Food Processing Industry (FPI) Subsidy Rates in Himachal Pradesh

Updated on December 16, 2024 12:25:39 PM

The Ministry of Food Processing Industries (MoFPI) of the Government of India instituted FPI subsidy plans in the food processing industry to encourage entities to set up business in Himachal Pradesh. All the existing as well as new Enterprises that recruit Bonafide Himachalies for over and above 80% on a regular basis are eligible for incentive of Rs 1000 per month for each additional employment generated over and above of 50 Bonafide Himachalies for a tenure of ten years from the date of production.

The FPI subsidy plans for entities in Himachal Pradesh aim to expand businesses, provide job opportunities and more to strengthen the economy and boost sales. In this article, you will get to know the complete insights on the FPI subsidy rate in Himachal Pradesh, along with its benefits that will help the businesses in Himachal Pradesh through these FPI subsidy schemes.

Here are the benefits of the FPI subsidy in Himachal Pradesh that Food Processing Industry of the state offers:

1. Employment Generation: The FPI subsidy in Himachal Pradesh provides job opportunities to locals and increases employment which results in betterment of living standards.
2. Market Expansion: Local businesses can utilize the FPI subsidy to expand the markets beyond their region and compete in bigger regions.
3. Economic Development: The FPI subsidy has a positive impact on the local economy as it supports businesses to improve import and export of goods.
4. Cost Reduction: The FPI subsidy helps to lower transport costs for businesses in Himachal Pradesh, which makes transport of goods and services sustainable and cost efficient for both businesses and consumeRs
5. Encouraging Entrepreneurship: The FPI subsidy also makes it easier to start up new businesses and helps to create a more lively and varied local economy.

Under the Food Processing Industry (FPI) subsidy in Himachal Pradesh, the maximum subsidy amount is granted to ensure that the scheme aids in prevention of exploitation or unfairness of the intermediary. The subsidy rate in Himachal Pradesh is categorized under 3 categories which are:

• Capital Subsidy

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  Financial assistance to food processing units in the form of grant-in-aid with 33.33% of the cost of Plant & machinery and technical civil works	Subject to a maximum of Rs 75 lakhs throughout the State	For Technology Up-gradation/ Establishment / Modernization of FPIs (Cost of Plant & Machinery & Technical Civil Works)
  Grant-in-aid at 50% of the bank appraised project cost or 50% of actual investment on building, Plant & Machinery whichever is less	Subject to a maximum of Rs 5 Crore per project	For Cold Chain, Value Addition and Preservation Infrastructure (for non-horticultural products) under SMFP
  75% of the cost of Machinery/Equipment and Technical Civil Works (TCW)	Subject to a maximum of Rs 5.00 lakh under the scheme Modernization of Meat shops under State Mission of Food Processing	For Modernization of Meat Shops under State Mission of Food Processing
  Grant-in-aid for PPC/CC will be provided at 75% of the eligible project cost	Maximum amount of Rs 2.50 crore	For Setting up of Primary Processing Centers / Collection Centers in the rural areas under State Mission on Food Processing
  Credit linked back ended grants in aid at 50% of the cost of New Reefer Vehicle(s) / Mobile pre-cooling van(s)	Up to a maximum of Rs 50 lakh	Only for Reefer Vehicle(s) and Mobile pre-cooling van(s)

• Interest Subsidy

  Subsidy Program	Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  Cold Chain, Value Addition and Preservation Infrastructure (for non-horticultural products) under SMFP	Every year the interest subsidy at 7% will be paid to the Bank/FI directly against the term loan sanctioned and availed by it	Subject to a maximum of Rs 25 lakhs per year	The interest subvention will be for a period of 7 years from the date of completion of the project and commencement of commercial production as certified by concerned GM, DIC/MS,SWCA
  Micro, Small and Medium Enterprises (MSME)	Interest Subvention at 3% on term loan	Rs 2 lakhs for Category A	For a period of 3 years
  		Rs 4 lakhs for Category B
  		Rs 6 lakhs for Category C
  Large Enterprises		Rs 10 lakhs for Category A	For a period of 5 years in Categories A, B, and C areas subject to condition that interest subsidy would be calculated on simple interest
  		Rs 15 lakhs for Category B
  		Rs 20 lakhs for Category C
  Special Categories of entrepreneurs	Interest Subvention at 5% on term loan	Rs 3 lakh for Category A
  		Rs 5 lakh for Category B
  		Rs 7 lakh for Category C

