A parliamentary panel has criticised the ministry of food processing industries for ‘chronic underutilisation’ of funds for implementation of flagship programmes, including Pradhan Mantri Kisan Sampada Yojana (PMKSY) and PM formalisation of micro food processing enterprises scheme (PMFME) for successive years. This reflected inadequate planning and execution by the ministry, the committee observed.
In FY25, the food processing ministry had spent only Rs 1020 crore till January against the revised estimate Rs 2530 crore of revised estimate, 40% of the allocated amount. The budget estimate at the beginning of fiscal was Rs 3052 crore. The standing committee on agriculture, animal husbandry and food processing in a report (2024-25) submitted to Lok Sabha has also stated that the past performance of the food processing ministry in terms of utilization of funds in the previous two fiscals – FY24 and FY23 has also not been satisfactory as they could utilize only about 75% of the revised budget estimate already revised downward from budget estimate.
The panel has noted that the allocation of Rs 4,364 crore for 2025-26 is the highest ever allocation for the food processing ministry.
It has observed that the onus is now on the ministry to create quality infrastructure, provide better opportunities for small and medium enterprises in the sector to grow, and foster innovation and competitiveness in the food processing industry.
In response to the under-utilization of the funds, the food processing industry has stated that “the scheme divisions could not spend the targeted amount in time due to non-receipt of viable proposals,”.
The ministry stated ,” it provides mostly financial assistance or capital subsidy to entrepreneurs selected on the basis of expression of interest issued from time to time. At times, difficulty in getting sufficient number of eligible proposals for release of funds is the main reason for inability to fully utilize the funds under scheme heads,”.
Raising concern about the under-utilisation of funds in the current fiscal as ‘it is poorer than previous fiscals’, panel has noted the food processing ministry to have a thorough review of the budgetary estimation process to ensure full utilisation of the allocated funds in future.
To address inadequate infrastructure and processing facilities, supply chain issues, food processing ministry implements schemes – PMKSY, PMFME and production linked incentive scheme.
Officials said these schemes help in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet for promotion, overall growth of food processing sector, reducing wastage of agricultural produce, increasing the level of processing and enhancing export of the processed foods.