Lok Sabha Question No. 1362 (UNSTARRED), answered on 2015-07-28
Subject: Food Processing Industries
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: GAJANAN CHANDRAKANT KIRTIKAR, M. CHANDRAKASI, M. UDHAYAKUMAR, NEELAM SONKER, SUDHEER GUPTA, ANURAG SINGH THAKUR, P. KARUNAKARAN, VINOD KUMAR SONKAR, BAIJAYANT "JAY" PANDA, RAJESHBHAI NARANBHAI CHUDASAMA, RAGHAV LAKHANPAL, KALIKESH NARAYAN SINGH DEO, C.S. PUTTARAJU, DHARMENDRA YADAV, RAVNEET SINGH, KUNWAR HARIBANSH SINGH, MAHEISH GIRRI, SUNIL BALIRAM GAIKWAD, SHIVKUMAR CHANABASAPPA UDASI, VIJAY KUMAR HANSDAK, BANSHILAL MAHTO, CHIRAG PASWAN, RAMESH CHANDER KAUSHIK, NAGENDRA KUMAR PRADHAN, VINAYAK BHAURAO RAUT, RAHUL KASWAN, ASHOK SHANKARRAO CHAVAN, RAMA DEVI, BAHADUR SINGH KOLI, SHIVAJI ADHALRAO PATIL, NISHIKANT  DUBEY, ANANDRAO  ADSUL, YERRAM VENKATA SUBBAREDDY, DILIP PATEL, OM BIRLA, VIJAY KUMAR S.R., KAPIL MORESHWAR PATIL, GAJENDRA SINGH SHEKHAWAT, LAKHAN LAL SAHU, LAXMAN GILUWA, MANOJ RAJORIA, NARANBHAI KACHHADIA, RAHUL RAMESH SHEWALE, Shrirang Appa Barne

GOVERNMENT OF INDIA

MINISTRY OF FOOD PROCESSING INDUSTRIES

**LOK SABHA**

**UNSTARRED QUESTION NO.1362**

TO BE ANSWERED ON 28 TH JULY, 2015

FOOD PROCESSING INDUSTRIES

1362.  SHRI GAJANAN KIRTIKAR:

SHRI M. CHANDRAKASI:

ADV. M. UDHAYAKUMAR:

SHRIMATI NEELAM SONKER:

SHRI SUDHEER GUPTA:

SHRI ANURAG SINGH THAKUR:

SHRI P. KARUNAKARAN:

SHRI VINOD KUMAR SONKAR:

SHRI BAIJAYANT JAY PANDA:

SHRI RAJESHBHAI CHUDASAMA:

SHRI RAGHAV LAKHANPAL:

SHRI KALIKESH N. SINGH DEO:

SHRI C.S. PUTTA RAJU:

SHRI DHARMENDRA YADAV:

SHRI RAVNEET SINGH:

KUNWAR HARIBANSH SINGH:

SHRI MAHEISH GIRRI:

DR. SUNIL BALIRAM GAIKWAD:

SHRI SHIVKUMAR UDASI:

SHRI VIJAY KUMAR HANSDAK:

DR. BANSHILAL MAHATO:

SHRI CHIRAG PASWAN:

SHRI RAMESH CHANDER KAUSHIK:

SHRI NAGENDRA KUMAR PRADHAN:

SHRI VINAYAK BHAURAO RAUT:

SHRI RAHUL KASWAN:

SHRI ASHOK SHANKARRAO CHAVAN:

SHRIMATI RAMA DEVI:

SHRI BAHADUR SINGH KOLI:

SHRI ADHALRAO PATIL SHIVAJIRAO:

SHRI NISHIKANT DUBEY:

SHRI ANANDRAO ADSUL:

SHRI Y.V. SUBBA REDDY:

SHRI DILIP PATEL:

SHRI OM BIRLA:

SHRI S.R. VIJAYAKUMAR:

SHRI KAPIL MORESHWAR PATIL:

SHRI GAJENDRA SINGH SHEKHAWAT:

SHRI LAKHAN LAL SAHU:

SHRI LAXMAN GILUWA:

DR. MANOJ RAJORIA:

SHRI NARANBHAI KACHHADIYA:

SHRI RAHUL SHEWALE:

SHRI SHRIRANG APPA BARNE:

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

1. the existing capacity of food processing sector in each State/UT in the country and the foreign exchange earned by this sector during each of the last three years and current year;

1. whether the domestic Food Processing Sector is lagging behind other advance countries in matter of Food Processing despite the fact that country is leading producer of vegetable and fruits in the world;

1. if so, the details thereof along with the details of foreign assistance sought and given by various countries to India to promote Food Processing in the country;

1. whether the Government propose to provide fresh incentives and affordable credit to the entrepreneurs of Food Processing Sector to bring substantial change in this sector, if so, the details thereof; and

1. the steps taken by the Government to revamp food processing sector?

