01/03/2021 - Economic Survey

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KEY POINTS

Major initiatives

Prime Minister-Formalisation of Micro Food Processing Enterprises (PM-FME)

·        The scheme is expected to benefit 2 lakh micro food processing units through credit linked subsidy.

·        The Scheme adopts One District One Product (ODOP) approach to reap benefit of scale in terms of procurement of inputs, availing common services and marketing of products.

·        The Scheme also places focus on waste to wealth products, minor forest products and Aspirational Districts.

Operation Greens

·        A scheme for integrated development of Tomato, Onion and Potato (TOP) value chain” to provide support to farmers when prices of agri produce is low.

·        There is a provision for 50 per cent subsidy on cost of transportation and storage for evacuation of surplus production from producing area to the consumption center during the glut situation.

Production-Linked Incentive (PLI) Scheme

·        The approved financial outlay for the PLI scheme in food processing is ` 10,900 crores.

·        The food segments identified includes ready to eat/ready to cook, marine products, processed fruits & vegetables, mozzarella cheese, and innovative/organic products of SMEs.

·        The scheme would also support the branding and marketing abroad.

Please review,

Food Processing Sector (FPS) fulfils two objectives – value-addition and preservation of farm goods. It is a promising sector that requires high investments to meet the estimated $1 trillion demand in the Indian market by 2025. Success of FPS schemes is critical for doubling farmers’ income by 2025, reducing costs for consumers and bringing prosperity to rural India.

Some government initiatives are -

1.       ‘PM Kisan SAMPADA Yojana’ (2016) – an umbrella scheme for government initiatives

2.       Make in India – Policy ecosystem to attract financial, technological and human resources.

·         100% FDI in FPS under automatic route.

3.       Financial Incentives

·         Food Processing Fund – Rs. 2000 crore fund by NABARD

·         Production-Linked Incentive (PLI) – For export-oriented manufacturers of ready-to-eat, marine, organic food products etc.

·         Formalization of FPEs – Under Atma Nirbhar Bharat Abhiyan, credit-linked subsidy to 2 lakh micro-food enterprises for fulfilling ‘One District One Product’. 50% subsidy for marketing, at the State level.

4.       Food processing infrastructure

·         Mega Food Park – Set up in 50 acres of land with common processing and marketing facility to farmers, in a hub and spoke model

5.       Backward and forward linkages

·         Cold Chain Infrastructure – To preserve food from ‘farm to consumer’.

·         Operation Greens – For integrated development of Tomato, Onion and Potato (TOP) with focus on price stability and transportation subsidy, extended to notified horticulture items during 6 months in 2020.

The FPI sector is growing at 9.99% in the 5 years ending 2018-19, at a higher rate than agriculture and manufacturing industry. The government initiatives to provide infrastructure and financial support are timely, and will put India on a trajectory to fulfil its goal of prosperity and Atma Nirbhar Bharath.

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