PLI SCHEME FOR FOOD PROCESSING INDUSTRY
Context
Union Cabinet has approved the Central Sector Scheme – “Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)” entailing an outlay of Rs. 10,900 crore
BACK TO BASICS
What is the production linked incentive scheme?
o In order to boost domestic manufacturing and cut down on import bills, the central government last year introduced a schemes that aims to give companies incentives on incremental sales from products manufactured in domestic units.
o Apart from inviting foreign companies to set shop in India, the scheme also aims to encourage local companies to set up or expand existing manufacturing units.
o PLI Scheme has also been approved for sectors such as automobiles, pharmaceuticals, IT hardware including laptops, mobile phones & telecom equipment, white goods, chemical cells and textiles, etc.
Need of these schemes
o According to experts, the idea of PLI is important as the government cannot continue making investments in these capital intensive sectors as they need longer times for start giving the returns.
o Instead, what it can do is to invite global companies with adequate capital to set up capacities in India.
Objectives of the PLISFPI
o To support creation of global food manufacturing champions.
o To strengthen select Indian brands of food products for global visibility and wider acceptance in the international markets.
o To increase employment opportunities of off-farm jobs.
o To ensure 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 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.
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.