The Union Minister of State for Food Processing Industries recently revealed that by 2020, the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) aspires to establish direct and indirect employment opportunities for 530,500 individuals. PMKSY is built on seven key schemes aimed at enriching agriculture, modernising processing methods, and reducing agri-waste. This involves an investment subsidy in the form of grants-in-aid ranging from 35% to 75% of the eligible project cost.
Introduction to Pradhan Mantri Kisan SAMPADA Yojana
In 2016, the Ministry of Food Processing and Industries (MoFPI) launched a comprehensive scheme titled “Agro-Marine Processing and Development of Agro-Processing Clusters” or SAMPADA. The scheme was assigned Rs. 6,000 crore to be utilized over the period from 2016 to 2020. A year later, in 2017, the government rebranded the SAMPADA scheme to Pradhan Mantri Kisan Sampada Yojana (PMKSY). The main objective of PMKSY is to enhance agriculture practices, modernize processing mechanisms, and reduce Agri-Waste.
Components of PMKSY
PMKSY operates on seven pillar schemes that are designed to achieve its primary objectives. These schemes are Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure, Infrastructure for Agro-Processing Clusters, Creation of Backward and Forward Linkages, Creation/Expansion of Food Processing & Preservation Capacities, Food Safety and Quality Assurance Infrastructure, and Human Resources and Institutions.
Another primary aspect of the PMKSY plan is that it provides a capital subsidy to investors who contribute to the infrastructure and logistics of the food processing units in the country.
Other steps taken in the Food Processing Sector
The government has introduced 100% Foreign Direct Investment (FDI) for manufacturing food products and retail trading, including e-commerce. This FDI applies to food products produced and/or manufactured domestically in India. Additionally, a special fund of Rs.2000 crore was established with the National Bank for Agriculture and Rural Development (NABARD) to supply inexpensive credit for food processing projects.
| Food & agro-based processing units | Agriculture activity for Priority Sector Lending (PSL) |
|---|---|
| Income Tax exemption on profit for new units | 100% |
| Income tax exemption by Farmers Producers Organizations (FPOs) | 100% |
| Goods & Service Tax (GST) rates for most food products | Low |
A New Central Sector Scheme
Along with these measures, the government launched a new Central Sector Scheme, “Operation Greens,” to promote integrated development of Tomato, Onion, and Potato (TOP) crops value chain. The scheme, which comes with an outlay of Rs.500 Crore, is designed to promote FPOs, agri-logistics, and processing facilities.