 "Mega food park plan needs to be redesigned: ICRIER")
Its guidelines also need to be tweaked to allow more flexibility in operation, a report on the evaluation of the scheme showed.
The report by Indian Council for Research on International Economic Relations (ICRIER), titled 'Evaluation of the Impact of the Scheme for Mega Food Park of the Ministry of Food Processing,' has been published on the ministry's website. The report was presented in July 2015.
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On the design of the scheme, the report said that since the ministry of food processing had a committed liability of sharing 50 per cent of the cost up to the extent of Rs 50 crore, it should monitor its progress on a fortnightly basis.
The mega food park scheme was launched in 2008-09 as a cluster-based and privately driven 50-50-50 scheme.
Under it, the ministry of food processing industries gave a grant of up to Rs 50 crore to build a Mega Food Park with a minimum land area of 50 acres, with at least Rs 50 crore investments from the park developer.
Around 42 food parks were allocated in 2008-09. Allotment to 17 was recently cancelled by the government and given to new bidders as work on them could not start due to various reasons.
The union Cabinet also some months back modified the guidelines to allow central government agencies to become shareholders in the Special Purpose Vehicles (SPVs) to run food parks without any restriction on their equity.
Earlier, central agencies were allowed to hold only up to 26 per cent stake in the SPVs and modification brought them on a par with the state governments.
The scheme, when launched, intended to facilitate establishment of an integrated value chain, with food processing at the core and supported by requisite forward and backward linkages.
That apart, the guideline of the scheme, which required completion of the scheme within a stipulated time, should be extended to five years as ensuring backward and forward linkages in food processing sector are time-consuming, the report said.
The ICRIER report also said that mega food park scheme should be flexible in terms of the land requirement, and based on that the amount of grant and contribution by the SPV should also be flexible.
"In some small and hilly states it is difficult to get 50 acres of land and these states can be given some flexibility on a case-by-case basis," the report said.
It also emphasised on the need for focusing on forward linkages at the time of evaluation of a project by the Technical Committee itself.
The detailed project reports or DPRs should be more realistic at least while quoting direct and indirect employment from a mega food park.
The ICRIER report also said collaboration and involvement of the state governments should be more on implementing the projects and giving them all the necessary clearances.
ICRIER also harped on strengthening the role of the bank and said there feedback should be taken while redesigning the scheme guidelines. It also called for dovetailing other similar schemes with the mega food processing scheme and link it with prime minister's 'Make In India,' initiative. The report also called for doing a proper mapping of the product and infrastructure of each mega food park, capacity utilization of existing park and closure of those parks which have not started operation after several months.
Finally, the report also said since different investors have different requirements and some (such as investors from developed countries) cannot apply under grant-based schemes; the ministry of food processing should have different schemes that cater to different types of investors.