Background Note “Scheme for Creation/ Expansion of Food Processing and

Preservation Capacities” (CEFPPC)

Government of India (GoI) has approved a new Central Sector Scheme –

Pradhan Mantri Kisan Sampada Yojana (PMKSY) for the period upto 2019-20 to be
implemented by Ministry of Food Processing Industries (MoFPI). Under PMKSY, a new
Scheme for Creation / Expansion of Food Processing & Preservation Capacities
(CEFPPC) has been approved. The operational guidelines of the scheme have been
notified on 11.07.2017 and uploaded on Ministry’s website on 12.07.2017. After detailed
interactions with the stakeholders, the operational guidelines for implementation of the
Scheme for Creation / Expansion of Food Processing & Preservation Capacities have
further been revised and latest modified guidelines issued on 29.08.2019. Under this
scheme, 400 food processing units are to be sanctioned up to 2019-20 with an
allocation of Rs. 1290 crore.

Objective:

The main objective of the Scheme is for promotion of processing / preservation of

agro food products and modernization /capacity enhancement of food processing units
which will help in increasing the level of processing, value addition thereby reduction of
wastage. The processing activities to be undertaken by the individual units will cover a
wide range of post-harvest processes resulting in value addition and/or enhancing shelf
life with specialized facilities required for preservation of perishables. Induction of
modern technology will make a clear difference in both process efficiencies as well as
quality of the end product.

Pattern of Assistance:

The scheme envisages financial assistance to food processing units in the form
of grant-in-aid as under:
  35% of the eligible project cost subject to a maximum of Rs. 5.00 crore in
General Areas; and

 50% of the eligible project cost subject to a maximum of Rs. 5.00 Crores in SC /
ST promoter(s), North Eastern States including Sikkim and Difficult areas
including Himalayan States (Himachal Pradesh, J&K & Uttarakhand), State
Notified ITDP areas and Islands.

Eligible organizations:

(i). Organizations such as Central and State PSUs / Joint Ventures / Farmer Producer
Organizations (FPOs)/ NGOs / Cooperatives / SHG’s / Public and Pvt. companies /
limited liability Partnerships, corporate entity/ proprietorship firms / Partnership firms
engaged or propose to engage in creation/ expansion/ modernization of food processing
and preservation capacities would be eligible for financial assistance under the scheme.

(ii). Proposals received from Scheduled Caste (SC)/ Scheduled Tribe (ST) promoters
holding 100% stake in the implementation Agency/ applicant organization, will be
treated as SC/ST proposals. Such implementation agency/ applicant organization will
be treated at par with the difficult areas for the purpose of extending benefits under the
scheme.

Eligibility Criteria:

Before submitting the grant application, applicant shall ensure fulfillment of following
eligibility criteria to avail grant in aid under the scheme:

(i). The promoter’s capital/ equity investment on the project should not be less than 20%
of the total project cost (excluding land cost) in case of general areas and 10% of the
total project cost (excluding land cost) in case of NER, difficult areas, SC, ST and
islands
(ii). Availing term loan from the bank/ Financial Institution minimum 20% of the total
project cost (except for proposals submitted by Central/State Government)

(iii). Only those proposals shall be eligible in which final sanction of term loan has been
accorded by the Banks/Financial Institutions after the date of advertisement of EoI of
this Scheme. Further, disbursement of term loan and its utilization shall be only after the
date of issue of sanction / approval letter by the Ministry.

(iv). Proposals (in Mega Food Parks (MFPs), Agro-processing Clusters assisted by the
Ministry and in designated food parks notified by the Ministry) should have minimum
eligible project cost of Rs. 3 (three) crore in general areas and Rs. 1 (one) crore in case
of North Eastern States including Sikkim and Difficult areas i.e. Himalayan States
(Himachal Pradesh, J&K & Uttarakhand), State Notified ITDP areas and Islands.
However, in State/UTs having no Mega Food Park, Agro Processing cluster or
designated food park, units may be considered anywhere with minimum eligible project
cost.

(v). Proposals having 100% stake of SC / ST entrepreneurs / promoter(s) with eligible

project cost of Rs. 1 (one) crore or more will be considered anywhere / irrespective of
location subject to meeting other terms & conditions of the scheme guidelines.

(vi). Applicants/ Promoters who have availed assistance under any scheme of the
Ministry, can apply again only after two years from the date of release of final
installment of grant. However, the Promoter(s) of Mega Food Parks and Agro
processing clusters approved by the Ministry who are desirous to set up units in their
respective Mega Food Park & Agro Processing Cluster will be eligible for availing
financial assistance for more than one unit(s) under the scheme at any point of time.

(v). Proposal will have to obtain a minimum of 60 marks (out of 100 marks) in order to
become eligible for consideration of grant-in-aid as per assessment criteria prescribed
in the scheme guidelines.
The applicant fulfilling the above eligibility criteria under the scheme is required to
submit the online application attaching therewith complete documents as prescribed in
the guidelines.

Location of units:

Under the scheme, food processing and preservation units are required to be set
up in the Mega Food Parks, Agro Processing Clusters and designated Food Parks
notified by the Ministry from time to time. 263 designated Food Parks have been notified
by the Ministry on the recommendations of State / UT Governments. These designated
Food Parks include Mega Food Parks and Agro Processing Clusters approved by the
Ministry.. However, in State/UTs having no Mega Food Park, Agro Processing cluster or
designated food park, units may be considered anywhere. Proposals having 100%
stake of SC / ST entrepreneurs / promoter(s) with eligible project cost of Rs. 1 (one)
crore or more will be considered anywhere / irrespective of location subject to meeting
other terms & conditions of the scheme guidelines.

