Govt plans to set up NBFC with Rs 20 billion to fund food processing firms

The government has planned to set up a non-banking financial company (NBFC) with an initial corpus of Rs 20 billion to fund food processing industries as part of its effort to boost this sector and double farmers income, Union Cabinet minister for Food Processing Harsimrat Kaur Badal said on Friday.

Addressing a CII event, Badal said the government has inaugurated 15 mega food parks in last four and half years out of 42 sanctioned, in contrast to mere 2 parks between 2008 and 2014 during the UPA regime.

"We are setting up a fund for lending to food processing industries," she said at the event.

On the sidelines, the minister said that she would hold consultation with the finance ministry on setting up of this NBFC. The proposal would also be put before the Cabinet for approval.

Asked about the size of the fund, Badal said the initial corpus would be Rs 20 billion, but the same would increase significantly later.

Earlier, at the event, she highlighted the initiatives taken by her ministry is the last four and half years for the growth of this sector.

The minister said the food processing sector is attracting $1 billion (around Rs 70 billion) foreign direct investment (FDI) annually now.

"There has been 350 per cent increase in food processing capacity and 720 per cent increase in cold chain capacity. We have created 5 lakh jobs and capacity to process Rs 1 lakh crore worth agriculture produce," she said.

She said that her focus had been on implementing all the schemes on the ground.

On mega food parks, she said 35 out of 42 parks would be operational by the end of next fiscal year.

Badal said the ministry is also providing Rs 100 million subsidy for setting up of mini food parks near agriculture clusters.

The minister asked the industry to help farmers in setting up of co-operatives and Farmer Producer Organisations (FPOs) so that they can access the benefits and subsidy programmes run by the government.

"We need private sector help for setting up of co-operatives and FPOs. We have money. Connect them to us," she said, while exhorting the industry.

Badal termed food processing as "golden sector" and said India has the potential to become world food factory.