**ANSWER**

THE MINISTER OF STATE FOR FOOD PROCESSING INDUSTRIES

(SADHVI NIRANJAN JYOTI)

(a): Information on capacity of food processing sector in different State/UT in the country is not maintained by the Ministry. However, as per the latest Annual Survey of Industries (ASI) 2012-13, the State/ UT-wise details of number of food processing units in registered sector are given at **Annexure.**

The foreign exchange earned in terms of value of exports in food processing sector for last three years and the current year is as under:

| Exports of agri & processed food products                                                               | Exports of agri & processed food products                                                               | Exports of agri & processed food products                                                               | Exports of agri & processed food products                                                               | Exports of agri & processed food products                                                               |
|---------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|
| (US $ Million)                                                                                          | (US $ Million)                                                                                          | (US $ Million)                                                                                          | (US $ Million)                                                                                          | (US $ Million)                                                                                          |
| Year                                                                                                    | 2012-13                                                                                                 | 2013-14                                                                                                 | 2014-15                                                                                                 | 2015-16*  (April- May)                                                                                  |
| Exports                                                                                                 | 36,457                                                                                                  | 38,111                                                                                                  | 35,757                                                                                                  | 4,814                                                                                                   |
| Source: Directorate General of Commercial Intelligence and Statistics (DGCI&S), *: Provisional Results. | Source: Directorate General of Commercial Intelligence and Statistics (DGCI&S), *: Provisional Results. | Source: Directorate General of Commercial Intelligence and Statistics (DGCI&S), *: Provisional Results. | Source: Directorate General of Commercial Intelligence and Statistics (DGCI&S), *: Provisional Results. | Source: Directorate General of Commercial Intelligence and Statistics (DGCI&S), *: Provisional Results. |

(b) & (c):  The overall level of food processing in the country is estimated to be less than 10 per cent whereas the level of food processing is reported to be very high in developed countries (80 per cent in USA, 70 per cent in France) and in many developing countries as well (30 per cent in Thailand). Lack of efficient supply chain infrastructure, inadequate processing capacity, complex regulatory regime and access to affordable credit are some of the important causes of slow development of food processing sector in the country.

However, food processing sector has been growing at an average growth of around 8.4 per cent annually as compared to around 3.3 per cent in agriculture and 6.6 per cent in manufacturing for last 5 years ending 2012-13.

The Government has entered into agreements/signed memorandum of understanding with France and Italy for bilateral cooperation in the field of food processing sector. These agreements envisage co-operation on exchange of technical and scientific skills, exchange of know-how & technologies, enabling creation of business joint ventures and support research actions etc.

(d) & (e):	For promotion and development of food processing sector in the country,  Government is implementing Central Sector Scheme for Development of Infrastructure for Food Processing having components of (a) Mega Food Parks (b) Integrated Cold Chain, Value Addition and Preservation Infrastructure and (c) Setting-up / Modernization of Abattoirs (subsumed in NMFP w.e.f. 01.04.2014); Scheme of Technology Up-gradation / Establishment / Modernization of Food Processing Industries; Scheme for Quality Assurance, Codex Standards, Research & Development and Other Promotional Activities; Scheme for Human Resource Development and  Scheme of Strengthening of Institutions.

The Government is also providing a number of fiscal incentives for giving impetus to the development of food processing sector including automatic approval for foreign equity up to 100% in food processing sector. The Government has reduced excise duty on food processing and packaging machinery from 10% to 6%. The food processing units have been allowed 100% Income Tax exemption on profits for the first five years of operation and after that at the rate of 25% Income tax exemption on the profits for the next five years. Promotional meets/ workshops are also organized from time to time for creating awareness among investors. The Government has also created a Special Fund of Rs. 2000 crore in National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit to the food processing industries in the designated food parks.

