Another bid to woo entrepreneurs

Vijay C Roy

Tribune News Service

Chandigarh, December 13

Once again, the Centre has extended its incentive scheme meant for setting up food processing units in a food park for three-and-a-half more months. Reason: a tepid response from agrarian states such as Punjab and Haryana.

This is the third time, the Ministry of Food Processing Industries has extended the deadline. Now, the date has been extended to March 31 from December 15. The Creation and Expansion of Food Processing and Preservation Capacities (CEFPPC) scheme, which is under the umbrella of the Pradhan Mantri Kisan Sampada Yojna (PMKSY), has now been extended to March 31, a government official said. Initially, it was June then extended to September and further to December 15.

Under the scheme, the maximum subsidy provided by the Centre is capped at Rs 5 crore and is available to the entrepreneurs who wish to set up a food processing unit at the mega food parks, agro-processing clusters or designated food parks. So far, the Centre could approve subsidy of six applicants in Punjab and Haryana.

Sources said as per the scheme, subsidy could be availed on plant and machinery and technical civil work, not on the land. This is the main reason why entrepreneurs are not opting for the scheme.

“The scheme states that promoters’ stake or capital expenditure in the project should not be less than 20 per cent. The non-inclusion of land in the project cost increases the promoter’s expenditure in setting up a unit. Since, land is not included in the project cost, the promoters’ expenditure goes up to 35 per cent in actual,” said an entrepreneur who wish to set up a unit in a food park. “So it is practically impossible for an SMEs to set up a unit,” he added.  

 To put up a unit, land is a basic requirement. But it becomes difficult for industrialists to make a huge capital investment at the first step — by investing in  land.

 “The small and medium entrepreneurs always have to struggle for capital and find it difficult to invest in the food park,” said a government official.

 The objective of the scheme is the creation of processing and preservation capacities and modernisation and expansion of existing food processing units with a view to increase the level of processing and value addition, leading to reduction of wastage.

 According to a 2015 study by the Central Institute of Post-Harvest Engineering and Technology, Ludhiana, the country’s post-harvest losses in fruits and vegetables were a staggering Rs 31,500 crore. Between 7-12% of vegetable production was wasted, it revealed.

 The processing of fruits and vegetables is critical for India due to its growing share in the agriculture production basket and recurrent price fluctuation affecting farmer incomes.

Food Parks in North 

State Units 

Punjab               Fazilka (operational), Ludhiana, Kapurthala

Haryana             Sonepat, Rohtak

Himachal            Una

J& K Pulwama