Gram Samridhi Yojana — a scheme to bolster the unorganised food processing sector

India’s food processing ministry planning out a new scheme — Gram Samridhi Yojana — to strengthen the unorganised food processing sector focused in rural areas. The Rs 3,000 crore scheme funded by the World Bank and the centre will help cottage industry, farmer producers’ organisation and individual food processors to increase capacity, upgrade technology besides skill improvement, entrepreneurship development and strengthening the farm-to-market supply chain.

About 66% of unorganised food processing units are in rural areas and of these, 80% were family run.

Niti Aayog has given the in-principle approval to the scheme and now the proposal has gone to the Expenditure Finance Committee for clearance. To ensure doubling of farmers’ income and employment opportunities has been developed in rural areas for food processing enterprises. This will be a game changer, which will encourage cottage and small enterprise to process local produce, package and market it.

World Bank will be giving Rs 1,500 crore while Rs 1,000 crore will be borne by the centre while state governments will put in Rs 500 crore, In the initial phase the scheme will be run in Uttar Pradesh, Andhra Pradesh, Maharashtra and Punjab for a five-year period and thereafter replicated in other states.

The maximum cap of subsidy to be given to a unit will be Rs 10 lakh, apart from interest subsidy, if they avail of loans. There is a provision for getting subsidy on bank interest by 3% to 5%.

The scheme aims at development of modern infrastructure to encourage entrepreneurs to set up food processing units, upgrade technology in existing unit, improve management of the units and give technical support.

Gram Samridhi Yojana also aims to provide common facility centres and business incubators in rural areas. The incubator will provide infrastructure and services to support the growth of new food businesses. It will provide equipment and programs to help a businessmen or an entrepreneur launch a new product through development, market launch and growth in sales.

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