Production linked incentive scheme
Source : PIB
GS II : Food processing and related industries in India- scope and significance, location, upstream and downstream requirements, supply chain management

Why in News?

The Ministry of Food Processing Industries (MoFPI) has issued detailed operational scheme guidelines and has launched an online portal for Production Linked Incentive Scheme for Food Processing Industry (PLISFPI). 

Key Facts

• As a part of Aatmanirbhar Bharat Abhiyan, Government of India has approved a new Central Sector Scheme namely Production Linked Incentive Scheme for Food Processing Industry.
• Union Ministery for Food Processing Industries launched and online portal for the beneficiaries.
• The scheme invites foreign companies to set up units in India aims
  • It also aims to encourage local companies to set up or expand existing manufacturing units
  • Also to generate more employment
  • Also cut down the country’s reliance on imports from other countries.
• Processed food can be exported that may help us in getting foreign exchange reserves.

Production Linked Incentive Scheme for Food Processing Industry

To support creation of global food manufacturing champions with India’s natural resource endowment and support Indian brands of food products in the international markets with an outlay of Rs. 10900 crore.

• It was launched in April 2020, for the Large Scale Electronics Manufacturing sector, but later towards the end of 2020 was introduced for 10 other sectors.
• This scheme was introduced in line with India’s Atmanirbhar Bharat campaign.
• Scheme will be implemented over a six year period from 2021-22 to 2026-27.

Objectives of the Scheme

• Support creation of global food manufacturing champions
• Strengthen select Indian brand of food products for global visibility and wider acceptance in the international markets
• Increase employment opportunities of off-farm jobs
• Ensuring remunerative prices of farm produce and higher income to farmers

Salient features

• The first component relates to incentivising manufacturing of four major food product segments
  1. Ready to Cook
  2. Ready to Eat (RTC/ RTE) foods
  3. Processed Fruits & Vegetables
  4. Procesed Marine Products, Mozzarella Cheese
• Investment made in 2020-21 also to be counted for meeting the mandated investment.
• The conditions of stipulated Minimum Sales and mandated investment will not be applicable for entities selected for making innovative/ organic products.
• The second component relates to support for branding and marketing abroad to incentivise emergence of strong Indian brands.
• For promotion of Indian Brand abroad, the scheme envisages grant to the applicant entities for – in store Branding, shelf space renting and marketing.

How the scheme helps the economy?

• The implementation of the scheme would facilitate expansion of processing capacity to generate processed food output of Rs 33,494 crore.
• Create employment for nearly 2.5 lakh persons by the year 2026-27.

Food processing sector in India

• The food processing sector in India encompasses manufacturing enterprises in all the segments from micro to large industries.
• It accounts for 32 per cent of the country’s total food market.
  • It considered to be largest industries in India and is ranked fifth in terms.
• Food processing units acts as a link between agriculture and industries.
• International Competition
  • India ranks 1st in the production of milk, ginger, banana, guava, papaya, mango
  • 2nd in the production of rice, wheat, potato, sugarcane, cashew nut, tea

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