LexThe Odisha Food Processing Policy - 2016
Odisha · state statute
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Micro, Small & Medium Enterprises Department
Government of Odisha
Odisha Food Processing
Policy – 2016
Table of Contents
Sl. Subject Page
1 Introduction 1
2 Vision 2
3 Objectives & Strategy 2 – 3
4 Nodal Agency 3 – 4
5 Definitions 4
6 Facilitation Support to Food Processing Sector 4
6.1 Single Window Clearance System 4
6.2 Infrastructure Development 4
6.3 Food Processing Cell 4
7 Incentives & Support Measures 5 – 8
7.1 Capital Investment Subsidy for Food Processing Enterprises 5
7.2 Capital Investment Subsidy for setting up Cold Chain, Value addition a nd
Preservation Infrastructure for non -horticultural produce,
and
for Primary Processing Centers / Collection Centers for both horticulture and
non-horticulture produce
5
7.3 Assistance for Reefer Vehicles 5
7.4 Assistance to Urban Local Bodies for Modernization of Meat Shops 6
7.5 Assistance for Human Resource Development (HRD) 6
7.6 Promotional Activities 6 – 7
8 Assistance for setting up Mega Food Park / Sea Food Park / State Food Park 7
9 Governance 7 – 8
10 General Provisions 8 – 9
11 Appendices 10 – 12
Annexure I Definitions & Abbreviations 10 - 11
Annexure II List of Ineligible Enterprises / Industries 12
1
1. Introduction
1.1 Odisha has 10 agro-climatic zones and 8 major soil types , which are favourable
for production of variety of crops, vegetables, fruits and spices. In 2015 -16, the
Agriculture and al lied sector have contributed about 17 % to the Gross State
Domestic Product.
1.2 State has recorded 25.92% of growth in the food grains production to 105.27
lakh MTs during 2014-15 over 2013-14.
1.3 State has a long coastline of 480 km with continental shelf area of 24,000 sq.
km along the Bay of Bengal. Odisha is endowed with rich marine water
reserves, perennial rivers and substantial water bodies.
1.4 Odisha is the 9th largest producer of fish and the 4th largest producer of shrimp
in the Country. Total fish production in the State during 201 5-16 was 5.21 lakh
MT.
1.5 Odisha is also a leading producer of milk. Total milk production stood at 1 9.39
lakh MT during 2015-16.
1.6 Odisha is India’s leading producer of Cereals like rice, maize; Pulses like arhar,
moong, black gram; Oil Seeds like groundnut, sesame, mustard & s un flower;
Fibers like cotton, jute, mesta & coconut; Spices like turmeric, ginger, chilly &
garlic. Odisha has also significa nt production of vegetables like sweet potato,
potato, onions & tomato and fruits like Mango, Pineapple, Papaya, Jackfruit and
Tamarind. However, the Food Processing Industry in Odisha is yet to exploit full
potential of all these agro-horticultural produce.
1.7 As per a study , Odisha has the potential to attract investment of USD 33 billion
in next 10 years and generate employment to 9 million persons. T he food
processing sector has a potential to grow at a Compound Annual Growth Rate
(CAGR) of 11%.
1.8 Considering the importance of the food processing sector, the State Government
had notified a separate Food Processing Policy in 2013. Industrial Policy
Resolution-2015 of Govt. of Odisha declares ‘Food Processing’ as one of the
Priority Sectors.
1.9 Considering th e immense potential of growth and employment in the Food
Processing sector and i n order to provide renewed impetus, Government of
Odisha is bringing out “Odisha Food Processing Policy -2016” with an
objective to provide required infrastructural and institutional support and fiscal
incentives to boost value addition in the sector.
2
2. Vision
To catalyze the development of competitive Food Processing Industr y by
facilitating creation of an enabling environment and related infrastructure for
sustainable, equitable and inclusive growth of the sector with a view to add value
& reduce wastage and thereby maximizing employment opportunity and increase
income of farmers.
3. Objectives & Strategy
Sl.
Objective
Strategy
i.
To encourage & enable local
entrepreneurs to set up Food
Processing enterprises.
