Monday, April 8, 2013


Encouraging establishment of food industries is always a daunting task. Even under the best of conditions, an industry will sprout only if there is adequate entrepreneurship among people. India is not a country with dearth of entrepreneurs having necessary motivation and drive and still the food processing sector lags behind with only those with deep pockets succeeding in establishing viable processing units, that too in some parts of the country. Naturally the question that begs for an answer is why this sorry situation in the country?

It is known that for viable industries to come up, it requires existence of a multifaceted environment which is a pre-requisite. While entrepreneurship is necessary among the people, other inputs like technical support, policy support, marketing experience and financial strength are absolutely necessary. If Indian past is considered Indians are entrepreneur-wise a capable people and the vast number of micro enterprises in sectors like food processing working across the country even without any prop from the government, though not most efficiently,  is a standing testimony to this truth. It is another matter that after unleashing the forces of economic liberalization or promoting capitalism since last two decades, big industrial players seem to be destroying the smaller players for getting market dominance. Where is the much cherished Khadi and Village Industries Commission supported manufacturing enterprises to day? Practically vanished. Why?

Reasons are not far to seek. First and foremost the food entrepreneurship is being smothered in the country due to technology starvation as new entrepreneurs brimming with business ideas have no where to go to seek the basic need of a venture, viz the manufacturing technology for establishing a viable production unit. Though there are more than 800 District Industry Centers (DICs) in practically every district in the country, they have been neglected, especially during the last two decades with most of them languishing as non-functional entities. Another equally important issue is the government support, rather lack of it at present, that is vital for success of any industry. Whether it is Ministry of Food Processing Industry (MFPI) in New Delhi or the State Food Industry Departments, the typical "Babu" approach and an inertia laden mindset, very little ground level help is forth coming to propel the entrepreneurial community. Added to this the draconian measures under the new heavily bureaucratized show piece of GOI viz The Food Safety and Standards Authority (FSSAI) have a chilling impact on new entrepreneurs.

What is tragic is that with a special purpose vehicle (SPV) like MFPI set up by the GOI as early as 1989-90 and with vast funds available at its disposal for bringing in a revolution in the food processing sector, it has unfortunately become a tightfisted book keeper. Those who sought funds from MFPI know the back breaking job of actually realizing the grant due to time consuming procedures and bureaucratic interference. Though MFPI is to be lauded for some of its schemes which appear excellent at least on paper, the fact that it is not able to disburse the budgeted funds fully year after year tells the real story. For example who can find fault with its much acclaimed National Mission for Food Processing (NMFP) where in it can extent up to Rs 10 crore for new enterprises setting up cold chains and cold storage units as a subsidy? Still why not much enthusiasm is seen among the prospective entrepreneurs in tapping this source of funding?

As said earlier money alone cannot sustain an industry. What is critical is technology without which entrepreneurs cannot even plan a project in food processing. For multinational companies they have the wherewithal to access technology from their own parent companies or from global sources by investing large sums of money. What about the micro enterprises and small companies? Where will they go? The domestic technology sources supported by public funds do not even allow these "chota" people even entering their "palaces" or "ivory towers", let alone help them with technologies and technical inputs. There are no incubation centers in food sector in India unlike in many other countries as GOI did not bother to finance such centers in Universities or industry corridors during the last several decades of neglect of this vital sector.

It is time that GOI wakes up to this reality and do some introspection regarding the lacunae in the system. Opening a NIFTEM or calling other existing moribund public funded R & D organizations by other fancy names does not solve the problem. There has to be a vibrant technology generating system that will ensure continuous development of efficient small scale technologies for new industries as well for the existing industry for upgrading their operations which can only revive the food entrepreneurship in India.    


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