Government to give aid worth Rs50 crore to five food parks

Out of six food parks approved last year, five parks will receive Rs10 crore each in the next financial year for setting up their infrastructure

The Indian government has said that it will provide financial aid to five out of six food parks already approved across the country over the next financial year. The government is providing financial assistance of Rs50 crore to catalyse investment in these mega food parks. This amount will be released by the government in various tranches, depending on the status of development of each food park.

“We will give Rs10 crore each to the remaining five food parks in the next financial year as they have reached various stages of implementation,” said Ashok Sinha, secretary, ministry of food processing industries.

Last year, the government had approved six food parks in Uttarakhand, Andhra Pradesh, Jharkhand, Assam, Tamil Nadu and West Bengal. Out of these units, only two food parks—one in Uttarakhand and the other in Andhra Pradesh—are in an advanced stage of infrastructure construction.

Apart from the six mega food park projects, the government is also in the process of approving four more food parks out of the ten parks which applied for permission last year. The government had earlier decided to come up with 30 food parks till 2012 but now the authority has slashed down the number to 10. Currently, the government is in the process of giving permission to four food parks, which would receive the go-ahead in six weeks (approximately by mid-April 2010).

“We have received 37 proposals for mega food parks, out of which we are currently processing four proposals. A few of them are from private players also,” said Mr Sinha. 

The government is providing Rs50 crore in financial aid to these food parks to encourage the setting up of more parks. Last year, the government allocated Rs45 crore (Rs5 crore advance to five food parks and Rs15 crore to one food park) to six food parks. The project at Uttarakhand had received Rs15 crore last year and the remaining five projects will receive Rs50 crore (Rs10 crore each) in the next financial year.

The government’s contribution will be used to create infrastructure facilities like cold storage, incubation centres, warehouses, roads, core-processing centres, quality control labs, drinking water facilities and collection centres.

The ministry has received 37 proposals for mega food parks of which 16 are for Maharashtra, 10 for Karnataka, six for Punjab and five for Uttar Pradesh (UP). In Punjab, Mrs Bector’s Food Specialties (a part of the Cremica Group), Brattle Foods Ltd, International Fresh Farm Products Ltd, Maninder Rice Mills, Kolkata-based LMJ Ltd, and an entrepreneur from the US have shown their interest.  

In Karnataka, Capital Foods Ltd has shown interest in these food parks. In Maharashtra, Pantaloons Retail (India) Ltd, Paithan Mega Food Park, Temptation Foods Ltd, Dhoot Developers Pvt Ltd and Skil Infrastructure Ltd have shown their interest in these units. Temptation Foods Ltd is one of the applicants among the five with interest in these facilities in UP.

The government is encouraging the public-private partnership model for setting up the food parks. “The government gives Rs50 crore assistance for each food park, but that is not enough. You also need about Rs50 crore or more of private investment (in each food park) in infrastructure,” said Mr Sinha.

“We are encouraging three-four private players to come together to set up a food park so that the investments are shared,” he added.

The joint investment of three–four players lowers the cost of the land and infrastructure. Every food park would have a special purpose vehicle comprising around three entrepreneurs, representatives of banks and financial institutions and also from the food processing ministry. The special purpose vehicle will require an investment of around Rs120 crore, which includes the government’s contribution of Rs50 crore, for each food park.  

Every food park will have around 27 processing and ancillary units which will process about 1,80,000 tonnes per annum of raw materials—primarily comprising fruits and vegetables, rice and spices and will draw an investment of Rs250 crore. Each food park needs an investment of Rs370 crore and takes a minimum of two years for completion. Infrastructure Leasing & Financial Services Limited (IL&FS) is assisting the government in project management for all these food parks spread across the country.

User

COMMENTS

Sushil Singh

6 years ago

Though I appreciate the encouragement from Indian Government however we need more assistance from them. If they want they could increase their share in the project.

Mutual Fund prospectuses: Too much legalese, too little substance-II

Bizarre fund ideas and what SEBI should do to control them. This is the second part of a two-part analysis

A few months ago, Birla Sun Life launched a T-20 Fund. Taking advantage of the popularity of the shortest format of international cricket and its glamorous affair with Bollywood, the Fund is nothing but a fancy idea in the garb of innovation.

The T-20 Fund would have in its portfolio a selection of the top 20 growth companies. Have concentrated portfolios worked in the past? Will they work now, and why? Has the fund manager specialised in concentrated bets in the past? Does not a concentrated approach go against the main mantra fund management—diversification? The prospectus does not answer any of these questions.

Birla Sun Life is not alone. The JM Agri & Infrastructure Fund was another bizarre concept. How can one combine agriculture and infrastructure? The Fund’s bet was that successive governments have been making huge outlays for social infrastructure and the development of the rural sector and every Union Budget emphasises the importance of the agriculture and infrastructure sectors. How would the Fund pick stocks? There were no clues in the prospectus. All that the JM Agri & Infrastructure Fund’s prospectus said is that it has a research set-up that would identify investment opportunities through continuous monitoring of sectors and companies.

