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Cold Chain Market In India
India is the second largest producer of fruits and vegetables in the world.
Due to lack of adequate cold storage facilities, more than INR 100 bn worth of fresh produce is wasted every year in the country.
In absence of improvements in the area of cold chain infrastructure, food wastage problem is likely to grow furthermore.
More modern facilities along with planned establishment between the point of production and market can help India improve the situation, helping it lower wastage and increase profitability.
India needs investment of $ 2 billion for low-cost cold chain tech
India needs $ 2 billion investment to set up low- cost and energy efficient cold chains in the country, Agriculture Ministry Radha Mohan Singh said,
Cold Chains can prevent Rs 13,600 crore worth food loss
Lack of cold and frozen supply chains leads to loss of fruits and vegetables worth over Rs. 13,600 crore annually in the country, according to report.
The report 'A tank of cold: Cleantech Leapfrog to a more food secure world' by UK- based Institution of Mechanical Engineers calls for urgent action to encourage roll out of sustainable cold chains in India to prevent unnecessary food loss, help alleviate hunger improve global food security.
As much as 50 % of perishable food items are lost every year in India due to lack of cold storages, it said.
India is the world's largest producer of milk, and second only to china in fruit and vegetables. Yet agriculture, which makes up 53 % of the workforce, generates just 15 % of GDP.
As of 2012, India had about 6,300 cold storages with a capacity of 30.11 million MT. But about 60% of them are located in Uttar Pradesh, Gujarat, west Bengal and Punjab.
The Indian government as well as NGOs involved in development initiatives and retailers need to priorities investment into affordable, reliable and sustainable cold chain, said the report.
NABARD earmarks Rs. 1000 crore for Promoting Cold Chain Infrastructure
National Bank for Agriculture and Rural Development (NABARD) earmarked Rs. 1000 crore for providing direct finance to cold chain infrastructure projects in the country, out of the Rs. 5000 crore Warehouse Infrastructure Fund announced in the Union Budget 2014-15. Cold Chain players in the public, private and cooperative sectors besides Farmers' Producers Organizations (FPOs) can now avail this direct credit window from NABARD at competitive interest rates.
Addressing various stakeholders recently, Dr. Harsh Kumar Bhanwala, Chairman NABARD said " NABARD has sanctioned warehousing projects worth Rs. 5000 crore during 2013-14 and we want to give a fillip to the much required cold storages with this specific earmarking of Rs. 1000 crores to begin with." These cold chain projects can benefit horticulture, dairy, meat and meat products, fish and fish products and other agriculture products to contain post production economic and quality losses. Shri. Dinesh Rai, Chairman, Warehousing Development and Regulatory Authority (WDRA), appreciated NABARD's decision to give boost to Cold Chain Infrastructure and called for creation of integrated clusters of cold storages with dedicated power feeders to address the issues of uninterrupted power requirements to such units.
Need for Greater Investment in Temperature controlled Warehouse
We cannot afford to have such loss for India. Industry and Government can work out winning strategies for every Links in the chain for development of Food supply chain.
Dream INDIA – A world food factory.
184 Million Hectares of Arable land.Gap of 37 million ton Cold Storages280 Million Metric tonnes of Horticulture ProducePost Harvest Losses @ 30% ?
POSSIBLE REASONSPoor InfrastructureInsufficient Cold Storage CapacityUnavailability of Cold Stores near to FarmsTransport Refrigeration
This calls for investments as the primary need for Cold Storages and cold chain to save perishable horticulture produce thus
strengthening and improving the food supply chain .
This can result in Reduce wastage Creation of small scale Industries and Employment
Do We…Does the government focus on this? Yes_ [ NCCD is putting up commendable efforts in bringing
knowledge and expertise in this field]
Do We… Do we have know how and technology for building
efficient Cold Storage / Cold Chain ? Yes_Do we have food processing units successfully working in
our country? Yes_
Govt. Support for cold storage Hon'ble Finance Minister in this budget speech for 2014-15,
announced the establishment of a dedicated fund with a corpus of Rs. 5000 crore in NABARD, for projects related with agriculture commodity storage infrastructure sector.
This fund is known as the Warehouse Infrastructure Fund (WIF) 2014-15. Under implementation - for eg. Nabard team has already started visiting Agra area for assessment on need of such assistance.
Excise duty is fully exempt for specified equipments for cold stores or transport.
Deduction of 150 % of capital expenditure incurred for setting up and operating a cold chain facility(for computing taxable income)
Service tax exempted for storage of agri cold storage and warehouse.
Service tax exempted for erection, installation, commissioning of cold storage equipments, transport, technical testing and analysis.
Investment Subsidy of 35% to 50% for cold chain projects available.
100% FDI through automatic route open for cold chain.Basic Custom duty @ 5% for imports specific for cold chain
projects.Basic Custom duty @ nil for import of reefer vans and containers.
