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Single-window finance for agro processing by June; guidelines by April
Wednesday, 14 February, 2018, 08 : 00 AM [IST]
Ashwani Maindola, New Delhi
A specialised financial institution for agro processing will be coming up by June. Giving out details at a press conference held here on Tuesday, Harsimrat Kaur Badal, Union minister for food processing industries, stated that her ministry aimed at finalising the contours of the institution soon and bringing out the guidelines for the same by April.

Badal said, “Our aim is to come out with the details of this institution by June this year so that it could start operating soon,” adding that by April the outlay of the institution would be out.

“Banks usually consider food processing a risky sector to lend credit to, and the need for such an institution dedicated to this sector has been felt,” the minister said.

Badal pointed out that this would be a single-window solution for all credit-related queries, and added, “This institution would also provide all help related to training, risk mitigation and capacity building.”

The minister observed, “Installing a food processing project is capital-intensive and has a long gestation period. Therefore the ministry provides viability gap funding through its various schemes.”

Explaining further, Badal stated, “Despite this, it is extremely difficult to get funding for the project. To overcome these deterrents, the government plans to establish a financial institution dedicated to the agro processing sector to make credit accessible on a timely basis and provide it at an affordable rate to this sector.”
The Budget Document for 2018-19 agreed in principle to the creation of such an institution.

Meanwhile, the minister claimed that the on-ground manifestation of 15 Memorandums of Understanding (MoUs) worth $4 billion, which were signed during the inaugural World Food India Summit, which took place in New Delhi in November 2017, had commenced. She added that these MoUs were from such companies as Cargill, Coke, Pepsi, and ITC.

Badal said her ministry expected that the on-ground manifestation of the rest of the MoUs will start soon. In all, 50 MoUs worth $14 billion were inked at the summit.

“MoFPI (ministry of food processing industries) is expected to touch foreign direct investment (FDI) worth $1 billion this fiscal,” the minister added, stating that in the first seven months of fiscal year 2017-18, the ministry had crossed the $500-million mark. This FDI came from such sectors as confectionery, grain and dairy processing.

Badal said that her ministry will shortly meet the stakeholders for the proposed Operation Greens wherein Rs 500 crore have been earmarked for managing commodities like Tomatoes, Onions and Potatoes (TOPs).
 
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