Cabinet approves Production Linked Incentive Scheme for Food Processing Industry

The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the Central Sector Scheme - "Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)" to support the creation of global food manufacturing champions commensurate with India's natural resource endowment and support Indian brands of food products in the international markets with an outlay of Rs. 10900 crore.
Objectives of the Scheme:

• The objectives of the Scheme are to support food manufacturing entities with stipulated minimum Sales and willing to make a minimum stipulated investment for expansion of processing capacity and Branding abroad to incentivise emergence of strong Indian brands.:
• 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 incentivizing manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) foods, Processed Fruits & Vegetables, Marine Products, Mozzarella Cheese.
• Innovative/ Organic products of SMEs including Free Range -Eggs, Poultry Meat, Egg Products in these segments are also covered under the above component.
• The selected applicant will be required to undertake investment, as quoted in their Application (Subject to the prescribed minimum) in Plant & Machinery in the first two years i.e. in 2021-22 & 2022-23.
• The 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.
• Scheme will be implemented over a six year period from 2021-22 to 2026-27.

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

Financial Implications:

Segment-wise and Year-wise outlay under Productivity Linked Incentive Scheme
(Rs Crore)
	RTC/ RTE Foods	Processed F&V	Marine Products	Mozzar ella Cheese	Incentive on Sales		Branding & Market-ing Abroad			Admn Cost		Total
2021-22	0	0	0	0	0		0			10		10
2022-23	280	272	58	20	630		375			17		1,022
2023-24	515	468	122			40		1145	375		17	1,537
2024-25	745	669	185			63		1662	275		17	1,954
2025-26	981	872	246			70		2169	250		17	2,436
2026-27	867	701	212			54		1833	125		17	1,975
2027-28	794	601	170			36		1601	100		15	1,716
Total	4181	3582	993			283		9040	1500		110	10,900*
*This includes Rs.250 crore (Approx 2% outlay) which has been earmarked for Innovative/ Organic products in the SME Sector, including Free range Eggs, Poultry Meat , Egg Products, which may come from any/ all of the Segments.

Implementation strategy and targets:

• The scheme will be rolled out on All India basis.
• The scheme shall be implemented through a Project Management Agency (PMA).
• The PMA would be responsible for appraisal of applications/ proposals, verification of eligibility for support, scrutiny of claims eligible for disbursement of incentive.
• The incentive under the scheme would be paid for six years ending 2026-27. The incentive payable for a particular year will be due for payment in the following year. The duration of the scheme will be six years i.e. 2021-22 to 2026-27.
• The scheme is "fund-limited", i.e. cost shall be restricted to the approved amount. The maximum incentive payable to each beneficiary shall be fixed in advance at the time of approval of that beneficiary. Regardless of achievement/ performance, this maximum shall not be exceeded.
• The implementation of the scheme would facilitate expansion of processing capacity to generate processed food output of Rs 33,494 crore and create employment for nearly 2.5 lakh persons by the year 2026-27.

Implementation of the Scheme:

• The Scheme would be monitored at Centre by the Empowered Group of Secretaries chaired by the Cabinet Secretary
• Ministry of Food Processing Industries would approve selection of applicants for coverage under the scheme, sanction and release of funds as incentives.
• The Ministry will prepare Annual Action Plan covering various activities for implementation of the scheme.
• A third-party evaluation and mid-term review mechanism would be built in the programme.
• National Portal & MIS:
• A National level portal would be set-up wherein the applicant enterprise could apply to participate in the Scheme.
• All the scheme activities would be undertaken on the National portal.

Convergence Framework
Under Pradhan Mantri Kisan Sampada Yojana (PMKSY) implemented by MoFPI, small and medium food processing enterprises are supported in terms of strengthening of supply chain infrastructure, expansion of processing capacities, augmenting availability of industrial plots, facilitating skill development, R&D, provision of testing facilities etc