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Production Linked Incentive Scheme for the Food Processing Industry

Production Linked Incentive Scheme for the Food Processing Industry

CONTEXT:

  • The Ministry of Food Processing Industries (MoFPI has launched an online portal for ‘Production Linked Incentive Scheme for Food Processing Industry’(PLISFPI).

Production Linked Incentives (PLI): Will the government's initiative really  reap benefits? - The Indian Wire

Production Linked Incentive Scheme for Food Processing Industry:

  • Central Sector Scheme: Government of India has approved a new Central Sector Scheme namely ‘Production Linked Incentive Scheme for Food Processing Industry’.

  • Implementation Period: During 2021-22 to 2026-27

  • Funding: Outlay of Rs. 10,900 crores

  • Objective: To support creation of global food manufacturing champions commensurate with India's natural resource endowment and support Indian brands of food products in the international markets.

  • Eligible Applicant: (i) Proprietary Firm or Partnership Firm or Limited Liability Partnership (LLP) or a Company registered in India (ii) Co-operatives; and (iii) SME and making an application for seeking approval for coverage under the Scheme.

  • 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.

    • For 5th & 6th years, the base year would be 2021-22 & 2022-23 respectively.

Three categories of Applicants:

  • Incentives and grants: Ministry of Food Processing Industries is inviting applications for availing sales based incentives and grants for undertaking Branding & Marketing activities abroad under the scheme from three categories of Applicants:

    1. Category-I: Applicants are large entities who apply for Incentive based on Sales and Investment Criteria.

      • Applicant under this category could undertake Branding & Marketing activities abroad also and apply for grant under the scheme with a common application.

    2. Category-II: SMEs Applicants manufacturing innovative/ organic products who apply for PLI Incentive based on Sales.

    3. Category-III: Applicants applying solely for grant for undertaking Branding & Marketing activities abroad.

PRODUCTION LINKED INCENTIVE (PLI) SCHEME:

PLI:

  • It was launched in March 2020 by the central government in order to

    • Boost domestic manufacturing and

    • Cut down on import bill.

Objectives:

  • To give companies incentives on incremental sales from products manufactured in domestic units.

  • To encourage local companies to set up or expand existing manufacturing units and inviting foreign companies to set shop in India.

Significance of PLI Scheme:

  • The idea of PLI is important as the government cannot continue making investments in these capital-intensive sectors as they need longer times to start giving the returns.

  • The electronics and pharmaceuticals themselves are large sectors and if the government can focus on labor-intensive Sectors like garments and leather, it would be really helpful.

SOURCE: PIB