Food Processing Min seeks Rs 1,000 cr budgetary support

The Food Processing Ministry has sought budgetary support of Rs 1,000 crore next fiscal to help promote various schemes aimed at attracting private participation in the development of the sector.

"This is a crucial stage for the sector (as investors are coming forward). We have asked for Rs 1,000 crore allocation for next fiscal. Some very serious thoughts are going on at the highest level of the government to give the sector a priority," Food Processing Industries Secretary Ashok Sinha told PTI here.

Sinha said although the Finance Ministry had allocated Rs 380 crore for the sector this fiscal, the actual disbursement so far is only Rs 240 crore.

"I admit that we could not do well. It's because, we were busy framing schemes to spend them for the first two years. Only when the money is allocated to you, you can frame them. Private parties have to be encouraged to participate," he said.

For the first three years of the current plan period (2007-12) the Food Processing Ministry was allocated Rs 880 crore, out of a total of Rs 4,031 crore envisaged for this time.

"However, we could not spend the entire Rs 880 crore allocated to us. We spent less and that is Rs 680-700 crore. Now, we have a feeling that the time for a quantum jump has come," Sinha said.

"Higher allocation would enable us to promote schemes in a major way and help the country save the staggering wastages in fruits and vegetables," he said.

When asked as to how the ministry plans to use the funds, citing mega food parks, to which the ministry extends support of Rs 50 crore each, Sinha said if 10 of them come up, the ministry will need to spend Rs 500 crore.

"People are now ready to invest in the sector. FDI in the sector has been increasing of late. Earlier, we used to receive FDI in the range between Rs 2,000 crore and Rs 4,000 crore a year. This has significantly gone up in the first eight months of the current fiscal to more than Rs 9,000 crore," Sinha said.

According to industry estimates, India loses over Rs 55,000 crore worth of harvested produce-- mostly vegetables and fruits annually due to poor infrastructure, which includes cold chain, packaging materials and transport among others.

The country is able to process only 2 per cent of its total production, which is way below Malaysia and the Philippines that do around 80 per cent.