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Priority Sector Lending in FPIs

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Priority Sector Lending in FPIs

  • As per RBI’s Master Directions, all food & agro- processing activities have been included as eligible under Priority Sector Lending (PSL).

Food Processing Sector

  • The Ministry of Food Processing Industries is implementing the Pradhan Mantri Kisan Sampada Yojana (PMKSY) for-
  1. Augmenting processing/preservation capacity,
  2. Creating off-farm employment,
  3. Leveraging domestic investment and increasing value addition to the economy.
  • Food processing sector is a labor intensive sector.
  • As per the Annual Survey of Industries (ASI) 2018-19, food processing was ranked 1st in total persons engaged in the manufacturing sector.

Special Fund for FPIs

  • A special fund of Rs.2000 crore has been set up in NABARD to provide credit at affordable rates to boost the food processing sector.
  • The loan is extended to:
  1. Individual entrepreneurs,
  2. Cooperatives,
  3. Farmers producer organizations,
  4. Corporates,
  5. Joint ventures,
  6. Special Purpose Vehicle and entities promoted by the Government
  • Objectives: Setting up of modernization, expansion of food processing units and development of infrastructure in designated food parks.

Investments in FPIs

  • PLI Scheme has been launched for creating global food champions through incentivizing investment in the food processing sector and creating employment.
  • Pradhan Mantri-Formalisation of Micro Enterprises (PM-FME) scheme is also being implemented since 2020-21 which aims at upgrading/formalizing 2 lakh micro informal units and creation of 9 lakh employment.
  • The government has permitted 100% FDI under the automatic route.
  • The total FDI received in the food processing sector since April 2014 till December 2021 is US$ 5.15 billion.
  • Through 582 completed projects under various component schemes of PMKSY, Rs. 8562.92 crore of investment has been leveraged.

Production Linked Incentive Scheme of Food Processing Industry (PLISFPI)

  • Formulated by the Ministry as part of “Atma Nirbhar Bharat Abhiyan” for enhancing India's manufacturing capabilities and enhancing exports.
  • The scheme has three broad components.

  1. The 1st component relates to incentivizing manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) including: a. Millet-based foods, b. Processed Fruits & Vegetables, c. Marine Products, d. Mozzarella Cheese.

  2. The 2nd component is intended for incentivizing innovative/ organic products of SMEs across all the above four food product segments including: a. Free Range - Eggs, b. Poultry Meat, c. Egg Products.

  3. The 3rd component relates to support for branding and marketing abroad to incentivize the emergence of strong Indian brands.

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