Venture capital fund, bank mooted for food processing sectorJune 12th, 2009 - 7:09 pm ICT by IANS
New Delhi, June 12 (IANS) Agreeing to industry’s demand for access to more credit at competitive rates, the government is examining a proposal to set up a venture capital fund or a bank for the food processing sector.
“Entrepreneurs face difficulties in getting bank loans because this is a perishable goods industry,” Food Processing Industries Minister Subodh Kant Sahai said here Friday.
“Hence, we are looking at a separate venture capital fund or a bank for this,” Sahai told reporters after a meeting organised by the Confederation of Indian Industry (CII).
He contended the sector would be in the driving seat of the Indian economy, adding: “Of the top 10 industries in the country today, I would say that food processing is at the fifth or sixth position.”
The venture capital fund was one of a number of suggestions that were put forward to the minister in the meeting with the CII.
According to the “India Food Report 2008″ of markets data provider Research and Markets, the Indian food industry is estimated at over $182 billion - or two-thirds of the country’s retail sector.
While developed countries process up to 80 percent of the produce, India lags far behind, resulting in much of its output going waste.
“We want to see this sector grow 100-fold in the second term of the (UPA) government. We will try to meet all the targets we had set in our ‘Vision 2015′ plan,” said Sahai.
The plan envisages doubling India’s share in the world food processing market to 3 percent, increasing the level of processing of perishables from 6 percent to 20 percent, and raising value addition of such products from 20 percent to 35 percent.
“There are two to three focus areas we are looking at. One is capacity building, infrastructure development,” Sahai said.
“We need to strengthen our cold chain and supply chain infrastructure and increase the number of processing hubs. We lack skilled manpower, good scientists and managerial resources in the sector and so skills development is priority area.”
Sahai also said his ministry would study a new proposal to supply processed food items under the midday meals scheme.
“This is a proposal that has come to us. But I understand there is a court order that only freshly cooked food should be supplied under the mid-day meals scheme. Also the scheme is under the HRD (human resources development) ministry. So, we have to look at all these issues,” he said.
However, he added that processed food should not be looked at only from the midday meals perspective but from the children’s food in general.
“Processed foods for children are of high quality, nutritious and hygienic,” the minister said.
Friday’s meeting was the latest in a series of meetings the minister has held with industry bodies to get inputs for preparing a 100-day action plan for the sector under the UPA government.
He had earlier met representatives of the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Punjab, Haryana, Delhi Chambers of Commerce and Industry (PHDCCI).
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