The government today said it will create a special purpose vehicle (SPV) to attract private investment for setting up bulk foodgrains storage facilities.
"It has been decided that a SPV will be created for the purpose," Food Minister K V Thomas said at the national conference here.
The proposed SPV will woo private investment in creation of bulk storage facilities besides playing the role of a think-tank to undertake studies on bulk storage handling and transportation requirement for foodgrains, he said.
An SPV, an association of business entities, is usually formed to raise funds from the market.
The Central Warehousing Corporation (CWC), Container Corporation of India (CONCOR) and the National Horticulture Board will be the partners of the proposed SPV, Thomas said.
The minister said the Planning Commission has initiated a comprehensive study to suggest measures to create modern food grains storage infrastructure.
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The study is expected to be completed soon.
"With the increased requirement of foodgrain handling under the PDS and the proposed National Food Security Act, there is a need to substantially enhance and improve the country’s storage infrastructure through the involvement of the private sector," he said.
About 15 million tonnes of new storage capacity was being created by involving private entrepreneurs and through the efforts of the CWC and state warehousing corporation, he said.
In order to attract private investment, industry body FICCI Secretary General Amit Mitra suggested the proposed SPV seek soft loans from World Bank and International Monetary Fund at 3-4 per cent.
He also recommended the use of resources under the Rural Infrastructure Development Fund scheme for providing interest subsidy or capital investment subsidy for strengthening the vital sectors in the rural areas.
In addition, Mitra said investments in agri-market infrastructure by corporates should be included in the direct finance category of priority lending and there should be no upper limit on investments made in these sectors.