Outlook of an Agro Based Industries in
India (Indian Express)
Mains Paper 3: Economy
Prelims level: Agro-based Industry
Mains level: Overview of Agro-based Industry
India’s 54.6 per cent population is still engaged in agriculture and
allied activities. Low income from the primary farm produce and lack of
investment in the processing and agri – value chain has caused rapid
reduction in farm profits and the farm occupation has now come under severe
Agro-industry encompasses not only the activities that utilize raw
materials sourced from agriculture, but also those provide input for modern
Based on the input-output linkages and the interdependence between
agriculture and industry, agroindustries can be of two types- (a) processing
industries or agro-based industries and (b) input supply industries or agro
Why Promote Agro-Based Industries?
India has the world’s 10th largest arable land, 20 agro-climatic regions
and 15 major climates. The harvest and post-harvest losses for agriculture
commodities are very high.
The total estimated economic value of quantitative loss was found to be
Rs. 92651 crore at average annual prices of 2014.
There is opportunity of an overall growth of agricultural economy as
only 2 to 3 percent of agri-commodities are processed.
(a) Food Processing and Beverages:
The Ministry of Food Processing Industries implements various Central
Sector Scheme to boost food-processing industries. It has recently
re-structured its schemes under the new Central Sector Scheme – Pradhan
Mantri Kisan Sampada Yojna (PMKSY).
The scheme components include setting up of (a) Mega Park (b) Integrated
Cold Chain and Value Addition Infrastructure (c) Food Safety and Quality
Assurance Infrastructure (d) Human Resources Development and Institution.
(b) Textiles Industries:
The Government has rolled out a number of initiatives. These include:
Scheme for Integrated Textiles Park, Integrated Processing Development
Scheme, Group Workshed Scheme, Common Facility Centre and Amended Technology
Up-gradation Fund Scheme, Scheme for the Development of the power loom
Sector (Power Tex),
SAMARTH – The Scheme for Capacity Building in Textiles Sector (SCBTS),
Comprehensive Handloom Cluster Development Scheme (CHCDS, Rebate of State
and Centre Taxes and Levies (ROSCTL) etc.
(c) Jute Industry:
The Govt. has attempting to modernize the jute mills by increasing their
productivity and bringing in modern technology and equipment.
National Jute Board’s Schematic interventions, providing capital subsidy
to jute mills to address their issues and challenges at hand.
(d) Khadi and Village Industry:
Ministry of MSME’s Khadi and Village Industries Commission (KVIC)
promotes setting up of various post-harvest agro and food based micro
industries like processing of pulse, cereals etc.
Through Prime Minister’s Employment Generation Programme (PMEGP), KVIC
tries to generate self-employment opportunities.
The inherent advantages of agri-industries are optimal utilization of
local agri-resources, mobilization of investment on a large scale, creation
of job opportunity, prevention of distress rural-urban migration and
reduction of disparity across sectors and regions.
Agri-based industries confirm to the notion of competitive advantage
both within and outside the country. They can play a role of a safety valve
to absorb surplus rural labour and can address the problem of large scale
unemployment/disguised employment in rural areas.
The challenge here is how effectively the government implements its
schemes and policy
interventions so as to ensure an all – round industrial growth in rural
areas without undermining the identity of village, its socio – economic
structure, agri-production systems and the basic agri-manufacturing
Q.1) With reference to the Hybrid-Annuity Model (HAM), consider the
following statements: 1. It is a mix of engineering, procurement, construction, and
2. Under this model, the government will release 90% of the total project cost
during construction, to be paid to the concessionaire in tranches linked to
Which of the statements given above are correct? (a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) None of the above
Q.1) Describe the initiatives taken by the government towards promoting
Agro-Based Industries. Why Promote Agro-Based Industries is needed?