Production Linked Incentive scheme for Food Processing Industry

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A detailed operational guideline along with a portal has been issued by Ministry of Food Processing Industries (MoFPI) for Production Linked Incentive scheme for Food Processing Industry.

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As a part of central sector scheme Production Linked Incentive scheme(PLI) for Food Processing Industry will be implemented from 2021-22 to 2026-27 with an outlay of Rs. 10,900 crore to support creation of global food manufacturing champions.

In order to expand and raise the domestic manufacturing and bring down on import bills, PLI aims to give companies incentives on incremental sales from products manufactured in domestic units. Apart from inviting foreign companies to set business in India, the scheme also aims to motivate local companies to set up or expand existing manufacturing units.

The applicant for the PLI Scheme in Food Industry shall be (i) Proprietary Firm or Partnership Firm or Limited Liability Partnership (LLP) or a Company registered in India (ii) Co-operatives (iii) SME and making an application for seeking approval for coverage under the Scheme.

Applicant may also include company applying on its own behalf and its subsidiary/ies provided the applicant company holds more than 50% of the stock of its subsidiary/ies and that none of such subsidiary company/ies is included in any other applicant company under the scheme; or Marketing Federation or Apex level co-operatives applying on behalf of Member Unions or Member co-operatives in the case of co-operatives.

As mentioned above the sales based incentive under the scheme would be paid for six years from 2021-22 to 2026-27 on incremental sales over the base year. Base Year for calculation of Incremental sales would be 2019-20 for the first 4 years and for 5th & 6th years, the base year would be 2021-22 & 2022-23 respectively.

Sales shall include sales of permitted food products manufactured by the applicants as well its subsidiaries and contract manufactures. Applicants will be offered grant at 50% of expenditure on branding & marketing abroad subject to a maximum grant of 3% of Sales of food products or Rs 50 crore per year, whichever is less. The minimum expenditure for branding abroad shall be Rs. 5 crore over a period of five years.

Therefore the scheme of PLI is really good because Government cannot continue to make investments in the capital intensive sectors due to delay in giving returns; on the contrary it can invite Global companies to set up their units in our country.