PLI Scheme for Food Processing

  • January 27, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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PLI Scheme for Food Processing

Subject – Agriculture

Concept –

  • In order to boost domestic manufacturing and cut down on import bills, the central government in March 2020 introduced a PLI scheme that aims to give companies incentives on incremental sales from products manufactured in domestic units.

Scheme Objectives:

  • Support Food manufacturing entities with stipulated minimum Sales and willing to make minimum stipulated investment for expansion of processing capacity and Branding abroad to incentivise emergence of strong Indian brands.:
  • Support creation of global food manufacturing champions;
  • Strengthen select Indian brand of food products for global visibility and wider acceptance in the international markets;
  • Increase employment opportunities of off-farm jobs,
  • Ensuring remunerative prices of farm produce and higher income to farmers.

Salient features:

  • Central Sector Scheme with an outlay of Rs. 10900 crore
  • The first component relates to incentivising manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) foods including Millets based products, Processed Fruits & Vegetables, Marine Products, Mozzarella Cheese.
  • Innovative/ Organic products of SMEs including Free Range – Eggs, Poultry Meat, Egg Products in these segments are also covered under above component.
  • The second component relates to support for branding and marketing abroad to incentivise emergence of strong Indian brands.
  • For promotion of Indian Brand abroad, the scheme envisages grant to the applicant entities for – in store Branding, shelf space renting and marketing.
  • Scheme will be implemented over a six year period from 2021-22 to 2026-27.

Implementation strategy and targets

  • The scheme will be rolled out on All India basis.
  • The scheme shall be implemented through a Project Management Agency (PMA).
  • The PMA would, inter-alia, be responsible for appraisal of applications/ proposals, verification of eligibility for support, scrutiny of claims eligible for disbursement of incentive
  • The incentive under the scheme would be paid for six years ending 2026-27. The incentive payable for a particular year will be due for payment in the following year. The duration of the scheme will be six years i.e. 2021-22 to 2026-27.
  • The scheme is “fund-limited”, i.e. cost shall be restricted to the approved amount. The maximum incentive payable to each beneficiary shall be fixed in advance at the time of approval of that beneficiary. Regardless of achievement/ performance, this maximum shall not be exceeded.

Administrative and Implementation Mechanisms

  • The Scheme would be monitored at Centre by the Empowered Group of Secretaries chaired by the Cabinet Secretary
  • Inter-Ministerial Approval Committee (IMAC) would approve selection of applicants for coverage under the scheme, sanction and release of funds as incentives.
  • The Ministry will prepare Annual Action Plan covering various activities for implementation of the scheme.
  • A third party evaluation and mid-term review mechanism would be built in the programme.
Agriculture PLI Scheme for Food Processing