Lok Sabha Question No. 250 (UNSTARRED), answered on 2015-12-01
Subject: Investment in Cold Chains
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: RAJESHBHAI NARANBHAI CHUDASAMA

## GOVERNMENT OF INDIA MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO. 250

ANSWERED ON 1 ST  DECEMBER, 2015

## INVESTMENT IN COLD CHAINS

## 250. SHRI RAJESHBHAI CHUDASAMA:

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

- (a) the  number  and  value  of  investment  proposals  received  and  approved  by  the Government for setting up of cold chains in the country after the revised guidelines for the Eleventh Five Year Plan came into effect, year-wise and State-wise;
- (b) the number and value of foreign direct investment proposals received in this regard; and
- (c) whether the Government has any proposal to attract greater investment for setting up of cold chains and if so and the details thereof?

## ANSWER

## THE MINISTER OF STATE FOR FOOD PROCESSING INDUSTRIES

(SADHVI NIRANJAN JYOTI)

(a):   The revised guidelines for the Scheme for Cold Chain, Value Addition and Preservation Infrastructure for the Eleventh Five Year Plan came into effect from 18.03.2010. Year-wise and State-wise details of number and value of investment proposals approved by Ministry of Food Processing Industries under these revised guidelines is at Annexure-I.

- (b) : The  Ministry  has  not  received  any  proposal  for  foreign  direct  investment  under  the above said scheme.

(c):    To  attract  investment  in  cold  chain  infrastructure,  the  Ministry  of  Food  Processing Industries  is  implementing  the  Central  Sector  Scheme  of  Cold  Chain,  Value  Addition  and Preservation Infrastructure since 2008-09. The scheme has provision for providing financial assistance  for  setting  up  of  integrated  cold  chain  infrastructure  for  arresting  post  harvest losses  of  horticulture  &  non-horticulture  produce.  The  scheme  is  primarily  private  sector driven  wherein  financial  assistance  @  50%  of  the  total  cost  of  plant  &  machinery  and technical  civil  works  in  general  areas  and  75%  for  NE  region  and  difficult  areas  (North Eastern  states,  Sikkim,  J&K,  Himachal  Pradesh  and  Uttarakhand)  subject  to  a  maximum grant-in-aid of Rs 10 crore per project is provided for setting up the cold chain infrastructure in  the  country.  Integrated  cold  chain  and  preservation  infrastructure  can  be  set  up  by individuals, groups of entrepreneurs, cooperative societies, Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), NGOs, Central/State PSUs, etc.

In  addition,  National  Horticulture  Mission  (NHM),  National  Horticulture  Board (NHB), and National Cooperative Development Corporation (NCDC) under Department of Agriculture, Cooperation and Farmers Welfare, Ministry of Agriculture & Farmers Welfare and  Agricultural  and  Processed  Food  Products  Export  Development  Authority  (APEDA) under Department of Commerce, Ministry of Commerce and Industries, Government of India are  also  providing  assistance  for  setting  up  cold  storages  under  their  respective  schemes. Various  other incentives  provided  by  the  Government  to  promote  this  sector  are  at Annexure-II.

## ANNEXURE REFERRED TO IN REPLY TO PART (a)  OF LOK SABHA UNSTARRED QUESTION NO. 250 FOR 1 ST  DECEMBER, 2015 REGARDING INVESTMENT IN COLD CHAINS

## Year-wise and State-wise number and value of investment proposals approved by MoFPI for setting up of Cold Chain infrastructure after the issue of revised guidelines for the Eleventh Plan with effect from 18.03.2010

