Food processing ministry may get lower allocation in interim budget

The ministry has spent about ₹2,912 crore so far in FY2023-24, against the budget estimate of ₹3,287 crore for the financial year.

“Although we proposed a higher budget allocation of ₹4,200 crore, we may be allotted around ₹3,087 crore in the FY25 Budget," the official said. “The expenditure so far has been lower than the allocated budget in FY24, and since it is an interim budget, more funds may be given later if and when required."

The official, however, clarified that the FY25 budget allocation figure was not definite. “The allocation could be higher or lower than the quoted figure, but roughly it may be around ₹3,087."

MoFPI is expected to be allocated over ₹1,200 crore for the production linked incentive (PLI) scheme for the food processing industry, about ₹900 crore for the Pradhan Mantri Formalisation of Micro Food Processing Enterprises scheme, and about ₹750 crore for the Pradhan Mantri Kisan Sampada Yojana (PMKSY) in FY25, according to the official.

For FY24, the ministry received an allocation of ₹2,453 crore for the PLI scheme, ₹1,530 for PMKSY, and ₹639 crore for the scheme for micro food-processing enterprises. 

MoFPI and the expenditure department did not immediately reply to queries on the expected budget allocation for FY25.

“The government is supporting and nurturing food startups and processing, but it should also focus on addressing labour challenges that cause a lack of interest among farmers, especially the younger generation, in cultivating millets," said Shantanu Patil, co-founder of Meloop Foods Pvt Ltd, a maker of millet-based flour, snacks and other food products. 

“The current appeal of fruits, soybean, and cash crops like sugarcane overshadows the attractiveness of millet farming in Solapur, Beed, Latur and Dharashiv region," Patil said. “We are hoping the Union Budget will be inclined towards providing incentives or subsidies for harvesting machines for millets, which will decrease labour costs."

The Union cabinet had approved the PLI scheme for the food processing industry on 31 March 2021 with a budget of ₹10,900 crore, to be implemented from 2021-22 to 2026-27. The scheme incentivises micro, small and medium enterprises that focus on innovation in the food processing space. 

Additionally, the PLI scheme for millet-based products promotes millets–grains that need fewer resources and can withstand changes in the weather. 

The scheme for micro food-processing enterprises was launched in June 2020 to tap the potential of groups and cooperatives in supporting upgradation and formalization of micro enterprises in the space.

As for PMKSY, it was envisaged as a comprehensive package aimed at creating an efficient supply chain management system and providing a boost to the food processing sector. 

This includes providing better returns to farmers, creating employment opportunities, especially in rural areas, reducing wastage of agricultural produce, increasing the processing level, and enhancing the export of processed foods.

Sanjay Sethi, executive director of the Plant Based Foods Industry Association, also sought budgetary support, saying that could help “propel this nascent industry by offering immense potential for foreign exchange gains and addressing the current vacuum in the global plant protein market."