Production Linked Incentive (PLI) Scheme for Food Processing Industry

Production Linked Incentive (PLI) Scheme for Food Processing Industry

What is Production Linked Incentive (PLI) Scheme

Govt. of India has introduced the scheme in April 2020 for large scale electronics manufacturers in India. By November, 2020 the scheme was extended to following Sectors

Sl. No.	Sector	Implementing Ministry / Dept	Allocated Budget(in Crores)
1	Advance Chemistry Cell (ACC) Battery	NITI Aayog and Department of Heavy Industries	18100
2	Electronic/Technology Products	Ministry of Electronics and Information Technology	5000
3	Automobiles & Auto Components	Department of Heavy Industries	57042
4	Pharmaceuticals drugs	Department of Pharmaceuticals	15000
5	Telecom & Networking Products	Department of Telecom	12195
6	Textile Products: MMF segment and technical textiles	Ministry of Textiles	10683
7	High-Efficiency Solar PV Modules	Ministry of New and Renewable Energy	4500
8	White Goods (ACs & LED)	Department for Promotion of Industry and Internal Trade	6283
9	Speciality Steel	Ministry of Steel	6322

On 02.05.2021 the Govt. has extended the scheme to Food processing Industry to encourage Food processing businesses in India. The implementation of the scheme will be in 2021-22 to 2026-27 period with an outlay of Rs. 10,900 crore. The scheme is being implemented by Ministry of Food Processing Industries

The objective of the Production Linked Incentive (PLI) Scheme for Food Processing Industry is to support the creation of global food manufacturing champions; promote Indian brands of food products; increase employment opportunities for off-farm jobs, ensure remunerative prices of farm produce and higher income to farmers.

EOI Opening Date: 02.05.2021

Last Date for Application: 17.06.2021

Period of the scheme: 2021-22 to 2026-27

Components of the Scheme

1. Incentivizing manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) including millet-based foods, Processed Fruits & Vegetables, Marine Products & Mozzarella Cheese.
2. Incentivizing Innovative/ Organic products of SMEs across all the above four food product segments including Free Range - Eggs, Poultry Meat & Egg Products.
3. Support for branding and marketing abroad

Food Product Segments eligible for the scheme

1. Ready to Cook/ Ready to Eat (RTC/ RTE) including millet-based foods
2. Processed Fruits & Vegetables
3. Marine Products
4. Mozzarella Cheese

Categories of companies and eligible components

• Category 1: Large Enterprises Eligible for Component 1 and 3
• Category 2: SMEs Eligible for component 2
• Category 3: Any Enterprise. Eligible for component 3

Common Eligibility Criteria for Production Linked Incentive (PLI) Scheme

• Applicants engaged in manufacturing of food products in India
• Food products should be sold in consumer packs
• Applicant can also include products which are not being manufactured at present but intends to start manufacturing within the project period
• Entire processing should be completed in India (including primary processing of food grains)
• Applicant shall specify the entire manufacturing process in the application starting from sourcing of raw materials

 

Eligibility Criteria – Category 1

- Minimum Sales and Investment Criteria

Segment	Minimum Sales in 2019-20	Minimum Investment upto 2022-23
RTE / RTC	Rs. 500 Cr	Rs. 100 Cr
Processed Fruits & Vegetables	Rs. 250 Cr	Rs. 50 Cr
Marine	Rs. 600 Cr	Rs. 75 Cr
Mozzarella Cheese	Rs. 150 Cr	10 MTPD plant – Rs 23 Cr

Eligibility Criteria – Category 2

• Should be Udyami Registered
• should engage in such activities for innovative/ organic food products
• Should have achieved Minimum Sales of Rs 1 crore during 2019-20
• Applicant should be registered with APEDA for the respective organic product

Eligibility Criteria – Category 3

• Only Indian Brands are covered for selling food products completely manufactured in India
• Branding & Marketing shall be undertaken either by the Applicant directly or through its subsidiary or any other Agency
• Indicative list of activities covered under Branding & Marketing are In-store Branding, Shelf Space Renting, Listing Fee, Electronic/Social Media and Print Media, outdoor publicity, billboard, commercial advertisement on channels etc
• Expenditure will not cover trade discounts, expenditure incurred on distribution, and overseas logistics expenditure

Incentive Calculation & Disbursement for Category 1 & 2:

• Incentive = Incremental sales in approved product segment X Rate of Incentive
• Incremental Sales for a particular Year means Sales in that Year less the Sales of the corresponding period in the Base year.
• Incentive is given every year in the program period (2021-22 to 2026-27)

Rate of Incentive

Rates of Incentives on Incremental Sales
Year	RTC/RTE	Processed F & V	Marine Products*	Mozzarella Cheese
2021-22	10%	10%	6%	10%
2022-23	10%	10%	6%	10%
2023-24	10%	10%	6%	10%
2024-25	10%	10%	6%	8%
2025-26	9%	9%	5%	6%
2026-27	8%	8%	4%	4%
* 10% Incentive Rate for Value Added Marine products, as specified at Appendix-B for all 6years.

Conditions for disbursement of Incentive

1. Achieve minimum CAGR in Sales over the base year for individual product group
2. Complete the Committed Investment, year-wise, as proposed in the Application
3. Applicant entities selected for multiple product segments would be required to meet minimum growth in Sales and investment segment-wise
4. 10% of the Incentive due for Y1 and Y2 will be deducted- if the applicant fails to complete the investment as Committed. If at the end of Y2, the Committed Investment is completed, then the amount deducted for Y1 would be paid to the company. By the end of Y3, if the Committed Investment is not completed, the selected Applicant will be taken out from PLIS
5. The assessment of incremental Sales shall be based on statutory filings with Government Departments/ Agencies and audit reports and other documents
6. Incentives under the scheme for a particular year will be disbursed in the following year

Incentive Calculation & Disbursement for Category 3

1. Rate of Subsidy : 50% of expenditure on Branding & Marketing abroad
2. Max Cap: 3% of Sales of food products or Rs. 50 cr per year (whichever is less)
3. Minimum Admissible expenditure: Rs. 5 Cr (Subsidy of Rs. 2.5 Cr)
4. Branding Expenditure, of an Applicant, for a Year will be reimbursed in the following year
5. Incentive is given every year in the program period (2021-22 to 2026-27)

Our Unique Services

1. Preparation of Detailed Project Reports (DPR)
2. Layout Drawings
3. Facilitating various permissions required from various Govt. Departments
4. Error free application processing for various subsidies and incentives
5. Facilitating the arrangement of subsidies and incentives from Govt. Departments
6. Advisory on Purchase of Machinery / Technology and Civil works