The food processing ministry is in talks with banks and financial institutions to set up a venture capital (VC) fund. By the beginning of the next financial year, the venture capital fund will be in place with a corpus of Rs 1,000-1,200 crore. According to a report in The Financial Express, the fund would lend on a priority basis to units that deal in perishable items like fruits, vegetables, meat, poultry and fish. Food processing minister Subodh Kant Sahai had earlier mentioned that the industry would require investments worth Rs 100,000 crore by 2015.
The ministry is in talks with banks for a separate fund to be earmarked for the food processing sector. Even though the food processing sector enjoys priority status for borrowing, the fund allocated to it is a part of the agriculture sector. This fund often gets exhausted before the food processing sector can avail any of it.
According to the report, the ministry officials met executives of the RBI, Nabard, Sidbi to discuss a three-point agenda. These include credit flow to the food processing industry sector, modalities for creation of a separate vertical for FPI sector in the reporting format of banks and setting up of a venture capital for the food processing sector. The ministry wants investments to come to the sector for plants, machinery and equipment along with research and development (R&D) for new product development.
The ministry had been implementing various infrastructure development schemes such as setting up of mega food parks, cold chain, modernisation of abattoirs and value-added cantres. It has also been undertaking schemes for technology upgradation, establishment and modernisation of food processing industries, quality assurance, Codex standards, and R&D, human resource development, strengthening of institutions and upgradation of quality of street food.
Source : ProjectsToday
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