To create awareness and organise
food proce ssing specific
entrepreneurship development
programmes at ITIs / Polytechnics,
IED, OUAT, NIT, Rourkela.
To depute the identified potential
food processing entreprene urs for
higher learning to national level
institutes like NIFTEM, CFTRI,
IICPT and for industrial exp osure
to successful clusters / enterprises.
ii.
To increase the flow of private
sector investments across the value
chain from farm gate to market.
To organize Road shows /
Investors' Meets at strategic
locations and participate in Fairs /
Summits in the country & overseas.
iii.
To provide enabling infrastructure
by promoting establishment of Food
Processing Parks and common
facilities in terms of warehouses,
cold storages, laboratories,
packaging.
To set up Food Processing P arks at
Deogarh, Bhadrak, Bargarh,
Nawrangpur (Maize Park),
Sambalpur, Ganjam, Bolangir,
Kandhamal and Kalahandi.
To facilitate & monitor
establishment of Mega Food Parks
(under development) at Deras
(Khordha) by IDCO & Rayagada by
MITS.
To facilitate development of
common infrastructure near the
existing food processing clusters.
3
iv.
To encourage value addition,
increase shelf -life & reduce
wastage, thereby increasin g
employment and income to the local
farmers and entrepreneurs.
To provide f iscal & non -fiscal
incentives to encourage value
addition.
To facilitate flow of credit from
Banks / NABARD / FIs to the
existing & upcoming Agro & Food
Processing enterprises.
To promote setting up of Cold
Chains, Cold Storages & Primary
Processing Centres.
v.
To support capacity building in
terms of skilling of Human Resource
required by the Food Processing
Industry.
To organize need based skill
development programmes wi th the
assistance from Odisha Skill
Development Authority, Director,
Employment & Director, Technical
Education & Training.
vi.
To promote product / process
innovation, research and
development and encourage
technology up-gradation.
To provide fiscal incentives to the
technical / professional institutions
and existing entrepreneurs to
promote product / process
innovations and R&D.
To facilitate assistance to the
enterprises from the existing GoI
schemes.
To provide incentives to encourage
technology u p-gradation /
modernization.
vii.
To enhance competitiveness of the
local food processing industry for
both domestic and international
markets.
To encourage the enterprises to
obtain quality certifica tion from
accredited bodies at national &
international level.
4. Nodal Agency
4.1 The MSME Department, Govt. of Odisha shall be the Nodal Agency for
administration of Odisha Food Processing Policy-2016.
4
4.2 The Director of Industries, Odisha along with Regional Industries Centres (RICs)
/ District Indust ries C entres (DICs) shall be the implementing agency for the
purpose of this Policy.
5. Definitions
All the terms / acronyms used in this policy have been defined in Annexure I.
6. Facilitation Support to Food Processing Sector
6.1 Single Window Clearance System
The existing Single Window Clearance Authority at District and State level shall
provide clearance to projects of food processing sector. Single Window
Mechanism is laid down under Odisha Industries (Facilitation) Act, 2004 and
Amended Rules, 2015 and as may be amended from time to time.
6.2 Infrastructure Development
6.2.1 Government shall facilitate establishment of Mega Food Parks/Sea Food Parks
by IDCO/OSIC/Private Agencies under Mega Food Park Scheme of Ministry of
Food Processing Industries, Government of India.
6.2.2 State Food Parks at strategic locations namely, Deogarh, Bhadrak, Bargarh,
Nawrangpur (Maize Park), S ambalpur, Ganjam, Bolangir, Kandhamal and
Kalahandi over a minimum land area of Ac.25.00 each shall be promoted by
State Government through IDCO/OSIC/private agencies.
6.2.3 Government shall facilitate promotion of Agri-Export Zones in association with
APEDA.
6.2.4 Government shall facilitate development of common infrastructure at Food
Processing Cluster s by availing grants under various Go vernment of India
schemes.
6.2.5 State-of-the-art Food Testing Laboratory will be set up by Directorate of Export
Promotion & Marketing, Odisha with accreditation from National Accreditation
Board for Testing and Calibration Laboratories (NABL) at Cuttack, Berh ampur &
Bolangir. For this purpose, funds shall be mobilized from Government of India
and State Government.
