Guidelines issued for PLI Scheme for Food Processing Industry

The Government of India recently issued guidelines for the “Production Linked Scheme” of Food Processing Industry. The GoI had earlier approved the PLI Scheme for Food Processing under the “Atma Nirbhar Bharat” with an outlay of 10,900 crores of rupees. The scheme is to be implemented between 2021-22 and 2026-27.

Categories in the Guidelines

The Guidelines has divided the applicants of the scheme into the following categories:

Category 1: These applicants are large entities who apply for Incentive based on Sales and Investment criteria. These applicants shall undertake branding and marketing activities abroad. They shall also apply for grant.

Category 2: These applicants belong to Small and Medium enterprises. They manufacture innovative products. They apply for the grant under the scheme based on their sales

Category 3: These are applicants who apply for grant to undertake branding and marketing activities abroad.

Guidelines

  • The sale-based incentive under the PLI scheme shall be paid for six years between 2021-22 and 2026-27.
  • The base year to calculate incremental sales will be 2019-20 and the base year for the fifth and sixth year is to be 2021-22 and 2022-23 respectively.
  • The grant provided on branding and marketing shall be extended to 50% of the expenditure. The maximum grant allowed is 3% of sales on food products or 50 crores of rupees per year (whichever is less).

Selection of applications

The following guidelines have been provided for selecting the applicants:

  • The Category I applicants are selected based on their sales, committed investment and exports. There are four product segments that are to be incentivised under the scheme. They are ready to cook or ready to eat including millet-based foods, marine products, processed fruits and vegetables and mozzarella cheese.
  • The applicants under Category II are selected based on their innovative proposal, uniqueness of the product, etc.
  • The applicants under Category III are selected based on the level of recognition of their brand, plan for production, strategy, sales, export markets, etc.

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