The Ministry of Food Processing Industries (MoFPI) launched the NABARD fund of Rs 2,000 crore for setting up food processing units in the country in 2015-16 Budget but only around Rs 600 crore have been utilised so far.
Since its inception, five years ago, the fund has been a bone of contention between the industry and the ministry as the latter wants to restrict this fund to government designated food parks only while the industry wanted it to be open to all units across the country.
Experts have also opined that the limitation of the fund that it could be used for the units in designated park, has severely damaged the prospects of the purpose of such a fund.
Rameshwar Teli, Minister of State for Food Processing Industries, has stated in Parliament, “Out of this special fund (of Rs 2,000 crore), NABARD has sanctioned term loan of Rs 490.69 crore to 12 Mega Food Park projects, Rs 44.71 crore to four individual processing units in Designated Food Parks and Rs 64.39 crore to five Agro Processing Clusters so far.”
Interestingly, no project or unit in the state of Tamil Nadu has availed loan out of this fund so far.
According to the industry insiders, the fund should be open for all and not linked to where they are located. The loan from NABARD was given to attract units to Mega Food Park, not many takers in this regard indicate that units still find the Mega Food Park policy to be unattractive.
In the budgetary proposal of 2015-16, a special fund of Rs 2,000 crore created by the government with the National Bank for Agriculture and Rural Development (NABARD) to provide credit at affordable rates to food processing projects such as Mega Food Parks, Agro-Processing Clusters (APCs), Designated Food Parks (DFPs) and units set up in these MFPs, APCs and DFPs.
According to MoFPI, the value addition in agriculture and allied sector at constant 2011-12 prices is Rs 17.18 lakh crore and Rs 2.08 lakh crore in food processing sector during 2018-19 as per the latest release of estimates by National Statistical Office (NSO), Ministry of Statistics & Programme Implementation.
Further, a total of US$3745.54 million of FDI equity has been received in the sector during the last five years and current year (up to September 2019).