Making Application for a Letter of Intent under the scheme“ Capital Investment Subsidy Scheme for Construction / Expansion / Modernization of Cold Storages / Storages"
COMPONENTS:-Credit linked projects relating to cold storages including controlled atmosphere (CA) and modified atmosphere (MA) stores, pre-cooling units, other storages for onion, etc., their modernization are eligible for assistance under this component.
PATTERN OR ASSISTANCE
The assistance will be as credit linked back-ended subsidy:-a) @35% of the capital cost of project in general areas and.b)50% in case of :- i) North East States:- Arunachal Pradesh, Assam, Meghalaya, Tripura, Mizoram, Manipur, Nagaland ii) Hilly Areas & iii) Scheduled areas. for a maximum storage capacity of 10000 MT per project.
Cold Storage Units Type:-1Basic Mezzanine Structure with Large Chamber
(of>250 MT) Type With Single Temperature Zone
NHB to take up projects with Capacity above 5000MT upto 10000MT
Sr.No.
Capacity Rate
Per MT In RS
Project Amount
Subsidy In RS
35% 50%
1 5001MT to 6500MT
7600 494 Lac(6500*7600)
172.9 Lac
247
Lac
2 6501 MT To 8000
7200 576 Lac(8000*7200)
201.6
Lac
288
Lac
3 8001 To 10000
6800 680 Lac(10000*6800)
238
Lac
340
Lac
Cold Storage Unit Type 2 –PEB Structure for multiple temperature and product use, more than 6 chambers (of<250 MT) and basic material handling
equipments.
NHB to take up projects with Capacity above 5000 MT upto 10000 MT
Sr.no.
Capacity Rate
Per MT In RS
Project Amount
Subsidy In RS
35% 50%
1 5001MT to 6500MT
9500 617.5 Lac(6500*9500)
216.12
Lac
308.75
Lac
2 6501 MT To 8000
9000 720 Lac(8000*9000)
252
Lac
360
Lac
3 8001 To 10000
8500 850 Lac(10000*8500)
297.5
Lac
425
Lac
Cold Storage Units Type 2 With Add On Technology For Controlled Atmosphere
NHB to take up projects with Capacity above 5000 MT upto 10000 MT
Sr.no.
Capacity Rate
Per MT In RS
Project Amount
Subsidy In RS
35% 50%
1 5000 MT 10000 500 Lac(10000*5000)
175
Lac
250
Lac
Technology Induction And
Modernization Of Cold Chain
NHB to take up projects with Capacity above 5000 MT upto 10000 MT
S. No.
Item Description Admissible Cost
i CA Generator * Inclusive of sensors, pressure equalising equipment, controls
Rs. 125.00 lakh-per unit, maximum 2
generators
ii Specialised CA Doors
Add-on specialisation to storage doors for positive pressure
chambers
Rs. 2.50 lac per door, maximum 20
doors
iii CA Tents Low cost enclosure of polyethyelene PVC, mylar or other impermeable body for existing or new cold stores
As per original invoice, maximum 5
enclosures
iv Programmed Logic Controller (PLC)
equipment
Electronic and electrical logic controls for machinery &
equipment for existing or new cold stores
50% of cost as per original invoice,
maximum Rs 10.00 lakh
S.No.
Item Description Admissible Cost
v Dock Levelers In existing or new storages
Max Rs. 7.00 lakh per unit, max 5 units
vi Warehouse Development &
Regulatory Authority (WDRA) /
Negotiable Warehouse
Receipt (NWR) system, equipment
Computers and printers & software for use with NWR of
WDRA
100% of cost as per original invoice, maximum Rs. 2.00 lakh
vii Specialised Packaging
Automated packaging lines for fruits &
vegetables with farm code labelling, with packaging material
100% of cost as per invoice, maximum Rs. 15.00 lakh per project
viii High Reach Material Handling Equipment(MHE)
Specialised material Handling equipment
Rs. 17.00 lakh per unit, for max 2 units.
Revised Operational Guidelines for release of subsidy in
respect of projects under NHB schemes
With a view to:- 1)promote horticulture and 2)creation of critical infrastructure for the sector and 3)to reduce the interest burden on the loan taken by the
farming communities/entrepreneurs. On projects considered under the credit linked back
ended subsidy scheme of the Board, Operational Guidelines have been revised for the
release of subsidy.
Procedure for submission of documents/papers for final subsidy claim to the Board
• i) The concerned FI/Bank which has provided credit for the project shall submit subsidy claim in prescribed format to respective office of NHB
To respective State Office of NHB-upto the project cost of Rs.50.00 lakh.
To NHB, HQ, Gurgaon where the project cost is above Rs. 50.00 lakh,
• ii) Upon release of 50% instalment of term loan by bank to promoter, NHB would release 100% subsidy to the concerned bank/FI as per prevailing cost norms.
• iii) The subsidy would be kept frozen by bank/Fl in the Subsidy Reserve Fund Account (SRFA) of the NHB.
Final subsidy claim on completion of project and upon release of final withdrawal of term loan by the Bank/Fl
A Joint Inspection Team (JIT) consisting:1) Representative from bank,2) NHB, State Hort./Agri. Department . will conduct joint inspection of the project
to settle the final subsidy claim based on eligible project cost on the basis of all the relevant parameters and approval of appropriate committee of NHB.
