The Production Linked Incentive Scheme for Food Processing Industries (PLISFPI), approved by the Union Cabinet on March 31, 2021, with a substantial budget of ₹10,900 crore, has emerged as a transformative initiative in India’s food processing sector. Covering the financial years from 2021-22 to 2026-27, this scheme aims to strengthen domestic manufacturing, promote innovation, and enhance India’s presence in global food markets. So far, 171 applicants have been enrolled under the scheme, which emphasizes the use of locally grown agricultural products to benefit rural areas and farmers.
Key Features and Impact of PLISFPI
- Promoting Local Agricultural Products:
The scheme mandates the use of domestically grown agricultural produce (excluding additives, flavors, and edible oils), ensuring higher raw material procurement from rural regions. This has bolstered farmers’ incomes while creating significant off-farm employment opportunities. - Encouraging Innovation and Employment:
As of October 31, 2024, beneficiaries reported an investment of ₹8,910 crore across 213 locations, leading to the generation of over 2.89 lakh jobs. By fostering innovation and expanding production capacities, the scheme has become a cornerstone for India’s economic development. - Support for SMEs and MSMEs:
Recognizing the vital role of Small and Medium Enterprises (SMEs), the government provides financial, technical, and marketing support under various initiatives such as:
Pradhan Mantri Kisan Sampada Yojana (PMKSY)
Pradhan Mantri Formalization of Micro-Food Processing Enterprises (PMFME)
These schemes focus on capacity building, formalization of unorganized units, and access to credit. Within PLISFPI, 70 MSMEs are directly enrolled, and 40 others contribute as contract manufacturers, collectively strengthening the entire food processing value chain.
- Global Branding and Marketing Support:
Under the branding and marketing component, financial incentives are provided to promote Indian food brands in international markets. Beneficiaries are reimbursed 50% of branding and marketing expenses, capped at ₹50 crore annually or 3% of annual food product sales, whichever is lower. A minimum expenditure of ₹5 crore over five years is mandatory for eligibility. - Eligibility and Assistance Structure:
Category-I and II: Companies must achieve a minimum annual sales growth of 10% and make committed investments by the end of 2023-24 to qualify for incentives.
Category-III: Financial incentives for branding and marketing abroad are subject to compliance with the expenditure criteria.
Wider Economic Benefits
The scheme not only boosts India’s domestic manufacturing but also creates a ripple effect by enhancing value addition, promoting organic and millet-based products, and increasing exports. By focusing on rural and underdeveloped areas, it has effectively contributed to the balanced economic growth of the country.
Conclusion
PLISFPI reflects the government’s commitment to making India a global hub for food processing. By empowering SMEs, supporting farmers, and encouraging innovation, the scheme ensures sustainable growth and employment. As it progresses, it promises to be a game-changer for India’s rural economy and global competitiveness in the food processing sector.