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Govt approves eight FDI proposals of US$700 million
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Monday, 11 March, 2019, 08 : 00 AM [IST]
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 The Ministry of Food Processing Industries (MoFPI) in the last five years has been able to create a distinct identity for itself.
Previously, the MoFPI was given meagre budgetary allocations, now it has close to Rs 1,500 crore annual budget besides some ambitious plans. With the Union government focussing on doubling farmers' income, food processing has taken the centre stage. MoFPI has come up with several schemes like Kisan Sampada and Kisan Samridhi focussing directly on primary processing and reducing food wastage. The ministry also hosted India's largest food fair in 2017 aimed at attracting investment into the food processing sector. In an email interaction with Ashwani Maindola, Minister of State for Food Processing Industries Sadhvi Niranjan Jyoti reflected upon the work done by the ministry under her tenure. Excerpts:
Ministry of Food Processing Industries is planning to devise a new scheme with Rs 3,000 crore corpus for MSME sector. This fund shall be used for making credit available to smaller food processing units across the country and for transfer of technologies. Elaborate.
The Ministry is working on a World Bank-assisted new Centrally-sponsored scheme - Gram Samridhi Yojana to enhance the entrepreneurial capability and business ecosystem of the micro segment of the food processors (unorganised sector). The scheme is expected to get the approval of the government very soon. The salient features of the scheme are as under:
- New Centrally-sponsored scheme with World Bank assistance at an outlay of Rs 3,000 crore (Rs 1,500 crore World Bank assistance + Rs 1,000 crore Central govt share + Rs 500 crore state govt share)
- Pilot project in four states of Punjab, Andhra Pradesh, Maharashtra and Uttar Pradesh
- Nearly 25 lakh food processing enterprises in the unorganised sector to be targeted as the scheme is scaled up
- There is a provision to extend financial assistance to 70,000 micro enterprises @ 50% of the eligible project cost subject to a maximum of Rs 5 lakh for expansion and upgradation of their units
- Micro enterprises will be supported with a package of services viz. skill development, technology support, entrepreneurship development, provision of common facilities, food testing and handholding for commercial linkages.
- Support to be extended to these units will benefit the rural population including farmers and their families in terms of increasing their income through diversification of job opportunities and aid in achieving the government declared objective of doubling farmers’ income.
- This scheme offers a huge opportunity for not only addressing the issue of food wastage but also creating employment and increasing income of farmers.
The government launched Sampada scheme under MoFPI to develop the food processing clusters as mini food parks. How the ministry is taking forward this programme and how many such mini food parks have been constituted thus far?
The scheme for Infrastructure for Agro-Processing Cluster (APC) is very attractive and ambitious component of Pradhan Mantri Kisan Sampada Yojana (PMKSY) as this can be setup in a smaller area of 10 acre of land as against 50 acre of land in the case of Mega Food Parks. The scheme has received good response and so far 33 projects have been approved in various parts of the country.
The government has also launched the Operation Greens for resolving the issues related to the perishable farm produce of Tomato, Onion and Potato (TOP). What has been the progress in this programme?
This is a scheme announced in the Budget 2018-19 and after a marathon of consultation with various stakeholders including industries, farmers, farmer producer organisations (FPOs), NAFED, ICAR and such other agencies involvement of which is necessary for implementation of the scheme, the scheme guidelines were finalised and put in the public domain in November 2018 to solicit proposals from the general public viz; individuals, farmers, FPOs, Central/states PSUs and the like. Meanwhile, three proposals have been approved for development of value chain in the states of Gujarat and Andhra Pradesh. Two proposals in Gujarat have been approved for Potato and Onion and the third proposal is for Tomato in the state of Andhra Pradesh.
One of the ambitious programmes of the MoFPI was Mega Food Park. What is the current status of the programme and how has been the progress of this project since 2014 and how much time it would take to complete the 42 Mega Food Parks?
By May 2014, whereas only two MFPs were made operational as on date 17 MFPs have been made operational i.e. 15 new MFPs have been made operational over a period of 55 months. In all, 40 MFPs have been approved in various parts of the country and action to setup two more Mega Food Parks have been taken. We expect all the 42 Mega Food Parks will be operational in next two to three years as normally 30 months’ time is given for completion/operation of the project.
What are the plans of your ministry on cold chain front, which is also part of the ministry’s backward-forward linkage programme?