Project Management Agency (PMA):

MOFPI has engaged professional agencies as PMAs to assist in examination,

evaluation and monitoring of the proposals and also in implementation of the scheme.

Approval Process:

The applications received online are evaluated by the Project Management Agencies
(PMA) engaged by the Ministry as per the assessment criteria prescribed in the scheme
guidelines and evaluated proposals are placed before Technical Committee (TC) for
their recommendations. The TC recommended proposals are placed before Inter-
Ministerial Approval Committee (IMAC) for approval of the grant to the proposal.
Disbursement of Grant:

i. Approved grant will be disbursed through bank that has sanctioned term loan for
the project. Grant will be credit linked but not back ended and will be released in
two installments each @50% of grant in the following manner:

ii. The first installment of grant would be released after the firm has utilized 50% of
the term loan as well as 50% of promoter’s contribution and on production of the
required documents by the applicant as per guidelines.

iii. The second installment of the grant would be released only after confirming the
commencement of commercial production through joint physical verification by
the PMA & bank and submission of documents specified in the guidelines
regarding utilization of 1st instalment of grant and 100% of Term Loan as well as
100% of Promoter’s contribution as per the approved means of finances.

Implementation and monitoring of the projects sanctioned:

(i). The implementation schedule for the projects would be 18 months from the date
of issue of approval letter. In exceptional circumstances, for the reasons beyond the
control of the promoter (s), the implementation period may be extended with
approval of IMAC.

(ii). In case of non-adherence of time lines, a penalty of 1% of the approved grants-

in-aid, will be imposed for each month’s delay beyond the stipulated timeline. The
maximum amount of penalty, however, shall not exceed 10% of the instalment to be
released to the project.

(iii). Ministry periodically reviews the progress of the projects under the Scheme
through a dashboard developed by NIC. Pre and post inspection is also being
undertaken by Ministry officials, PMA and State Govt. to find out the physical,
financial and operational progress as and when required.
Status of the Scheme:

i. Scheme Guidelines uploading dates:

Operational guidelines Date

First 11.07.2019
Modified/ Revised 13.12.2017, 08.03.2018, 19.09.2018, 29.10.2018, 15.07.2019 and
29.08.2019

ii. Expression of Interest (EoI) and Project details:

Expression of Last date of Extended date Total Cancelled/ Completed/ Ongoing

Interest (EoI) submission of of submission Project Withdrawal Operational
date application of application approved
31.07.2019 15.09.2017 13.10.2017 74 23 7 44
29.12.2017 31.03.2018 30.06.2018, 152 10 4 138
30.09.2018,
31.12.2018,
31.03.2019 &
30.06.2019
16.07.2019 30.09.2019 31.12.2019 3 0 0 3
229 33 11 185

Achievements:-

As on 15/10/2019, 196 proposals/projects have been finally approved under CEFPPC

Scheme with total project cost of Rs. 2725.23 crore including grants-in-aid of Rs. 731.47
crore. The expected outcomes of 196 approved projects may be as under:

1 Total projects approved by CCEA 400

 2 Total approved projects as on 15.10.2019 196

3 Total Project cost of approved projects 2725.23 Cr.

4 Total Grant Approved by MoFPI 731.47 Cr.

5 Grant Released by MoFPI upto 15.10.2019 166.98 Cr.

6 Expected Private investment 1993.76 Cr.

7 Expected Employment generation (Direct) 21800

8 Food Processing Capacities to be created 20.58 Lakh MT per Annum

iv. Sector-wise details of the projects under CEFPPC Scheme (as on 15.10.2019)

Number of Units
Sr. No. Sector
Completed Ongoing Total
Consumer Products/ RTE/
1 4 79 83
RTC
Fruits & Vegetables
2 3 58 61
Processing
3 Dairy/ Milk Processing 0 12 12
4 Fish & Marine Processing 1 4 5
5 Grain Milling 3 25 28
6 Meat & Poultry Processing 0 5 5
7 Oil Milling 0 2 2
Total 11 185 196

Efforts to promote SC/ST & NER entrepreneurs/ investors:

A separate budget has been earmarked for SC/ST & NER applicants/ promoters.
Further, SC/ST proposals are considered at par with "difficult areas" for providing higher
level of financial assistance i.e. @ 50% of Eligible project cost instead of 35%.
Ministry has written letters to TRIFED and all the State Governments on 12.06.2019
and also to NSCFDC/ NSTFDC on 22.11.2018 requesting to give wide publicity
regarding benefits available to ST/SC entrepreneurs/investors under scheme.

Further, Ministry on 28.11.2018 has requested State Scheduled Caste/ Scheduled Tribe
Financial and Development Corporations of Gujarat, Sikkim, Andhra Pradesh, West
Bengal and Rajasthan to give publicity regarding benefits available to SC Entrepreneurs
under this scheme and has also taken up the matter with Ministry of Social Justice
requesting regarding the same.

In this regard, The Dalit Indian Chamber of Commerce and Industry (DICCI) has also
organized one seminar for promotion of the Scheme and Ministry has organized various
seminar in North-East Region for promotion of the Scheme.