Dr. Saumitra Chaudhuri Committee constituted by the Planning Commission in 2012 on Encouraging Investment in Supply Chains including Provision for Cold Storage for More Efficient Distribution of Farm Produce, citing a study conducted by National Spot Exchange Limited (NSEL) in 2010, has indicated cold storage requirement of 61.13 million MT. The existing capacity of cold storage is around 32 million MT in the country. Thus present gap is around 29 million MT.

             With the objective of creating integrated cold chain and preservation infrastructure facilities without any break from the farm gate to the consumer, Ministry of Food Processing Industries is implementing a Central Sector Scheme of Cold Chain, Value Addition and Preservation Infrastructure since 2008-09 in the country. The financial assistance @ 50% of the total cost of plant & machinery and technical civil works in general areas and 75% for NE region and difficult areas (North-Eastern States, Sikkim, J&K, Himachal Pradesh and Uttarakhand) subject to a maximum grant-in-aid of Rs 10 Crore per project is provided for setting up the cold chain infrastructure in the country. Integrated cold chain and preservation infrastructure can be set up by individuals, groups of entrepreneurs, cooperative societies, Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), NGOs, Central/State PSUs, etc. Under the scheme of Cold chain, Value Addition and Preservation Infrastructure, the Ministry has sanctioned 121 cold chain projects for implementation in the country.

The Ministry has also launched a Centrally Sponsored Scheme i.e. National Mission on Food Processing (NMFP) during 12^th Plan. The NMFP is being implemented by the State/UT governments. Under the Mission, financial assistance is provided for setting up cold chain infrastructure through following schemes:

(i) Scheme for Cold Chain, Value Addition and Preservation Infrastructure for Non-Horticultural Products:- For setting up of cold chain projects for non-horticulture produce like dairy, meat, poultry, fish etc., the financial assistance is provided as (a) Capital Subsidy: Grant-in-aid @35% of the bank appraised project cost for general areas, and @ 50% of the project cost for difficult areas including North-Eastern region, subject to maximum of Rs. 5 crore and (b) Interest Subsidy: @ 6% per annum subject to a maximum of Rs. 2.00 crore per project or actual interest accrued on term loan, whichever is lower, for a period of 5 year from completion of the project for general areas, and @ 7 % per annum subject to a maximum of Rs. 3.00 crore per project or actual interest accrued on term loan, whichever is lower, for a period of 7 years from completion of the project for difficult areas including North-Eastern Region and hilly States.

(ii) Scheme for Creating Primary Processing Centres / Collection Centres in Rural Areas:- Under this scheme, financial assistance is provided for setting up processing and preservation facilities in rural areas to enhance shelf life of perishable produce. Admissible grant-in-aid under the scheme is @ 50% of the eligible project cost for the general areas and 75% in North-Eastern Region, ITDP & Difficult Areas including hilly States, respectively subject to a maximum of Rs. 2.5 Crore.

iii) Reefer Vehicles:- Financial assistance to standalone reefer vehicle(s) and mobile pre-cooling van(s) for carrying & transporting, both horticultural & non-horticultural produce is provided under the scheme as credit linked back ended grants-in-aid @ 50% of the cost of New Reefer Vehicle(s)/Mobile pre-cooling van(s)upto a maximum of Rs. 50.00 lakh.

In addition, National Horticulture Mission (NHM), National Horticulture Board (NHB), and National Cooperative Development Corporation (NCDC) under Department of Agriculture and Cooperation, Ministry of Agriculture and Agricultural and Processed Food Products Export Development Authority (APEDA) under Department of Commerce, Ministry of Commerce and Industries, Government of India are also providing assistance for setting up cold storages under their respective schemes.  Various other incentives provided by the Government to promote the cold chain sector are :

1.      Under Section 35-AD of the Income tax Act 1961, deduction for expenditure incurred on investment is allowed if this investment is wholly and exclusively for the purpose of  (i) setting up and operating a cold chain facility; and (ii)  setting up and operating warehousing facility for storage of agricultural produce. This deduction is allowed to the extent of 150% provided the taxpayer has commenced its business on or after 01.04.2012.   

2.      Government has extended Project Imports’ benefits to Cold storage, cold room (including for farm level pre-cooling) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat. Consequently, all goods related to Food Processing, imported as part of the project, irrespective of their tariff classification, would be entitled to uniform assessment at concessional basic customs duty of 5%.

3.      All refrigeration machineries and Parts used for installation of  cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat under Tariff Head: Chapter 84 are exempted from Excise Duty. 

4.      Construction, Erection, Commissioning or installation of original works pertaining to post-harvest storage infrastructure for agricultural produce including Cold storages for such purposes are exempted from Service tax.

5.      Capital investment in the creation of modern storage capacity has been made eligible for viability gap funding scheme of the Finance Ministry. The cold chains and post-harvest storage has been recognized as an infrastructure sub-sector.

This information was given by the Minister of State for Food Processing Industries Dr. Sanjeev Kumar Balyan in a written reply in the Rajya Sabha today.  

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