As per latest guidelines for Priority Sector Lending (PSL) by Reserve Bank of India, loan to food & agro-based processing units and Cold Chain are now classified under Agriculture activities subject to aggregate sanctioned limit of ₹100 crore per borrower to ensure greater flow of credit to entrepreneurs for setting up of food processing units and attract investment in the sector.

*****

**Annexure**

| **ANNEXURE REFERRED IN REPLY TO PART (a) OF LOK SABHA UNSTARRED QUESTION NO. 1362 FOR 28**  **TH**  **JULY, 2015 REGARDING FOOD PROCESSING INDUSTRIES**  The details of number of food processing units in Registered Sector for different States/ UTs during  2012-13   |                                              |                                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|----------------------------------------------|
| S. No.                                                                                                                                                                                                                                                                   | Name of the State/UTs                        | Number of registered food processing units   |
| 1                                                                                                                                                                                                                                                                        | Andhra Pradesh                               | 5,735                                        |
| 2                                                                                                                                                                                                                                                                        | Andaman & Nicobar Islands                    | 6                                            |
| 3                                                                                                                                                                                                                                                                        | Assam                                        | 1,256                                        |
| 4                                                                                                                                                                                                                                                                        | Bihar                                        | 736                                          |
| 5                                                                                                                                                                                                                                                                        | Chandigarh (U.T.)                            | 14                                           |
| 6                                                                                                                                                                                                                                                                        | Chhattisgarh                                 | 1,008                                        |
| 7                                                                                                                                                                                                                                                                        | Dadra & Nagar Haveli                         | 11                                           |
| 8                                                                                                                                                                                                                                                                        | Daman & Diu                                  | 37                                           |
| 9                                                                                                                                                                                                                                                                        | Delhi                                        | 159                                          |
| 10                                                                                                                                                                                                                                                                       | Goa                                          | 90                                           |
| 11                                                                                                                                                                                                                                                                       | Gujarat                                      | 1,923                                        |
| 12                                                                                                                                                                                                                                                                       | Haryana                                      | 608                                          |
| 13                                                                                                                                                                                                                                                                       | Himachal Pradesh                             | 163                                          |
| 14                                                                                                                                                                                                                                                                       | Jammu & Kashmir                              | 156                                          |
| 15                                                                                                                                                                                                                                                                       | Jharkhand                                    | 206                                          |
| 16                                                                                                                                                                                                                                                                       | Karnataka                                    | 2,038                                        |
| 17                                                                                                                                                                                                                                                                       | Kerala                                       | 1,501                                        |
| 18                                                                                                                                                                                                                                                                       | Madhya Pradesh                               | 738                                          |
| 19                                                                                                                                                                                                                                                                       | Maharashtra                                  | 3,077                                        |
| 20                                                                                                                                                                                                                                                                       | Manipur                                      | 19                                           |
| 21                                                                                                                                                                                                                                                                       | Meghalaya                                    | 18                                           |
| 22                                                                                                                                                                                                                                                                       | Nagaland                                     | 15                                           |
| 23                                                                                                                                                                                                                                                                       | Odisha                                       | 931                                          |
| 24                                                                                                                                                                                                                                                                       | Puducherry                                   | 75                                           |
| 25                                                                                                                                                                                                                                                                       | Punjab                                       | 2,792                                        |
| 26                                                                                                                                                                                                                                                                       | Rajasthan                                    | 795                                          |
| 27                                                                                                                                                                                                                                                                       | Sikkim                                       | 21                                           |
| 28                                                                                                                                                                                                                                                                       | Tamil Nadu                                   | 5,161                                        |
| 29                                                                                                                                                                                                                                                                       | Telangana                                    | 3,716                                        |
| 30                                                                                                                                                                                                                                                                       | Tripura                                      | 68                                           |
| 31                                                                                                                                                                                                                                                                       | Uttar Pradesh                                | 2,097                                        |
| 32                                                                                                                                                                                                                                                                       | Uttarakhand                                  | 383                                          |
| 33                                                                                                                                                                                                                                                                       | West Bengal                                  | 1,624                                        |
|                                                                                                                                                                                                                                                                          | **Total**                                    | ***37,175***                                 |
| Source: Annual Survey of Industries, 2012-13                                                                                                                                                                                                                             | Source: Annual Survey of Industries, 2012-13 | Source: Annual Survey of Industries, 2012-13 |