| State                 | 2011-12                   | 2011-12                                         | 2012-13                   | 2012-13                                         | 2013-14                   | 2013-14                                         | 2014-15                   | 2014-15                                         |
|-----------------------|---------------------------|-------------------------------------------------|---------------------------|-------------------------------------------------|---------------------------|-------------------------------------------------|---------------------------|-------------------------------------------------|
| State                 | No. of proposals approved | Value of investment/ project cost (Rs. in lakh) | No. of proposals approved | Value of investment/ project cost (Rs. in lakh) | No. of proposals approved | Value of investment/ project cost (Rs. in lakh) | No. of proposals approved | Value of investment/ project cost (Rs. in lakh) |
| Andhra Pradesh        | 1                         | 2943.10                                         | 1                         | 3200.00                                         | 1                         | 3082.00                                         | 1                         | 3690.00                                         |
| Assam                 | 0                         | 0                                               | 1                         | 1595.90                                         | 1                         | 1399.51                                         | 0                         | 0                                               |
| Bihar                 | 0                         | 0                                               | 0                         | 0                                               | 0                         | 0                                               | 1                         | 2116.00                                         |
| Chhattisgarh          | 0                         | 0                                               | 2                         | 3933.33                                         | 0                         | 0                                               | 0                         | 0                                               |
| Gujarat               | 2                         | 3630.00                                         | 1                         | 1515.16                                         | 4                         | 20501.79                                        | 2                         | 5124.00                                         |
| Haryana               | 0                         | 0                                               | 2                         | 4340.25                                         | 1                         | 1591.91                                         | 4                         | 13825.00                                        |
| Himachal Pradesh      | 4                         | 6448.68                                         | 0                         | 0                                               | 4                         | 7101.25                                         | 0                         | 0                                               |
| Jammu &Kashmir        | 0                         | 0                                               | 0                         | 0                                               | 3                         | 4400.76                                         | 1                         | 1499.00                                         |
| Karnataka             | 1                         | 1400.00                                         | 0                         | 0                                               | 2                         | 2775.00                                         | 0                         | 0                                               |
| Kerala                | 3                         | 7194.91                                         | 0                         | 0                                               | 0                         | 0                                               | 0                         | 0                                               |
| Madhya Pradesh        | 0                         | 0                                               | 1                         | 1722.44                                         | 2                         | 4756.09                                         | 1                         | 2975.00                                         |
| Maharashtra           | 4                         | 13537.22                                        | 5                         | 12626.00                                        | 16                        | 40585.36                                        | 2                         | 6390.00                                         |
| Manipur               | 1                         | 1849.00                                         | 0                         | 0                                               | 0                         | 0                                               | 0                         | 0                                               |
| Mizoram               | 1                         | 519.77                                          | 1                         | 1726.22                                         | 0                         | 0                                               | 0                         | 0                                               |
| Odisha                | 0                         | 0                                               | 0                         | 0                                               | 1                         | 1345                                            | 1                         | 2357.00                                         |
| Punjab                | 2                         | 6334.91                                         | 1                         | 2880.72                                         | 4                         | 11762.52                                        | 5                         | 13725.00                                        |
| Rajasthan             | 0                         | 0                                               | 0                         | 0                                               | 2                         | 6147.00                                         | 1                         | 250.00                                          |
| Tamil Nadu            | 0                         | 0                                               | 0                         | 0                                               | 0                         | 0                                               | 1                         | 2475.00                                         |
| Uttar Pradesh         | 3                         | 4728.92                                         | 1                         | 2706.00                                         | 2                         | 7775.00                                         | 3                         | 6204.00                                         |
| Uttarakhand           | 1                         | 1480.00                                         | 1                         | 1740.39                                         | 7                         | 11403.44                                        | 5                         | 9130.00                                         |
| West Bengal           | 4                         | 9985.30                                         | 1                         | 1627.84                                         | 1                         | 1767.36                                         | 2                         | 4670.00                                         |
| Total No. of Projects | 27                        | 60051.81                                        | 18                        | 39614.25                                        | 51                        | 126393.99                                       | 30                        | 74430.00                                        |

## ANNEXURE REFERRED TO IN REPLY  TO PART (c) OF LOK SABHA UNSTARRED QUESTION NO. 250 FOR 1 ST   DECEMBER, 2015 REGARDING INVESTMENT IN COLD CHAINS

## Details of various other incentives provided by the Government to the cold chain sector

-  Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables have been exempted from Service Tax in Budget 2015-16.
-  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.
-  Under  Section  35-AD  of  the  Income  tax  Act  1961,  deduction  to  the  extent  of  150%  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.
-  Government has extended Project Imports' 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%.
-  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 under Tariff Head: Chapter 84 are exempted from Excise Duty.
-  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.
-  Capital  investment  in  the  creation  of  modern  storage  capacity  has  been  made  eligible  for Viability Gap Funding scheme of the Finance Ministry. Cold chain and post-harvest storage has been recognized as an infrastructure sub-sector.