New Delhi: The Centre is planning to create a new financial institution which will exclusively fund food processing projects, minister of food processing industries Harsimrat Kaur Badal said on Monday.
According to senior ministry officials, the government is initially planning a single non banking financial company (NBFC) with 20% government equity investment amounting to Rs400 crore.
“The government will prepare a framework and invite proposals by July,” said J.P. Meena food processing secretary, adding “this will address the problem faced by processing units to whom banks are unwilling to lend due to high risks arising out of the seasonal nature of the industry”.
“The food processing sector has the potential to both create jobs and help farmers receive a better price,” Badal said during a briefing on the National Democratic Alliance (NDA) government’s four years in office.
Badal added that in the past year the ministry has received investment proposals totalling Rs1 trillion out of which investment worth Rs73,000 crore have “started grounding”.
According to the ministry, FDI inflow to the food processing sector totalled US $822 million between April and December, 2017.
Just about 10% of India’s farm produce is currently processed. Larger food processing capabilities can reduce India’s food losses estimated at a staggering Rs92,000 crore annually.
“In the last four years India’s annual food processing and preservation capacities increased 3.5 times to 1.6 million tonnes,” Badal said. She added that 122 projects approved under the Pradhan Mantri Kisan Sampada Yojana is expected to generate about 340,000 jobs.