6.3 Food Processing Cell
The Food Processing Cell already functioning at the Directorate of Industries,
Odisha, Cuttack shall be strengthened by e ngaging a Project Management
Agency (PMA) / requisite professionals . The Cell shall act for investment
promotion, facilitation and render all services necessary for successful
implementation of this policy.
5
7. Incentives & Support Measures
7.1 Capital Investment Subsidy (CIS) for Food Processing Enterprises
New and existing food proce ssing enterprises undertaking Expansion /
Modernization / Diversification shall be eligible for CIS in the following manner:
Sl.
No.
Category
Quantum
Maximum Limit
i.
General Food Processing
Enterprise
@25% of capital
investment made in Plant
& Machinery
Up to Rs.2.00
crore
ii.
SC, ST, Women
Enterprise & Enterprise
set up in Industrially
Backward Districts
including KBK
@33% of capital
investment made in Plant
& Machinery
Up to Rs.3.00
crore
iii.
Anchor Industry
@ 25% of capital
investment made in Plant
& Machinery
Up to Rs.5.00
crore
iv.
State-of-the-art NABL
accredited Food Testing
Laboratories to be set up
in PPP mode at locations
other than Cuttack,
Berhampur & Bolangir
50% of capital
investment made in Plant
& Machinery
Up to Rs 4.00
crore
7.2 Capital Investment Subsid y for setting up Cold Chain, Value addition
and Preservation Infrastructure for non-horticultural produce
and
For Primary Processing Centers / Collection Centers for both
horticultural and non-horticultural produce
Quantum
Maximum Limit
@ 35% of capital investment made in Plant & Machinery
Up to Rs.5 crore
7.3 Assistance for Reefer Vehicles
Financial assistance in the form of credit linked back ended subsidy @ 35% of
the cost of standalone New Reefer Vehicle(s) / Mobile pre-cooling van(s) up to
a maximum of Rs.25.00 lakh shall be provided for carrying & transporting both
Horticultural & non-Horticultural produce. This will enable linking groups of
producers to the processors and markets through well-equipped supply chain
management.
6
7.4 Assistance to Urban Local Bodies for Modernization of Meat Shops
Capital Investment Subsidy shall be provided as follows:
Sl.
Area
Quantum
Maximum Limit
i.
General Areas
35% of the cost of Machinery /
Equipment and Technical Civil Works
(TCW) and other eligible items
Up to Rs.5.00 lakh
ii.
Industrially
Backward Districts
including KBK
50% of the cost of Mach inery /
Equipment and Technical Civil Works
(TCW) and other eligible items
Up to Rs.5.00 lakh
7.5 Assistance for Human Resource Development (HRD)
7.5.1 Assistance for Creation of Infrastructure facilities for running Degree /
Diploma / Certificate Courses in Food Processing Technology
One time capital grant @ 50% of the cost up to Rs.1.00 c rore will be p rovided
to recognized U niversity / Institution in the state for creation of infrastructure
facilities for running a recognized Degree / Diploma Course in Food Processing
Technology. The assistance will be limited for pilot projects, laboratory
equipment, technical / academic books / journals, facilities of testing food items.
7.5.2 Assistance for conducting Entrepreneurship Skill Development Program me
(ESDP)
Financial assistance up to Rs.3 lakh per ESDP (of 25 to 30 trainees) will be
provided to Government ITIs / Government Polytechnics / IEDO / OUAT for
conducting a 30 days Certificate Programme on Food Processing.
Note: Not more than 20% of the funds al located in a year can be spent on components under
Human Resources Development.
7.6 Promotional Activities
Sl.
Component
Quantum & Limit
i.
Organizing Seminar /
Workshops
Assistance up to a ceiling of Rs.2.00 lakh per event
organised by ITIs / IEDO / OUAT / APICOL / DEP&M
/ IIP / State Level Industry Associations (subject to
prior approval of Government).
ii.
Support to
Exhibitions / Fairs
Quantum of assistance shall be provided as per
approval of Government.
iii.
