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MoFPI planning to set up bank akin to NABARD for food processing sector
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Wednesday, 13 December, 2017, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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What the National Bank for Agriculture and Rural Development (NABARD) is to the agriculture sector in India, the ministry of food processing industries (MoFPI) is considering being to the food processing sector, with its pitch for the establishment of a bank to provide the requisite credit and finance for its projects.
According to the sources in the ministry, this bank would be a largely private entity, while the government will hold a stake in it. A consultation note has been circulated amongst the various ministries for the same. This is expected to come up for discussion shortly.
Harsimrat Kaur Badal, minister for food processing industries, confirmed the development, stating that the ministry had initiated the work on the project. She added, “The contours are to be worked out. The funds that will be lent to the processing sector are to be created. Analysis as to how this bank would function is underway.”
It is pertinent to mention that the government had brought the food processing sector under the priority sector lending scheme, and a fund amounting to Rs 2,000 crore had been assigned to NABARD.
However, this loan is available to only the units meant for mega parks, and therefore, its disbursement has been very slow. Hence, there aren’t many takers for the funds.
MoUs inked
Meanwhile, MoFPI, which aims to invest approximately $19 billion over the next two years, informed at the inaugural World Food India Summit, which it organised in New Delhi recently, that 50 Memorandums of Understanding (MoUs), worth $14 billion, were signed. It added that it was planning to pump about $5 billion into the infrastructure projects of the sector.
Badal told FnB News, “We aimed to transform the food economy of the country, and as a result, $14 billion has been being invested by investors through 50 MoUs, which were inked at the World Food India Summit 2017.”
“The government plans to invest an additional $5 billion through various schemes into the sector. So, a total investment of $19 billion in this sector over the next two or three years will definitely make an impact on the ground, enhancing farmers’ incomes, creating employment and bringing in the world’s best technology,” she added.
The minister stated that right from the beginning, the government has worked to create a favourable environment for the sector, be it by setting up a fund of Rs 2,000 crore with NABARD or allowing 100 per cent foreign direct investment (FDI) in food retail.
“MoFPI has witnessed a 40 per cent surge in FDI in the country’s food processing sector since last year. According to the ministry, financial year (FY) 2017-18 has continued to display the upward positive trend of foreign investment in the sector, with $263 million having already been invested within the first quarter (i e between April and June 2017),” she added.
On the question of the implementation of the MoUs, Badal said a dedicated desk had been created in Invest India to monitor the investment.
“The actual work will commence after the signing of the MoUs, when the ministry starts implementing the projects. A special cell has been created in Invest India and a dedicated team has been put in place to follow up on each MOU,” she added.
“We will ensure handholding between the Central and state governments and the people who inked the MoUs. Besides, I will be personally monitoring the development on the ground,” the minister said.
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