The Union Cabinet has on 31 March 2021 approved a Production Linked Incentive Scheme for the Food Processing Industry. The scheme, with the outlay of INR 10900 crore, has the objective to support creation of global food manufacturing champions and strengthen select Indian brand of food products for global visibility and wider acceptance in the international markets. The Scheme will be implemented over a six-year period from 2021-22 to 2026-27.
According to the PIB press release, first component of the scheme relates to incentivising manufacturing of four major food product segments viz. ready to cook/ ready to eat foods, processed fruits and vegetables, marine products and mozzarella cheese. The second component relates to support for branding and marketing abroad to incentivise emergence of strong Indian brands.
It may be noted that the first component also includes innovative/ organic products of SMEs including free range -eggs, poultry meat, egg products.
The selected applicant will be required to undertake investment, as quoted in their application (subject to the prescribed minimum) in plant & machinery in the first two years, i.e. in 2021-22 and 2022-23. However, as per the press release, investment made in 2020-21 will also be counted for meeting the mandated investment.
The incentive under the scheme payable for a particular year will be due for payment in the following year. Putting a cap on the maximum incentives payable, the press release notes that the maximum incentive payable to each beneficiary shall be fixed in advance at the time of approval of that beneficiary and that regardless of the achievement/ performance, this maximum will not be exceeded.
The press release also notes that India is having competitive advantage in terms of resource endowment, large domestic market and scope for promoting value added products.