Government to give aid worth Rs50 crore to five food parks  

March 12, 2010

The Indian government has said that it will provide financial aid to five out of six food parks already approved across the country over the next financial year. The government is providing financial assistance of Rs50 crore to catalyse investment in these mega food parks. This amount will be released by the government in various tranches, depending on the status of development of each food park.

“We will give Rs10 crore each to the remaining five food parks in the next financial year as they have reached various stages of implementation,” said Ashok Sinha, secretary, ministry of food processing industries.

Last year, the government had approved six food parks in Uttarakhand, Andhra Pradesh, Jharkhand, Assam, Tamil Nadu and West Bengal. Out of these units, only two food parks—one in Uttarakhand and the other in Andhra Pradesh—are in an advanced stage of infrastructure construction.

Apart from the six mega food park projects, the government is also in the process of approving four more food parks out of the ten parks which applied for permission last year. The government had earlier decided to come up with 30 food parks till 2012 but now the authority has slashed down the number to 10. Currently, the government is in the process of giving permission to four food parks, which would receive the go-ahead in six weeks (approximately by mid-April 2010).

“We have received 37 proposals for mega food parks, out of which we are currently processing four proposals. A few of them are from private players also,” said Mr Sinha.

The government is providing Rs50 crore in financial aid to these food parks to encourage the setting up of more parks. Last year, the government allocated Rs45 crore (Rs5 crore advance to five food parks and Rs15 crore to one food park) to six food parks. The project at Uttarakhand had received Rs15 crore last year and the remaining five projects will receive Rs50 crore (Rs10 crore each) in the next financial year.

The government’s contribution will be used to create infrastructure facilities like cold storage, incubation centres, warehouses, roads, core-processing centres, quality control labs, drinking water facilities and collection centres.

The ministry has received 37 proposals for mega food parks of which 16 are for Maharashtra, 10 for Karnataka, six for Punjab and five for Uttar Pradesh (UP). In Punjab, Mrs Bector’s Food Specialties (a part of the Cremica Group), Brattle Foods Ltd, International Fresh Farm Products Ltd, Maninder Rice Mills, Kolkata-based LMJ Ltd, and an entrepreneur from the US have shown their interest.  

In Karnataka, Capital Foods Ltd has shown interest in these food parks. In Maharashtra, Pantaloons Retail (India) Ltd, Paithan Mega Food Park, Temptation Foods Ltd, Dhoot Developers Pvt Ltd and Skil Infrastructure Ltd have shown their interest in these units. Temptation Foods Ltd is one of the applicants among the five with interest in these facilities in UP.

The government is encouraging the public-private partnership model for setting up the food parks. “The government gives Rs50 crore assistance for each food park, but that is not enough. You also need about Rs50 crore or more of private investment (in each food park) in infrastructure,” said Mr Sinha.

“We are encouraging three-four private players to come together to set up a food park so that the investments are shared,” he added.

The joint investment of three–four players lowers the cost of the land and infrastructure. Every food park would have a special purpose vehicle comprising around three entrepreneurs, representatives of banks and financial institutions and also from the food processing ministry. The special purpose vehicle will require an investment of around Rs120 crore, which includes the government’s contribution of Rs50 crore, for each food park.  

Every food park will have around 27 processing and ancillary units which will process about 1,80,000 tonnes per annum of raw materials—primarily comprising fruits and vegetables, rice and spices and will draw an investment of Rs250 crore. Each food park needs an investment of Rs370 crore and takes a minimum of two years for completion. Infrastructure Leasing & Financial Services Limited (IL&FS) is assisting the government in project management for all these food parks spread across the country — Pallabika Ganguly