Investment in cold chain infrastructure is likely to become attractive with the budget proposing to allow such projects to access Government's viability gap funding (capital subsidy) scheme.

At present, infrastructure projects from sectors such as ports, highways and power are allowed to access capital subsidy under this scheme. The norms for the scheme are defined by the Finance Ministry.

“To attract investment in this sector, henceforth, capital investment in the creation of modern storage capacity will be eligible for viability gap funding scheme of the Finance Ministry. It is also proposed to recognise cold chains and post-harvest storage as an infrastructure sub-sector,” said the Finance Minister on Monday.

To promote food processing, the budget has also proposed to extend full exemption from excise duty to air-conditioning equipment and refrigeration panels for cold chain infrastructure. He also proposed including conveyor belts in the full exemption from excise duty to equipment used in cold storages, mandis and warehouses.

“We would look at using these benefits for new collection centres that we are considering to set up under Fresh and Healthy Enterprises Ltd (FHEL),” said Container Corporation of India's (Concor) Managing Director, Mr Anil Kumar Gupta. FHEL is a subsidiary of Concor. The company has a 12,000–tonne controlled atmosphere storage facility at Rai near Delhi, and it supplies apples to organised retailers in Delhi, Mumbai, Chennai, Hyderabad and Bangalore.

The Finance Minister stated, “Despite growing production of vegetables and fruits, their availability is inadequate due to bottlenecks in retailing capacity. An estimated 40 per cent of the fruit and vegetable production in India goes waste due to lack of storage, cold chain and transport infrastructure.”

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