In the 2021-22 Karnataka Budget, the State government plans to give a big push to the “one district, one product” policy for exploiting the potential of unorganised micro-food processing by offering credit, avenues for the marketing of products, and technical know-how.
Under this scheme, the State has identified and approved 20 districts for horticultural products, six for agricultural products, two for marine products, one for poultry, and one for bakery products. The products in each district were chosen on the basis of their availability, status of current processing, and scope of marketing.
Under the policy, one product in each district is identified and entrepreneurs involved with these products are eligible to avail credit-linked capital subsidy at 35% of the project cost, with a maximum ceiling of ₹10 lakh per unit. The maximum credit will be ₹30 lakh per project.
Food processing organisations and self-help groups/producer cooperatives are also eligible for the subsidy, according to Manoj Rajan, Special Secretary, Food Processing, who is the overall in-charge of the Pradhan Mantri Formalisation of Micro food processing Enterprises (PM-FME) scheme. A total of 132 applications had been received under the scheme as on February 25, 2021.
The expenditure will be shared 60:40 between the Union and State governments. The State is expected to allocate nearly ₹500 crore for five years from 2020-21 to 2024-25. The 2021-22 Budget is expected to set aside more than ₹100 crore for it, sources said.
A State-level committee headed by the Additional Chief Secretary and the Development Commissioner and district-level committees headed by Deputy Commissioners are monitoring the implementation of the PM-FME scheme, Mr. Rajan said.
Besides the Agriculture Department, Karnataka State Agricultural Produce Processing and Export Corporation Ltd. is the project nodal agency, while the Central Food Technological Research Institute, Mysuru, has been roped in for providing technical expertise and support.
In unorganised sector
It is estimated that in the country, unorganised enterprises contribute to 74% of employment (a third of which goes to women), 12% of the output, and 27% of the value addition in the food processing sector. Nearly 66% of these units are located in rural areas, while about 80% of them are family-based micro-enterprises.
The unorganised food processing industry has been facing many challenges weakening its performance and limiting its development, including lack of productivity and innovation because of limited skill and access to modern technology.
