NBFC for food processing likely this year: Kaur

Kolkata: The Union Food Processing department will float the Request for Proposal (RFP) for the non-banking financial company (NBFC) exclusively catering to financial needs of the food processing sector by this month and expects to make it operational by the end of this year.

"The RFP will be floated by this month and it would possibly be operational by the end of this year. It will entail an investment to the tune of Rs 2,000 crore and is likely to be named Agro-Processing Financial Institution," Union Food Processing Industries Minister Harsimrat Kaur Badal said on Friday on the sidelines of an interactive session by the Indian Chamber of Commerce (ICC). Kaur informed that she had a meeting with the Finance ministry on Thursday for some clarification on expenditure. "There is a lot of interest from the private sector not only nationally but also globally to invest in this venture. We are looking at an investment of Rs 2,000 crore. We are putting a seed money of about 20 percent," she said. The decision of setting up such a financial institution exclusively catering to the food processing sector has resulted amidst allegations from the business community in this sector about the bank's hesitation in extending financial support.

"The growth potential is huge but banks have refused to finance the way we would have wanted them to as they do not fully understand the risk assessment," she said. Kaur also maintained that Bengal, with six agro-climatic zones, huge coastline and abundance of raw materials, has a huge potential in food processing industries. She also urged the Farmer Producer's Organisations (FPOs) of Bengal to come forward and take advantage of such government schemes. She felt that 'Operation Greens' will be hugely beneficial for the state, especially for the farmers producing perishable commodities like tomatoes, onions and potatoes. The Central government has roped in Deloitte and PricewaterhouseCoopers (PWC) for helping the small farmers on availing the central subsidies and allied benefits in this sector.

Shashwat Goenka, president, ICC, in his welcome address said he felt that government policy support, with schemes like 'Pradhan Mantri Kisan Sampada Yojana', improved production strategies, increased public investment in infrastructure and R&D activities have significantly increased India's food production and availability of marketable surplus.