                                                                                       |
|         6 | Human Resource & institution- Research & Development             | For Government Organization- Grants @100% of equipment cost, Consumables, for private organizations/Universities/Institutio ns, grant @50%of equipment cost.                                                                                                          | For Government Organization- Grants @100% of equipment cost, Consumables, for private organizations/Universities/Institutio ns, Grants @ 70% of equipment cost.                                                                                                       |

## Incentives available under Production Linked Incentive Scheme for Food Processing Industry (PLIS-FPI)

| Category/ Segments   | Segment                    | Incentive Disbursement criteria (5)                                         | Incentive Disbursement criteria (5)   | Upper cap (% & Amount in crore)   | Rate of Incentives (%)   | Rate of Incentives (%)                                                                                                                                  | Rate of Incentives (%)                                                                                                                                  | Rate of Incentives (%)                                                                                                                                  | Rate of Incentives (%)                                                                                                                                  | Rate of Incentives (%)                                                                                                                                  |
|----------------------|----------------------------|-----------------------------------------------------------------------------|---------------------------------------|-----------------------------------|--------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| Category/ Segments   | Segment                    | Min. CAGR                                                                   | Max. CAGR                             |                                   | 2021- 22                 | 2022- 23                                                                                                                                                | 2023- 24                                                                                                                                                | 2024- 25                                                                                                                                                | 2025- 26                                                                                                                                                | 2026- 27                                                                                                                                                |
| Cat.1                |                            |                                                                             |                                       |                                   |                          |                                                                                                                                                         |                                                                                                                                                         |                                                                                                                                                         |                                                                                                                                                         |                                                                                                                                                         |
| RTE/RTC              | Biscuits                   | 10%                                                                         | 13%                                   | 8% Rs. 334.48                     | 5%                       | 5%                                                                                                                                                      | 5%                                                                                                                                                      | 5%                                                                                                                                                      | 4.5%                                                                                                                                                    | 4%                                                                                                                                                      |
| RTE/RTC              | Non- Biscuits              | 10%                                                                         | 13%                                   | 8% Rs. 334.48                     | 7.5%                     | 7.5%                                                                                                                                                    | 7.5%                                                                                                                                                    | 7.5%                                                                                                                                                    | 6.75%                                                                                                                                                   | 6%                                                                                                                                                      |
| F&V                  | Spices                     | 10%                                                                         | 12%                                   | 8% Rs. 286.56                     | 5%                       | 5%                                                                                                                                                      | 5%                                                                                                                                                      | 5%                                                                                                                                                      | 4.5%                                                                                                                                                    | 4%                                                                                                                                                      |
| F&V                  | Non- Spices                | 10%                                                                         | 15%                                   | 8% Rs. 286.56                     | 10%                      | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 9%                                                                                                                                                      | 8%                                                                                                                                                      |
| Marine               | Marine products            | 5%                                                                          | 10%                                   | 8% Rs. 79.44                      | 6%                       | 6%                                                                                                                                                      | 6%                                                                                                                                                      | 6%                                                                                                                                                      | 5%                                                                                                                                                      | 4%                                                                                                                                                      |
| Marine               | Value added products       | 5%                                                                          | 10%                                   | 8% Rs. 79.44                      | 10%                      | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 10%                                                                                                                                                     |
| Mozzarella Cheese    |                            | 15%                                                                         | 16%                                   | 25% Rs. 70.75                     | 10%                      | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 8%                                                                                                                                                      | 6%                                                                                                                                                      | 4%                                                                                                                                                      |
| Millet Products      | Large Entry                | 10%                                                                         | -                                     | Rs. 100                           | -                        | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 9%                                                                                                                                                      | 8%                                                                                                                                                      |
|                      | MSME                       | 10%                                                                         | -                                     | Rs. 10.54                         | -                        | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 9%                                                                                                                                                      | 8%                                                                                                                                                      |
| Cat.2                | Organic Products           | 10%                                                                         | -                                     |                                   | 10%                      | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 9%                                                                                                                                                      | 8%                                                                                                                                                      |
| Cat.2                | Innovative products        | 10%                                                                         | -                                     |                                   | 10%                      | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 10%                                                                                                                                                     | 9%                                                                                                                                                      | 8%                                                                                                                                                      |
| Cat. 3               | Branding & Marketing (B&M) | Only Indian brands covered for selling food product completely manufactured | in                                    | 50% of total expenditure          | -                        | Financial incentive @ 50% of expenditure on B&M abroad subject to max. grant of 3% of sales of food products or Rs. 50 Cr. Per year, Whichever is less. | Financial incentive @ 50% of expenditure on B&M abroad subject to max. grant of 3% of sales of food products or Rs. 50 Cr. Per year, Whichever is less. | Financial incentive @ 50% of expenditure on B&M abroad subject to max. grant of 3% of sales of food products or Rs. 50 Cr. Per year, Whichever is less. | Financial incentive @ 50% of expenditure on B&M abroad subject to max. grant of 3% of sales of food products or Rs. 50 Cr. Per year, Whichever is less. | Financial incentive @ 50% of expenditure on B&M abroad subject to max. grant of 3% of sales of food products or Rs. 50 Cr. Per year, Whichever is less. |

## The details of assistance available to Micro Food Processing Enterprises under PMFME Scheme

(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  subject  to maximum of Rs. 4 lakh per SHG Federation.

(ii). 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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