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Production Linked Incentive scheme for food processing industries
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Monday, 09 December, 2024, 12 : 00 PM [IST]
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Our Bureau, New Delhi
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The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) was approved by Union Cabinet on March 31, 2021, with a budget of Rs 10,900 crore, to be implemented from 2021-22 to 2026-27, and 171 applicants have been enrolled under the scheme. The beneficiary selection process under PLISFPI was conducted as a one-time exercise, preceded by active stakeholder engagement and extensive publicity to ensure broad participation.
By mandating the use of domestically grown agricultural products (excluding additives, flavours, and edible oils), in the manufacturing process, the scheme has substantially increased local raw material procurement, which benefits underdeveloped and rural areas while supporting farmers' incomes. Furthermore, the emphasis on local production of raw materials for processed food has generated additional off-farm employment opportunities, significantly contributing to the economic development of rural regions.
The scheme has significantly contributed to the country's overall growth and development by scaling up domestic manufacturing, enhancing value addition, boosting the domestic production of raw materials, and creating employment opportunities. The scheme supports large companies, millet-based products, innovative and organic products, as well as small and medium enterprises, while also promoting Indian brands globally. According to data reported by the scheme's beneficiaries, an investment of Rs 8,910 crore has been made across 213 locations. As of 31 October 2024, the scheme has reportedly generated employment of over 2.89 lakh.
Government actively supports Small and Medium Enterprises (SMEs), in the food processing sector through schemes like Pradhan Mantri Kisan Sampada Yojana (PMKSY), Production Linked Incentive Scheme for Food Processing Industries (PLISFPI), and the Pradhan Mantri Formalisation of Micro-food processing Enterprises (PMFME), scheme. These schemes provide financial, technical, and marketing support to SMEs, facilitating capacity expansion, innovation, and formalisation. SMEs are also eligible to avail the benefits under various components of the PMKSY Scheme. PMFME scheme specifically targets formalisation of unorganised units, improving their access to institutional credit, modern infrastructure, and enhanced food processing capacity.
Under the PLI scheme, a significant proportion of beneficiaries are MSMEs, with 70 MSMEs directly enrolled and 40 others contributing as contract manufacturers for larger companies. Collectively, these initiatives have strengthened SMEs by fostering innovation, improving competitiveness, expanding market access, generating employment opportunities, and supporting the broader value chain in the food processing industry.
Under the Production Linked Incentive Scheme for Food Processing Industries (PLISFPI), the Government provides financial incentives to promote Indian food brands abroad, supporting branding and marketing activities for Indian-branded consumer food products in global markets. Beneficiaries are reimbursed 50% of their expenditure on branding and marketing abroad, capped at 3% of their annual food product sales or Rs 50 crore per year, whichever is lower. Applicants are required to spend a minimum of Rs 5 crore over five years to qualify. Currently, there are currently 73 beneficiaries under this component of the PLI scheme.
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