FNB News - “PLISFPI will help generate processed food output of over Rs 33,000 cr”

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INTERVIEW

“PLISFPI will help generate processed food output of over Rs 33,000 cr”

Monday, 19 December, 2022, 08 : 00 AM [IST]

The Ministry of Food Processing Industries in recent times has put in place various schemes to make India stand among top countries globally. Minister of State for Food Processing Industries Prahlad Singh Patel in an email interaction with Ashwani Maindola, explains the work done by his ministry and the future roadmap for the food processing industries. Excerpts:

Where do the Indian food processing industries stand globally and how much progress has this sector witnessed in the last five years? Your assessment.

The food processing sector addresses the critical issues of food security by providing wholesome nutritious food to the masses. Accordingly, food processing sector has been identified as one of the champion sectors under “Make in India”. The sector has also emerged as an important segment of the Indian economy in terms of its contribution to GDP, exports, investment and employment.

The gross value added (GVA) in the food processing sector has increased from Rs 1.61 lakh crore in 2015-16 to Rs 2.37 lakh crore in 2020-21 with a compounded annual growth rate (CAGR) of 8.04%. The CAGR of the overall manufacturing sector GVA had increased only by 3.38% over the same period.
The export of Processed-Food Products (ITC HS Chapters 16-23) has increased from US$4.86 billion in 2015-16 to US$10.42 billion in 2021-22 growing at 13.55% CAGR over this period.
Foreign Direct Investment attracted by the food processing sector was US$5.29 billion since 2014-15 upto 2021-22.
The sector is one of the largest employment provider in the organised manufacturing sector contributing 12.22% of employment in the total registered sector.

How MoFPI is ensuring that the Indian food processing sector is future- ready against global competition??
The Prime Minister during the Union Budget 2021 had stated “amidst the ever-increasing agricultural production, India needs a post-harvest revolution or food processing revolution with value addition in the 21st Century”.

In order to make the Indian food processing industry a globally competitive industry, the Cabinet approved the Central Sector Scheme – “Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)”. The main objective of the scheme is to support creation of global food manufacturing champions commensurate with India’s natural resource endowment and support Indian brands of food products in the international markets with an outlay of Rs 10,900 crore. Under this, the ministry is providing financial support for branding & marketing of Indian food brands in the international markets.

The Pradhan Mantri KisanSampadaYojana is augmenting the processing and preservation capacities in the country, including support for research and development, food testing infrastructure and human resource development.

What are the key challenges for the sector's growth, identified by the ministry and how are those being mitigated??
The sector is dominated by micro enterprises. Major challenges faced by the sector are as under:

Low level of processing
Lack of adequate post-harvest infrastructure
Seasonality of operations
Lack of product development and innovation
Limited access to credit particularly for the micro/ informal sector

The ministry is implementing various Central sector schemes e.g., Pradhan Mantri Kisan Sampada Yojana (PMKSY), Prime Minister Formalisation of Micro Food Processing Enterprises (PMFME) and Production Linked Incentive Scheme for the Food Processing Industries (PLISFPI) for overall growth of the sector. The ministry intervenes to cover various segments of the industry from micro to small, medium and larger units.

What are the progresses made in the PLI scheme for food processing industries? We know recently approvals were given to units for millets and organic products.
In line with the vision of ‘Make in India’ of PM, Ministry of Food Processing Industries is continuously endeavouring to create Global Food Manufacturing Champions within India and to promote Indian brands of food products across the world. To facilitate this goal, we have launched a Production Linked Incentive Scheme for Food Processing Industries (PLISFPI) with the total budget outlay of ?10,900 crore, which is being implemented during FYs 2021-22 to 2026-27. The scheme is envisaged to bring in an investment of ?7,722 crore in the first two years of its implementation. Our aim is not just to promote domestic consumption of food products but also to promote our products internationally. The implementation of the scheme would facilitate expansion of processing capacity to generate processed food output of over Rs 33,000 crore and create employment for nearly 2.5 lakh persons by the year 2026-27.

A total of 56 applications under Category-I (Ready to eat/ Ready to cook-12, Fruits and Vegetables-29, Marine Products-11 and Mozzarella Cheese- 04), 13 applications under Category-II (Organic products-11 and Innovative products-2) and 80 applications under Category-III (Branding & Marketing) were initially covered under the Scheme (total 129 applications). As on March 31, 2022, the applicants have reported the actual investment of Rs 4,165 crore against the committed investment target of Rs 3,704 crore. The actual sales of production are reported to Rs.86,358 crore and export is reported to Rs 20,206 crore.

PLI Scheme for Millet Based Products: Detailed guidelines for the Millet Based PLI Scheme were issued on June 23, 2022. EoI for this category was invited on June 27, 2022, with last date July 29, 2022. Also, in first phase of EoI, the ministry had approved 11 applicants for organic products. In order to promote Indian organic products and utilise the remaining budget allocated to Category-II of PLISFPI, fresh applications were also invited from the SMEs engaged in processing of organic food products covered under the scheme guidelines dated May 2, .2021.

a)Total 42 applications were received in response to the EoI dated June 27, 2022, (9 for Organic Products, 8 for Millet Based Products from Large Entities and 25 for Millet Based Products from MSMEs).
b) 5th meeting of Approval Committee was held on Oct 6, 2022.
c) 3 applications for organic products, 8 and 22 applications for millet based products from large entities and MSMEs respectively, have been approved.

Next year, MoFPI is proposed to be holding a mega food event like the World Food India, and the focus area is millets. Share some insights.?
With the clarion call of our Prime Minister towards Atmanirbhar Bharat and Vocal for Local, Ministry of Food Processing Industries has been taking various initiatives to drive the seamless growth of food processing sector at full capacity.

At UNGA, 2023 has been declared as the ‘International Year of Millets’ and Ministry of Food Processing Industries is planning to organise a mega food event, on similar lines to World Food India 2017. For marking the event a great success various activities have been initiated as a processor to the main event:

Food processing summits & millet expos
Domestic and international roadshows
Conferences and seminars
Roundtables with key policy makers

Encompassing the entire food spectrum from production to consumption, the proposed event is looking at creating a better sourcing environment, thereby enabling higher returns for farmers, creating employment, and fostering entrepreneurship

Where do you see Indian food processing industries would stand five years from now??
The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year. It is a high-growth and high-profit sector due to its immense potential for value addition. Also, the sector is being recognised as a champion sector of India.

The food industry is witnessing new era of growth in various segments such as nutritious crops such as millets / nutri-cereals (considered as super food of India), ready to eat / cook, frozen foods and so on as champion segments.

Furthermore, to strengthen our position in food processing industry at global levels India has constituted Joint Working Groups (JWGs) with technologically advanced and export-oriented nations like Japan, Germany and Italy. And continues to identify opportunities for bi-lateral arrangements with other global leaders.

We forecast a flourishing food processing sector through the various initiatives of the Government of India and Ministry of Food Processing Industries.It will result in significant reduction in food waste, better returns to farmers, proliferating export volumes and more employment across the sector. The sector will thereby make a significant growth contribution to the Indian economy.