(a) Financial appraisal report of the bank. (b) Term loan sanctioned letter issued by the bank with detailed terms and conditions. (c) Term loan disbursement schedule for the project(d) Extract of term loan account of promoter.(e) Affidavit in Format-IV. (f) Release of at least 50% of term loan into project Bank loan
account.
Documents to be submitted with the subsidy claims :
Final subsidy claim shall be submitted to the Branch Office of NHB or to the Head Office, NHB as the case may be, along with following documents.
(i)Completion Certificate by Bank/FL
(i)Term loan disbursement details date-wise.
(i)Statement of Expenditure incurred certified by bank for project costing upto Rs. 50.00 lakh or by Chartered Accountant (CA), if project cost exceeds Rs. 50.00 lakh.
Documents to be submitted with final subsidy claim
Procedure for adjustment of borrower's account
1) The subsidy released by NHB to the Bank/FI in favour
of the project shall be kept in a separate account
termed as Subsidy Reserved Fund Account of NHB in
the name of the beneficiary.
2) The subsidy amount shall be released as soon as the
50% of the term loan is released to the beneficiary.
3) Subsidy so released shall be frozen in the Subsidy
Reserve Fund until the completion of the project, and
released finally after inspection.
4) Banks shall not charge interest from the beneficiary
to the extent of amount available in the Subsidy Reserve
Fund for which due credit be given to the beneficiary.
5) The full project cost excluding the subsidy amount and
the margin money contribution from the beneficiary would
be disbursed as loan by the banks and the repayment
schedule will be drawn on term loan amount.
Procedure for adjustment of borrower's account
6) Final settlement will be made only after Joint Inspection
by Bank, NHB and State Government representative, and
clear written advice of NHB with regard to the eligible
project cost and amount of subsidy to be released to the
promoters account.
7) Only on receipt of this advice, banks will release the
eligible subsidy to the beneficiaries, and refund the
balance amount (if any) to NHB along with the interest
of the amount to be refunded to NHB.
Procedure for adjustment of borrower's account
The bank/FI shall submit to NHB Utilization Certificate of the subsidy amount in prescribed format .
Submission of the Utilization Certificate by the Bank/Fl.
1) Bank branches will send the statement of account of SRFA of NHB quarterly to the state offices of NHB (and also the Head office of NHB in case the subsidy has been released directly by Head Office).
2)State Office In-charge shall review the subsidy releases every month and will monitor its utilization and refund.
3)State-wise register will be maintained by concerned Centre ln charge for centres and by the Finance & Accounts Division for Head Office.
4) Area Officers shall review the subsidy release, utilization and refund quarterly.
Mechanism to keep track of amounts released to various Banks by way of subsidy, amount utilized and the amount to be collected back
from banks that are not disbursed.
5) The bank will furnish the information regarding Account No. of SRFA,
name of the project, date and amount of subsidy released by NHB in
SRFA, date, amount of subsidy adjusted in term loan (with Account
number), date and amount refunded by bank to NHB.
6) Internal audit will be conducted (on test basis) of the subsidy release,
utilization and refund as per the provisions of the guidelines.
7) F&A Division shall overall monitor the releases, utilization and refund of
subsidy regularly and to bring out cases of default and issue suitable
advice to concerned Area Officers for taking corrective measures.
Mechanism to keep track of amounts released to various Banks by way of subsidy, amount utilized and the amount to
be collected back from banks that are not disbursed.
Other Provisions
a) The subsidy so granted to the lending banks/Fls shall be deemed as estimated (tentative) only.
b) Final amount shall be determined on the basis of the Joint Inspection Team by the Approval Committee on completion of the project.
c) The subsidy will be adjusted by bank only after receiving the written advice of NHB
for this purpose and balance amount would be refunded to NHB within 30 days. d) For any delay beyond it, bank will be liable to pay interest on the refundable amount. e) Requirement of application for the Letter of Intent (L01) will be voluntary for the promoter and would be issued only on the request of the promoter. This will not be required for claim of subsidy.
f) It is expected that the lending bank would undertake necessary inspection(s) and technical & financial appraisal to ensure that the project is new, meets the guidelines of NHB, and the promoter has clear land title or lease hold right over the land before the release of term loan.
Other Provisions
g) In case the project is not completed within 18 months from the date of release of
estimated (tentative) subsidy, the project would not be eligible for any subsidy, unless
the promoter has sought extension of time from NHB under unavoidable or
exceptional circumstances. In such cases, the bank would refund the subsidy to NHB
expeditiously or not later than 30 days after such period.
h) The decision of NHB with regard to eligibility and interpretation of the guidelines shall
be final and binding on the beneficiaries and banks.
NORTH EAST STATES ELIGIBLE FOR 50% SUBSIDY
HILLY AREAS ELIGIBLE FOR 50% SUBSIDY
SCHEDULED AREA ELIGIBLE FOR 50% SUBSIDY
