Subsidy on Food or Agro-Processing Industry in Rajasthan- RIPS 2019

Rajasthan is the largest state of India in terms of area (342,239 square kilometers) covering 10.4% of India’s total land area. The state of Rajasthan is known for its rich historic and cultural legacy. The state has diverse agro-climatic conditions which makes it suitable for the cultivation of varieties of crops. Rajasthan is the number one producer of fenugreek, mustard, bajra, cumin, coriander, guar, etc. It accounts for more than 10% of the nation’s milk production and has one of the highest livestock populations in the country. These factors make Rajasthan a perfect destination for the food or agro-processing industry.

Major strength of Rajasthan for Food or Agro-processing industry

• Raw Material Availability:

Rajasthan is the number one producer of Psyllium, fenugreek, mustard, bajra, cumin, coriander, guar, etc. It accounts for more than 10% of the nation’s milk production and has one of the highest livestock populations, making it ideal for food processing units.

• Basic Infrastructure:

The State of Rajasthan ranks # 1 in Export Preparedness Index 2020 under the Landlocked states category. The state has a vast network of national highways and railways to provide excellent connectivity to major cities. It is well connected with the ports of Gujarat and Maharashtra.

• Power availability:

The State of Rajasthan has unique climatic conditions leading to a wide scope of solar and wind power generation. The State Government tries to ensure 24 hours power facilities to industries running in the State.

• Abundance of the workforce:

Agriculture and allied activities make up for 24% of the State’s GDP, with 62% of the total working population of the State dependent on this for livelihood. Due to this factor, there is no scarcity of trained and cost-effective workforce in the agro or food processing sector in Rajasthan.

• Supporting Agri Infrastructure:

(a) There are 6 food parks in Rajasthan. One mega food park is in Ajmer and other fives in Alwar, Kota, Jodhpur and Sri Ganganagar.

(b) 2 Agri Export Zones- 1 for coriander covering Kota, Baran, Jhalawar & Chitorgarh and 1 for cumin covering Nagaur, Barmer, Jalore, Pali and Jodhpur.

(c) Out of 344 existing Industrial areas (as per RIICO), there are 26 industrial areas which are marked as suitable for food processing industry.

(d) The State of Rajasthan has 8 inland container depots.

Food Processing Clusters in Rajasthan

Subsidies on Food or Agri Processing Industry in Rajasthan

The Government of Rajasthan is extensively promoting investment in Food Processing/ Agro-Processing industry in Rajasthan. Under, the Rajasthan Investment Promotion Scheme, 2019, the Agro/ Food processing industry has been considered as a thrust sector. As such, special subsidies and incentives are available for those entrepreneurs who are intending to establish food or agro-processing unit in Rajasthan. In the next section of this blog, we are enumerating all the benefits announced for food/ agro-processing units in Rajasthan under RIPS, 2019

Rajasthan Investment Promotion Scheme, 2019 (RIPS, 2019)

Subsidies for Agro-Processing Sector in Rajasthan

Note:

• Special incentives or subsidies are available for the agro-processing sector only in the case of those enterprises which are making an investment equal to or above Rupees 5 crores in the Agro-processing sector.
• Employment Generation Subsidy shall be provided @ 75% instead of 50% in case of employees belonging to Women, ST/SC, a person with a disability or in case the enterprise is providing more than 75% direct employment to persons domiciled in Rajasthan.

Subsidies for Food Processing Sector in Rajasthan

Note:

• Special incentives or subsidies are available for the food processing sector only in the case of those enterprises which are making an investment equal to or above Rupees 5 crores in the food processing sector.
• Employment Generation Subsidy shall be provided @ 75% instead of 50% in case of employees belonging to Women, ST/SC, a person with a disability or in case the enterprise is providing more than 75% direct employment to persons domiciled in Rajasthan.

Interest Subsidy in case of investment below Rs. 5 crores:

Entrepreneurs who are intending to invest less than Rs. 5 crores would be worried that they will not be able to avail the benefit of interest/ capital subsidy under RIPS, 2019. At this juncture, we would assure them not to worry as there is one more scheme of the Rajasthan Government which will give them benefits of interest/ capital subsidy. The scheme is named as “Mukhyamantri Laghu Udhyog Protsahan Yojana”.

Mukhyamantri Laghu Udhyog Protsahan Yojana (MLUPY)

Under this scheme, the aspiring entrepreneur can avail loans from financial institutions, commercial banks, private sector banks, small finance banks, regional rural banks, RFC and SIDBI, etc. The benefit of this scheme is available up to a loan of Rs. 10 crores. The nature of the loan will be a composite loan, term loan, and working capital (including CC Limit)

Interest subsidy under MLUPY

Under this scheme, the following interest subsidy is available to the beneficiaries on the loans for 5 years:

If you are intending to start a food processing or agro-processing unit in Rajasthan, it is the right time to initiate. You will not only get benefits of the above subsidies and incentives but also get the benefit of the peaceful business environment, natural conditions, and agricultural infrastructure of the State of Rajasthan.

Disclaimer: The above article is meant for informational purposes only. Readers are requested to act diligently and under consultation of a professional before applying the information contained in this article.