The Ministry is already implementing a scheme for providing assistance for cold chain infrastructure in the country. Cold chain infrastructure scheme is one of the most successful and attractive schemes of the Ministry with high demand. So far Ministry has approved 304 projects all across the country of which 135 have been completed. This mostly serves as the backward linkage in the food supply/value chain. The Ministry is also implementing a scheme called ‘Creation of Backward & Forward Linkages’. This not only addresses the backward linkage but also provides formidable forward linkage in the supply/value chain.
Recently the MoFPI has proposed recognition of NIFTEM and IIFPT as institute of national importance. What has been the progress in this regard and what is the objective behind this move. Tell us if there are plans for establishing more such institutions in the country, given the fact that ‘two’ is a small number for such a vast country and opportunities in food processing.
To bring in professional excellence in the field of food technology and entrepreneurship and create world class institutes for this, government has introduced the NIFTEM Bill in Rajya Sabha during the last session of Parliament in February 2019 to accord Institute of National Importance (INI) to two of its institutes i.e., National Institute of Food Technology Entrepreneurship and Management (NIFTEM) and Indian Institute of Food Processing Technology (IIFPT).
At present, government has no plan to setup any more such institutes.
Primary processing has been seen as the first step for enabling the food processing industries to usher its complete potential. What has been the ministry’s efforts in this direction?
The PMKSY offers wholesome solutions to the entire food supply/value chain from farm gate to consumer without break in supply chain and as such it addresses the primary processing problems. The Mega Food Parks and the APC projects has the provision to create facilities for primary processing. Also, the cold chain projects are involved in primary processing.
World Food India has put India on world map for its food processing potential. How much investment has been started implanting thus far, of the US$14 billion MoUs signed during the summit in 2017?
According to Invest India report of the signed MoUs worth US$13.56 billion, investment of US$1.75 billion has been grounded so far.
There has been a dedicated facilitation center at the Invest India for handling and help the projects and investment for food processing in the country. Elaborate on the work done by the facilitation centre.
Invest India provided sector-specific and state-specific information to a foreign investor, assisted in expediting regulatory approvals, and offered hand-holding services. Its mandate also includes assisting Indian investors to make informed choices about investment opportunities overseas. It facilitated meetings with relevant government and corporate officials and organised investment roadshows and roundtables. Invest India also provides aftercare services that include initiating remedial action on problems faced by investors by involving the government departments concerned. It interacted with state governments (who is also a stakeholder in the organisation) and private industry organisations.
How has been the progress in Foreign Direct Investment in food processing under your government, since 2014? Share year-wise figures for this. What are the efforts taken up by the ministry in this regard?
In addition to permission for 100% FDI in food processing sector through automatic route, the present government permitted 100% FDI in food retail trade, including through e-commerce, through government approval route for food products produced or manufactured in India since June, 2016. The year-wise inflow of FDI equity in the food processing sector since 2014-15 till December 2019 (the latest information) is as under: Year
(April-March)
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FDI
(In USD Million)
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2014-15
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515.86
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2015-16
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505.88
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2016-17
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727.22
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2017-18
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904.90
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2018-19
(Apr- Dec)
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367.88
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Source: Department of Industry Promotion and Internal Trade
MoFPI has allowed 100% FDI in food retail. What has been the progress in this regards and which are the proposals given approval and how much investment the ministry is expecting to brought into the sector through this decision?
Government of India has approved eight FDI proposals of approximately US$700 million after permitting 100% FDI in food retail trade, including through e-commerce, through government approval route for food products produced or manufactured in India since June, 2016. Amazon India Private Limited, Supermarket Grocery Supplies Private Limited, Grofers India Private Limited, MTR Foods Private Limited, Mountain Trail Foods Private Limited, Supr Infotech Solutions Pvt. Ltd., Enayat Enterprise Private Limited and WayCool Foods and Products Private Limited have been allowed 100% FDI in food retail trade.
The Ministry also mooted formation of the non-banking financial institution for the food processing sector with a fund corpus of Rs 2000 crore. But this plan was not approved by the PMO. How the ministry will ensure the credit availability for the sector in low interest?
Cold chain infrastructure and agro-processing have been brought under ambit of priority sector lending since April 2015. A Special Food Processing Fund of Rs 2,000 crore has been created with NABARD since 2014-15 for providing affordable credit facility to designated food parks and units set up therein.
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