Domestic Study Tour
/ Exposure Visit
Assistance @ 50% of expenditure for a maximum of
2 batches (10-25 persons per batch) per annum with
a financial ceiling of Rs. 2.00 lakh per batch shall be
7
provided. In case of Govt. representatives, TA, DA,
etc. shall be admissible as per OTA Rules . Prior
approval of the Government shall be obtained.
iv.
Conducting Studies /
Surveys / Feasibility
Report
Assistance up to 50% of the co st, subject to a
maximum of Rs. 4.00 lakh shall be provided. When
the Govt. / Govt. Organisations commissions the
study / survey, there will be no financial ceiling. Prior
approval of the Government shall be obtained.
Note: Not more than 10% of the funds allocated in a year can be spent on components under
Promotional Activities.
8. Assistance for sett ing up Mega Food Park / Sea Food Park /
State Food Park
Financial assistance up to 20% of the project cost (excluding cost of land ) as
approved by Competent Authority subject to limit of Rs .15 Crore will be provided
to Special Purpose Vehicle (SPV) promoting Mega Food Park / Sea Food Park /
State Food Park . The subsidy can also be provided in the form of equity
participation through IDCO / OSIC. These parks should have been approved under
the Mega Food Park Scheme (MFPS) scheme of Govt. of India or as ‘ State Food
Park’ by Government of Odisha . The overall limit of such assistance from all
sources shall not exceed 50% of the Project Cost (excluding cost of land).
9. Governance
9.1 The Government will constitute a State Level Empowered Committee (SLE C)
under the Chairmanship of Chief Secretary for according approval of incentives
under this Policy of more than Rs.1.00 crore, inter-departmental coordination and
smooth implementation of this Policy. SLEC will also review the progress made
and decide on mid-term correction, if any.
9.2 The Government will constitute a Sub-Committee of State Level Empowered
Committee (Sub-SLEC) headed by Principal Secretary, MSME to consider & accord
approval of incentives of more than Rs.25 lakh and up to Rs.1.00 crore under this
Policy.
9.3 The Government will constitute a State Directorate Level Committee (SDLC)
headed by Director of Industries, Odisha. The SDLC will scrutinize and process all
the applications received under the policy and also will have the power to accord
approval of incentives up to Rs.25.00 lakh. It will recommend all cases exceeding
Rs.25.00 lakh to Sub-SLEC / SLEC for consideration.
8
9.4 Not more than 5% of the total outlay in a financial year under OFPP -2016 may
be utilized towards Administrative Expenses. The admin istrative expense may
include official and incidental expenses for implementation of the policy,
expense towards setting up of office, purchase of office stationery, printing of
publicity materials, hiring of a Project Management Agency, hiring of vehicles.
10. General Provisions
10.1 This Policy shall be effective from the date of its notification and remain in force
until the applicability of IPR-2015.
10.2 New Food Processing Enterprise means any enterprise /industry where fixed
capital investment has comme nced on or after the effective date and which
commences production within three year s for MSMEs and five years for l arge
industries from the date of starting fixed capital investment.
10.3 The existing food processing enterprises undertaking expansion / moder nisation
/ diversification shall be eligible only after first fixed capital investment project is
made after the effective date of this policy.
10.4 This Policy and other extant Policies provides certain fiscal and non-fiscal
incentives. Entrepreneur can choo se to avail a particular incentive according to
his / her eligibility.
10.5 Incentives as envisaged in this policy shall not be applicable to an enterprise if
the similar incentives are availed under any other policies of State Government
or Government of India.
10.6 A new Food Processing enterprise shall be eligible for availing incentives under
this policy provided it is acknowledged with Entrepreneurship Identification
Number and / or Production Certificate / Industrial Entrepreneurs’ Memorandum
(IEM) and commencing production / providing services within a period of three
years for MSME and five years for large industries from the date of starting of
first fixed capital investment.
10.7 An enterprise shall become ineligible to avail incentives if it does not file i ts
claim within one year of commencement of production or one year from the
date of notification of operational guidelines of this policy, whichever is later.
