Creation of Backward & Forward Linkages - Industrial Subsidy

The supply chain logistics of India are not upto the global standards. In order to plug the gaps and improve the supply chain, MoFPI has introduced this scheme to develop the backward and forward integration for processed food industry in terms of availability of raw material and linkages with the market.

Sectors covered under this scheme:

Following food processing sectors are eligible for benefits under the scheme:

Horticulture

Milk & Milk Products

Meat, poultry, fishery, marine and piggery

Ready to eat / Ready to cook food products

Honey, coconut, spices and mushroom

Retails stores for perishable food products

Pattern of Assistance:

The assistance is given in form of Grant-in-Aid towards the capital cost in the following manner.

For general areas grant-in-aid at 35% of eligible project cost

For North-East states and Difficult areas at 50% of eligible project cost

Maximum of Rs. 5 Crore per project.

Release of Grant

The first installment of 25% of the approved grant is released after ensuring that 25% of the promoter’s contribution and 25% of the term loan is spent on the eligible project cost.

The second installment of 40% of grant is released after ensuring utilization of first installment of grant released, 65% of promoter’s contribution and 65% of term loan.

The third and final installment of remaining 35% of the approved grant under the scheme is released after ensuring utilization of the second installment, 100% of promoter’s contribution and 100% of term loan.

Eligible Components of the Scheme

Backward Linkage:

Integrated Pack-house(s) (with mechanized sorting & grading line/ packing line/ waxing line/ staging cold rooms/cold storage, etc.)

Milk Chilling Centre(s) /Bulk Milk Cooler(s)

Pre Cooling Unit(s)/ Chillers

Reefer boats

Machinery & equipment for minimal processing and/or value addition such as cutting, dicing, slicing, pickling, drying, pulping, canning, waxing, etc.

Machinery & equipment for packing/ packaging.

Forward Linkage:

Retail chain of outlets including facilities such as frozen storage/ deep freezers/ refrigerated display cabinets/cold room/ chillers/ packing/ packaging, etc.

Distribution center associated with the retail chain of outlets with facilities like cold room/ cold storage/ ripening chamber.

Transport:

Refrigerated/ Insulated transport / Reefer Vans in conjunction with backward and forward linkages.

Important to remember

In case of non-adherence of time lines, a penalty of 1% of the quantum of installment amount due for release for that installment, will be imposed for each month’s delay.

The grant will be recalled in the following cases

In case of non-implementation of the project as per the guidelines of the approval letter.

If the assisted project stops its commercial operations within three (3) years from the date of commencement of commercial production of the project.

The Ministry will periodically review the progress of the projects under the Scheme.