Government Policy in Food Processing Sector

Both central and central governments in India would like to see food processing sector to become powerhouse in the economy. Towards this, they have tried to put supporting framework. They major government schemes supporting this sector are discussed below:

  • To check the waste of the harvest, there is a “Central sector scheme of Cold Chain, Value Addition and Preservation Infrastructure“. Under this scheme, government provides grants in aid up to 50% (75% in North East and Hills) of a cold chain project subject to maximum Rs. 10 Crore. Such cold chain projects can be set up by individuals, groups of entrepreneurs, cooperative societies, Self Help Groups (SHGs), Farmer Producer Organizations, NGO, Public Sector Companies etc.
  • Further, there is a Centrally Sponsored Scheme called National Mission on Food Processing (NMFP). The NDA government has delinked this scheme from central support. It is now up to the states if they would like to continue this scheme or not. They can set their own targets, design their own plans and develop the industry based on locally grown raw material.
  • Loan to food & agro-based processing units and cold chain has been classified under Agriculture activities for Priority Sector Lending (PSL) subject to aggregate sanctioned limit of Rs. 100 crore per borrower.
  • The Ministry of Food Processing Industries is implementing Mega Food Parks Scheme since the year 2008. Under this scheme, government provides Financial Assistance up to Rs. 50.00 Crore for setting up Mega Food Parks for creation of modern infrastructure facilities for food processing along the value chain from farm to market.

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