Process of Setting up Cold Storage with financial assistance in India

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27 March 2021, New Delhi: Government does not setup cold storage of its own. However, Government is implementing various schemes under which financial assistance is provided for setting up of cold storages for storage of agriculture produce including perishable horticulture produce throughout the country.

Department of Agriculture Cooperation and Farmers Welfare (DAC&FW) is implementing Mission for Integrated Development of Horticulture (MIDH) under which financial assistance is provided for various horticulture activities including setting up of cold storages. The component is demand/entrepreneur driven for which Government assistance in the form of credit linked back ended subsidy is available at the rate of 35% of the project cost in general areas and at the rate of 50% of the project cost in hilly and scheduled areas.

Under MIDH, cold storages are sanctioned by State and Central level Committees constituted for this purpose under operational guidelines of MIDH. The cold storages upto a capacity of 5000 MT are eligible for assistance under MIDH. The powers for sanction of projects up to project cost of Rs.500 lakh including setting up of cold storage have been delegated to State Level Executive Committee (SLEC). Projects with a project cost of more than Rs. 500 lakh and upto a capacity of 5000 MT are approved by the Empowered Monitoring Committee (EMC) of DAC&FW on recommendation of SLEC. For seeking assistance for setting up of cold storage under MIDH, promoter is required to submit the proposal to the concerned State Horticulture Mission.

Besides, National Horticulture Board (NHB) is implementing a scheme namely “Capital Investment Subsidy for Construction/Expansion/Modernization of Cold Storages and Storages for Horticulture Products”. Under the scheme, credit linked back-ended subsidy at the rate of 35% of the capital cost of the project in general areas and 50% in case of North East, Hilly States & Scheduled areas for construction/expansion/modernization of cold storage and CA storage of capacity above 5000 MT and up to 10000 MT is available. In case of North East region, the units with capacity above 1000 MT are also eligible for assistance. The Scheme is demand/ entrepreneur-driven. As per Scheme Guidelines, applicant has to make an online application to NHB for In-Principle Approval (IPA).  After receipt of IPA, applicant is required to get the Term Loan sanctioned from Bank/Financial Institution. Thereafter, NHB issues Grant of Clearance to start the project.  Upon completion of project using promoter’s equity and bank term loan, the subsidy claim is to be submitted to NHB.  After physical joint inspection of the project, subsidy claim is considered and approved by the Project Approval Committee of NHB.  Thereafter, NHB subsidy is released in the subsidy reserve fund account of the lending Bank/Financial Institution.

Further, Ministry of Food Processing Industries (MOFPI) is implementing a Scheme for Integrated Cold Chain, Value Addition and Preservation Infrastructure as one of the component of Pradhan Mantri Kisan Sampada Yojana with the objective of reducing post-harvest losses of horticulture and non-horticulture produce and providing remunerative price to farmers for their produce. Under the scheme, Ministry provides financial    assistance    in the form of grant-in-aid at the rate of 35% for general areas and

50% for North East States, Himalayan States, ITDP areas and Islands for storage and transport infrastructure and at the rate of 50% and 75% respectively for value addition and processing infrastructure subject to a maximum grant-in-aid of Rs. 10 crore per project for setting up integrated cold chain projects including irradiation facility without any break from the farm gate to the consumer. The integrated cold chain and preservation infrastructure can be set up by individuals, groups of entrepreneurs, cooperative societies, Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), NGOs, Central/State PSUs, etc. Standalone cold storages are not covered under the Scheme. The organization desiring to set up a cold chain project has to apply against EOI issued from time to time.

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