Lok Sabha Question No. 3907 (UNSTARRED), answered on 2015-12-22
Subject: Setting up of Cold Storages
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: KALIKESH NARAYAN SINGH DEO, T.G. VENKATESH BABU, PINAKI MISRA, C.S. PUTTARAJU, RAMA DEVI, FEROZE VARUN GANDHI, SAKUNTALA LAGURI

## GOVERNMENT OF INDIA MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO 3907

ANSWERED ON 22 ND  DECEMBER, 2015

## SETTING UP OF COLD STORAGES

## 3907.  SHRI KALIKESH N. SINGH DEO:

SHRI VENKATESH BABU T.G.:

SHRI PINAKI MISRA:

SHRI C.S. PUTTA RAJU:

SHRIMATI RAMA DEVI:

SHRI FEROZE VARUN GANDHI:

SHRIMATI SAKUNTALA LAGURI:

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

- (a)   the number of existing cold storages in rural areas vis-à-vis urban areas of the country ;
- (b)   whether majority of cold storages are mainly concentrated in urban areas leaving behind the rural areas where there is imperative need for more cold storages;
- (c)   if so, the details thereof and corrective measures taken by the Government in this regard;
- (d)  whether the Government has conducted a survey to assess the number of cold storages required to be set up in rural areas in next two years ; and
- (e)    if  so,  the  outcome  thereof  and  the  steps  taken  by  the  Government  to  involve  private sector/co-operative sector in setting up of more cold storages in rural areas?

## ANSWER

## THE MINISTER OF STATE FOR (FOOD PROCESSING INDUSTRIES) (SADHVI NIRANJAN JYOTI)

(a)  to  (c) : National  Horticulture  Board,  Department  under  Department  of  Agriculture, Cooperation and Farmers Welfare, Ministry of Agriculture & Farmers Welfare has conducted an 'All India Cold Storage Capacity & Technology - Baseline Survey' through M/s Hansa Research  Group  Pvt.  Ltd.,  Mumbai.  As  per  the  survey  report,  68%  of  the  existing  cold storages in the country are located at the farm gate. Further, 75% of the cold storages in the country are exclusively storing horticulture produce and directly linked to farms.

Setting  up  of  cold  storages/  cold  chain  infrastructure  forms  part  of  the  total agri-logistics supply chain from farm gate to the consumers. The schemes being implemented by  the  Government  for  assisting  in  creation  of  cold  storage/  cold  chain  infrastructure  are primarily  private  sector  driven  and  provide  flexibility  to  the  promoters  to  choose  the components,  their  capacities  and  location  of  the  project  as  per  technical  feasibility  and economic viability of the project.

(d)  &  (e):    National  Centre  for  Cold  Chain  Development  (NCCD)  -  an  autonomous organization  under  Department  of  Agriculture,  Cooperation  and  Farmers  Welfare  through NABARD Consultancy Pvt. Ltd. (NABCONS) has conducted a consumption driven study to understand  the  holistic  requirement  of  cold  chain  infrastructure.  The  report  released  in September,  2015  provides  details  of  cold  storage  requirements  as  well  as  associated  key infrastructure  such  as pack  houses  and  reefer  trucks  integral to  the  appropriate and  holistic cold chain connectivity between production areas and consumption centres. As per above All India  Cold  Chain  Infrastructure  Capacity  (Assessment  of  status  &  gap)  conducted  by NABCONS,  the total Cold Chain requirement has been assessed to be 35.10 million tonnes and taking into present capacity of 31.82 million tonnes, the gap is of 3.28 million tonnes.

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.  Various  other  incentives provided by the Government to promote this sector are at Annexure-I.

In addition, Department of Agriculture and Cooperation is implementing Mission for Integrated Development of Horticulture (MIDH) for holistic development of horticulture in the country including creation of post-harvest management infrastructure for better efficiency of  cold  supply  chain  to  reduce  losses  of  perishable  horticulture  produce.  Post-Harvest Management component includes establishment of cold storages, primary/ mobile processing units, pack houses, pre-cooling units, controlled atmosphere storage, reefer vans and setting up of ripening chambers etc. Under post-harvest component credit linked back ended subsidy @ 35% of the project cost in general areas and 50% in case of hilly and schedule areas is available.

Further, 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 creation of post-harvest management infrastructure through their respective schemes.

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## Annexure-I

## ANNEXURE  REFFERED  TO  IN  THE  REPLY  TO  PART  (d)  AND  (e)  OF  LOK SABHA UNSTARRED QUESTION NO. 3907 FOR ANSWER ON 22 ND  DECEMBER, 2015 REGARDING SETTING UP OF COLD STORAGES

## 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 post-harvest 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  postharvest storage has been recognized as an infrastructure sub-sector.