Cabinet approves Rs 10,900 crore PLI scheme for food processing industry

The Union Cabinet on Wednesday approved production linked incentive scheme for food processing industry with an outlay of Rs 10,900 crore to strengthen domestic companies.

The scheme aims to strengthen select Indian brand of food products for global visibility and wider acceptance in international markets, ensure remunerative prices of farm produce and higher income to farmers, and increase employment opportunities. Its duration will be for six years from 2021-22 to 2026-27.

The scheme will help in increasing income in the country, Union Minister Piyush Goyal said while briefing the media and called it a 'fitting tribute' to farmers of the country because of whom India's agricultural production is set to rise by 3-3.5 per cent in 2020-21 despite the COVID-19 pandemic.

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The PLI scheme will incentivise manufacturing of four major food product segments -- ready to cook/eat foods, processed fruits and vegetables, marine products and mozzarella cheese. Besides, innovative and organic products of small and medium enterprises (SMEs)including free range-eggs, poultry meat, egg products will also be covered, the government said in a release.

The selected applicants will have to undertake investment, as quoted in their  application, in plant and machinery in the first two years of 2021-22 and 2022-23. "The conditions of stipulated minimum sales and mandated investment will not be applicable for entities selected for making innovative/organic products."

The scheme also envisages providing grant to applicant entities for in-store branding, shelf space renting and marketing with an intention to promote Indian brands abroad.

The implementation of the scheme is expected to facilitate expansion of processing capacity to generate processed food output of Rs 33,494 crore and create employment for nearly 2.5 lakh persons by 2026-27.

A national level portal would be set-up for applicant enterprises to apply for the scheme, while selection of applicants for coverage under the scheme, sanction and release of funds as incentives would be undertaken by the Ministry of Food Processing Industries.

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