PLI scheme for Food Processing Companies and what it means?

PLI scheme for Food Processing Companies and what it means?

by 5paisa Research Team Last Updated: Dec 11, 2022 - 12:36 pm 45.1k Views
Listen icon

Production Linked Incentive (PLI) scheme of the government of India is one of the most ambitious schemes sponsored by the central government to boost domestic production, enhance self-sufficiency and to also eventually emerge as a production base where global companies can manufacture in India and use India as an export hub.

In the latest round of approvals, the government has given the go ahead for PLI benefits to several food processing companies. A total of 60 companies had applied across the food processing value chain including fruits, vegetables, marine products, cheese production etc. The companies that have got approval read like a virtual who’s who roster of the food processing industry.

Some of the companies to immediately benefit from the production linked incentive (PLI) scheme for the food processing industry are names like Britannia, Haldiram, Amul and ITC, among others.

The total outlay for the PLI scheme for the food processing industry alone is pegged at a whopping Rs.10,900 crore and is expected to have a multiplier effect on production in India. 

The incentives offered under the PLI scheme are linked to domestic production and sale of food products. The government believes that this one of the sectors where India can build a global competitive edge.

After all, names like Amul and Haldiram are purely home grown names which have become globally accepted brands. This project will eventually assist the launch of Indian brands in the global markets. 

The PLI scheme for the food processing sector broadly covers 4 segments as under.

1) Ready-to-cook or ready-to-eat foods
2) Processed fruits and vegetables
3) Marine products
4)  Mozzarella cheese.

To begin with, the government has only granted approvals to Category 1 players, which hare essentially the large players in the food processing category that can undertake branding and marketing activities on their own. To avail of the PLI incentives, the collateral investments in plant and machinery have to be done in FY22 and FY23.

According to the media release put out by the Ministry of Food processing, the implementation of the scheme will facilitate expansion of processing capacity to generate food output worth Rs.33,494 crore. It is also expected to generate over 2.5 lakh jobs over the next 6 years. The scheme has been rolled out on an all-India basis.

The incentives under the scheme will be paid for 6 years till FY27 completion. Maximum incentives payable to beneficiary will be approved in advance by the Project Management Agency and even the cost structures for companies will be approved in advance. The scheme will be implemented over a 6-year period from 2021-22 to 2026-27.

How do you rate this blog?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

oda_gif_reasons_colorful

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Enjoy 0%* Brokerage with 5paisa
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Market Outlook for 23 April 2024

Nifty started the week on a positive note above 22300 mark. The index consolidated within a range throughout the day and ended around its day’s high above 22350 with gains of a percent. Nifty Today:

Market Outlook for 22 April 2024

Our markets corrected sharply in the week gone by mainly due to uncertainty over global geopolitical tensions and selling by the FIIs which resulted in the index breaking the 22000 mark. However, we witnessed recovery from the low of 21780 in the last trading session and Nifty ended around 22150 with a weekly loss of over one and a half percent.

Stock in Action - Escorts Kubota Ltd

Escorts Kubota Stock Movement of Day