10.8 Government may consider condonation of delay (beyond the stipulated period of
3 years for MSMEs / 5 years for Large Industries) in implementation of projects
due to force majeure (reasons l ike natural calamities) on case to case basis on
recommendation of an Empowered Committee to be constituted under the
Chairmanship of Principal Secretary to Government, MSME Department.
9
10.9 All Food Processing Enterprises which have commenced fixed capital investment
prior to notification of this policy shall continue to be governed and assisted
under OFPP-2013.
10.10 All the Food Processing Enterprises except Micro Enterpr ises should have been
extended with bank loan to a minimum extent of 10% of their cost of Plant &
Machinery for being eligible for incentives under this policy.
10.11 The list of industries not eligible for incentives is provided in Annexure II .
However, the list may be amended, from time to time.
10.12 Doubts relating to interpretation of any term and / or dispute relating to the
operation of any provision under this policy shall have to be referred to the
Nodal Agency for clarification / resolution and the decision of MSME Department
in this regard shall be final and binding on all concerned.
10.13 No right or claim for any incentive under this policy shall be deemed to have
been conferred merely on the ground of provision in this policy. Implementation
of various provisions covering the incentives, concessions etc. will be subject to
notification of detailed guidelines / statutory notifications by MSME Department
/ concerned Administrative Department. Incentives shall be extended subject to
availability budgetary provisions.
****
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Annexure I
Definitions & Abbreviations
i. Anchor Industry means the first & lead l arge investor in the Mega Food Park / Sea Food Park
/ State Food Park , whose brand value & potential for backward and or, forward linkage shall
stimulate further in vestment. Such Anchor Industry should have an investment in Plant &
Machinery above Rs.25 Crore and provide direct employment to more than 50 local people.
ii. Date of Commencement of Production means the 1st date of commencement of production
as mentioned in Production Certificate to be issued by GM, RIC / DIC / D.I, Odisha.
iii. Effective Date means the date of notification of this Policy.
iv. Enterprise would include both MSMEs and large industries of food processing sector. MSME
means an Industrial Unit / Enter prise as defined by the Government of India in MSMED Act,
2006 amended from time to time. Large industry means an industrial undertaking as per the
Industries (Development & Regulation) Act, 1951 or, engaged in providing or, rendering of any
service or, services.
v. Expansion / Modernization /Diversification of an existing enterprise means additional
investment of at least 50% of the un -depreciated book value of Plant & Machinery of the said
unit made in acquisition of additional plant and machinery and tech nology for such expansion /
modernization / diversification duly appraised and approved by DIC / RIC / NSIC / NCDC / Public
Financial Institutions. In case of expansion, the additional investment as above must result in at
least 50% addition in installed c apacity. In case of diversification, the additional investment as
above must result in production of at least one additional product in food processing.
vi. First date of fixed capital investment means the first investment made by the new
enterprise in Land o r, Building or, Plant & Machinery or, Balancing Equipments on or after the
effective date of this policy.
vii. Food Processing includes transformation of raw ingredients, or food into other forms including
a process of value addition to the agriculture, edibl e animal / fish products, marine products
including sea food such as shrimp / fish and horticulture products by various methods such as
grading, sorting and packaging in an effective manner, to enhance their shelf life, quality and
make them more useful. I t may also include processing of food at all levels, i.e; primary,
secondary and tertiary. Enterprises engaged in manufacture of packaging, materials for food
processing industry. Enterprises engaged in manufacture Cattle feed / Poultry feed / Prawn
feed / Fish feed.
viii. Government means Government of Odisha.
ix. Industrially Backward Districts : Kalahandi, Nuapada, Bolangir, Subarnpur, Koraput,
Malkangiri, Rayagada, Nawrangpur, Kandhamal, Gajapati and Mayurbhanj.
x. Infrastructure include warehouse, cold storage, Primary Processing Centre / Collection Centre,
transportation infrastructure including reefer vans / containers, Cold Chain, Value addition and
Preservation Infrastructure for processed food and beverages.
xi. Mega Food Park (MFP)/ Mega Sea Food Park /State Food Park
Mega Food Park : A place where there is an integration of facilities to augment processing of
various agriculture, horticulture, animal products, fishery products / sea food products either be
approved under Mega Food Park Scheme (MFPS) scheme, GoI.