• Renewable Energy based pilot cold chain projects

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  Grant in aid at 90% of the bank appraised cost including the cost towards setting up of the solar power plant	Subject to a maximum of Rs 5 crores	There will be no component of interest subsidy

• Freight/Transport Subsidy- Micro, Small and Medium Enterprises (MSME)

  Subsidy Program	Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  Assistance for transportation of Plant & Machinery	Reimbursement of 50% of cost incurred on inland carriage and inland transit insurance of Plant and Machinery	Rs 2 lakhs per enterprise in Category A	In Category A areas
  		Rs 3 lakhs per enterprise in Categories B & C	In Categories B & C areas
  Transport Subsidy	Reimbursement of actual expenditure incurred on transportation of raw materials & finished products within the state or 3% of annual turnover, whichever is lower	Subject to maximum of Rs 10 lakhs per annum for Category B	For a period of 3 years for enterprises located in Category B areas
  	Reimbursement of actual expenditure incurred on transportation of raw materials & finished products within the state or 5% of annual turnover, whichever is lower	Subject to maximum of Rs 10 lakhs per annum for Category C	For a period of 5 years for enterprises in Category C areas

• Assistance to encourage water conservation

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  25% of expenditure incurred for the purchase of Plant & Machinery / equipments for setting up of Effluent Treatment Plant (ETP), rain water harvesting system	Subject to a maximum of Rs 2 lakhs per enterprise	It excludes expenditure incurred on construction

• Reimbursement of the charges paid to the consultant for preparation of DPR; certification/valuation

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  90% reimbursement of the charges	Subject to maximum of Rs 20,000 for micro sector enterprise	For micro sector enterprise
  	Subject to maximum of Rs 50,000 for small sector enterprise	For small sector enterprise
  	Subject to maximum of Rs 1,00,000 for medium sector enterprise	For medium sector enterprise

• Interest Subvention

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  5% on term loan	Subject to a maximum ceiling of Rs 3 lakhs for Category A	For a period of 5 years in Category A areas subject to condition that interest subsidy would be calculated on simple interest
  	Subject to a maximum ceiling of Rs 5 lakhs for Category B	For a period of 5 years in Category B areas subject to condition that interest subsidy would be calculated on simple interest
  	Subject to a maximum ceiling of Rs 7 lakhs for Category C	For a period of 5 years in Category C areas subject to condition that interest subsidy would be calculated on simple interest

• Reimbursement of cost incurred on inland carriage and inland transit insurance of Plant and Machinery

  Maximum Subsidy Rate	Maximum Subsidy Amount
  100% reimbursement	Subject to maximum of Rs 3 lakhs

• Reimbursement of the cost incurred on publishing export marketing brochures/product

  Maximum Subsidy Rate	Maximum Subsidy Amount
  Reimbursement of 50% of the cost incurred	Ceiling of Rs 3,00,000/- per Enterprise during its period of operation

You can learn about these categories of FPI subsidies to know the maximum subsidy rate, maximum subsidy amount and the limitations of the subsidy plans which are tabulated below.

The aim of the Food Processing Industry (FPI) subsidy in Himachal Pradesh is to improve the economy and the financial standing of local businessmen. The following are the features of Food Processing Industry (FPI) subsidy in Himachal Pradesh:

• Disbursement of loan will be simple : During the "moratorium" phase, when no revenue is being generated at the start of the project implementation, interest charged on the portion of the loan that has been paid out is calculated using simple interest. After the moratorium period expires, compound interest is charged to all loans; however, interest is diminished gradually.
• Improve in prospect buyer : To be efficient intermediaries, various advantages are provided to potential purchasers, including consumers, food processing industries (FPI), exporters, and more.
• Frequent disbursement of loans : To follow up the implementation period, the loan and FPI subsidy will be disbursed in phases over a tenure of 3 to 5 years with intervals of 3 to 6 months.