State Food Park : An Industrial park dedicated for food processing activities and which is
approved by the Govt. of Odisha with minimum land requirement of Ac.25.00.
xii. MSME means Micro, Small and Medium Enterprises as defined in the Micro, Small and Me dium
Enterprises Development Act, 2006 as amended from time to time shall be applicable.
xiii. Nodal Agency means Department of MSME, Govt. of Odisha.
Appendices
11
xiv. Quality assurance providers include food testing laboratory and certification agencies.
xv. Research and Human Resource Development includes institutes involved in Research &
Development of Product technology, packaging material for processed food and institutes
involved in developing Human Resources through skill development, entrepreneurship
development, running food processing and related courses.
xvi. SC, ST Enterprise : A Food Processing Enterprise managed by one or, more Scheduled Caste
(SC) / Scheduled Tribe (ST) entrepreneurs in the enterprise in which they individually / jointly
have a share capital of not le ss than 51% as partners / Shareholders / Directors of Partnership
Firm / Private Limited Company / Cooperative Societies.
xvii. Women Enterprise : A Food Processing Enterprise managed by one or, more women
entrepreneurs in the enterprise in which she / they i ndividually / jointly have a share capital of
not less than 51% as partners / Shareholders / Directors of Partnership Firm / Private Limited
Company / Cooperative Societies.
Abbreviations
E/M/D : Expansion / Modernization / Diversification
IDCO : Odisha Industrial Infrastructure Development Corporation
IEM : Industrial Entrepreneurs Memorandum
IPR : Industrial Policy Resolution, 2015
KWH : Kilo Watt Hour
MFP : Mega Food Park
MSME : Micro, Small & Medium Enterprise
MT : Metric Tonne
NCDC : National Cooperative Development Corporation
NSIC : National Small Industries Corporation
OSIC : Odisha Small Industries Corporation Limited.
RIC / DIC : Regional Industries Centre / District Industries Centre
SPV : Special Purpose Vehicle
* * * *
12
Annexure II
LIST OF INELIGIBLE ENTERPRISES / INDUSTRIES
Enterprises ineligible for fiscal incentives specified under this Policy
(Food Processing Enterprises / Industries as per negative list of IPR, 2015)
01 Hullers and Rice mills with investment in plant & machinery of less than 25 lakhs for
industrially backward districts and less than Rs.1 crore for other areas.
02 Flour mills including manufacture of besan, pulse mills and chuda mills except
investment in plant & machinery of less than Rs.25 lakhs for industrially backward
districts and less than Rs.1 crore for other area (excluding Roller Flour Mills).
03 (a) Processing of spices with investment in plant & machinery with less than Rs.10 lakh
for industrially backward districts and less than Rs.2 crore for other areas.
(b) Units without Spice-mark or Ag-mark.
04 Confectionary with investment in plant & machinery with less than Rs.10 lakh for
industrially backward districts and less than two crore rupees for other area
05 Oil mills with expellers including oil processing, filtering, decolouring, colouring refining
of edible oils and hydrogenation thereof except investment in plant & machinery more
than Rs.10 lakh in industrially backward districts.
06 Preparation of sweets and savouries except investment in plant & machinery of less
than Rs.10 lakhs for industrially backward districts and less that Rs.50 lakh for other
area.
07 Bread-making (excluding mechanised bakery).
08 Mixture, Bhujia and Chanachur preparation units.
09 Manufacture of Ice candy.
10 Manufacture and processing of betel nuts.
11 Hatcheries, Piggeries, Rabbit or Broiler farming.
12 Units for mixing or blending / packaging of tea.
13 Units for cutting raw tobacco and sprinkling jaggery for chewing purposes and Gudakhu
manufacturing units.
14 Pre-processing of oil seeds: decorticating, expelling, crushing, parching, and frying.
15 Aerated water and soft drink units.
16 Bottling units or any activity in respect of IMFL or liquor of any kind.
17 Re-packaging Units.
Note: List of Industrial units / enterprises indicated above may be modified by the Government
from time to time.
* * * *