Is such meagre disclosure in prospectuses fair? Should the regulator, Securities and Exchange Board of India (SEBI) not ask many more questions before allowing fund companies to raise money? Why should companies wanting to raise money from Initial Public Offerings (IPOs) put through such extensive disclosures including their track record and not mutual funds? Fund after fund has been trying to launch schemes that look more like marketing gimmicks than a product of well thought out portfolio strategy. Why should the fund management companies look like competing with soap marketers and why should the regulator, SEBI, be an ally in the process?

Fund management is a business to gather more and more of assets. Fund companies make a regular income as a percentage of assets they hold. The higher the asset base, the higher their income. Quite clearly, fund companies are fully incentivised to raise more and more money. Maybe there is nothing wrong with this, as long as they can put the money to use efficiently.

However, for some reason, fund companies think that they cannot acquire more assets by selling existing funds. Hence, the need to launch new funds. Now, an equity fund, like a product like shampoo, can offer a limited variation in terms of its core features. To sell more and more of shampoo, personal product companies come up with different fragrances, colours and celebrity endorsements. Funds cannot use celebrities but they do compete with shampoo companies in their bizarre ideas, without being accountable.

New, strange ideas coming from funds can be bizarre like T-20 or it could simply be a portfolio approach that is illogical or not supported by empirical evidence. Take for instance, Tata Consumption Opportunities Fund launched late last year. The Fund, an open-ended scheme, had a mandate to invest in companies into production, distribution or trading of goods and services meant for mass consumption. The premise is that a period of rising gross domestic product (GDP) growth and consumption will lead to rising stock prices of consumer goods companies. Sounds logical. Except, it isn’t. {break}

First, it is wrong to assume that there is a definite correlation between these GDP growth numbers and rising stock prices. Between 1994 and 2003, GDP grew every year. Prices of many stocks were stagnant or on the decline. Second, it is assumed that the expansion in organised retail across the country would benefit the consumer goods industry. This is not necessarily true. Whether consumers buy their shampoo from a small grocery or a hypermarket makes little difference to consumer goods companies.

In early 2008, Benchmark, which pioneered the idea of exchange-traded funds in India, filed a prospectus to launch Citigroup’s method to offer Value and Momentum Quant Fund that will invest in stocks that offer the best combination of value and momentum. Does this idea make sense to the average retail investor who has been exhorted for years to go to mutual funds?

One other fund house announced the launch of something called a 50-50. No, it is not some kind of self-deprecating humour by a fund house referring to the fact that the outcome of their stock-picking is often random (50-50 probability). The name comes from a portfolio design under which 50% of the money will be invested in stocks selected across the market and the other 50% in stocks of just one chosen sector! It surely came from the head of an excessively creative marketing hotshot, who was possibly selling biscuits in his previous job and will probably sell insurance in the next. It makes zero sense.

Now, a fund can dare to launch such a scheme when it knows that SEBI will merely rubber-stamp ideas even if they are ill-researched, clever concoctions, which will only fatten the corpus of the fund houses at the cost of the investors. Such schemes usually mushroom during a solid bull run, when investors easily fall prey to fancy advertisements flashing unique investment opportunities. There is another issue and that is beyond prospectuses. Often fund companies deviate a long way from their prospectuses, labelling commercial vehicles as infrastructure stocks, power companies as banking stocks and media companies as technology stocks.

But there is a price to pay for the liberties fund companies take and the laissez faire approach of SEBI. The low penetration of mutual funds and their poor risk-adjusted performance against benchmarks is directly linked to the ease with which they can bring in new fund offers (NFOs) and do performance chasing. If SEBI had demanded rigour in NFOs and asked funds to stick to their mandates, investors’ confidence and participation would have been at a different level.

It is time SEBI introduced a proper, functioning screening model to identify those fund offers that seem dubious or far-fetched. The only time to do this is when the draft offer documents of these schemes land on SEBI’s doorstep for approval. This has to be followed by quarterly monitoring of whether the funds are actually following the mandates under which they had raised money.
 

User

COMMENTS

mohan bhatia

7 years ago

SEBI is old out to few vested intrests which are fooling the retail investor class by launching monthly NFO's but these are only meant to make feel the simple minded investor that he is investing in very spcialised tailor made fund-but this fact is also true with most of insurance plans-the most intelligent is LIC-the champion of insurance market-which makes every new "PLUS"plan during march ending and endowment plans every six months-so when govt itslef is biggest LOOTER-then there is no rescue for common man-

Court dismisses S Kumars’ defamation suit against Narmada Bachao Andolan

A Mumbai civil court has dismissed a defamation suit filed by S Kumar’s unit against the Narmada Bachao Andolan in relation to its Maheshwar Dam project

A Mumbai City Civil Court dismissed a defamation suit filed by S Kumars group company, Shree Maheshwar Hydel Power Corp Ltd (SMHPC) against the Narmada Bachao Andolan (NBA). In 2001, SMHPC had filed the suit against NBA seeking to restrain the movement from making public statements on its hydel power project in Madhya Pradesh.

According to a press note issued by the NBA, after hearing the defamation suit which has been going on for the last eight years, the Mumbai City Civil Court passed its final order and judgment on 17 February 2010.

“The Court found that the plaintiffs SMHPC had withdrawn whatever evidence had been submitted by them by way of affidavit and documents, by tendering a withdrawal application and had also at the last minute, withdrawn their witness SR Ganguli from being cross-examined,” the release said.

According to media reports last month, the environment ministry has issued a show-cause notice to the company building the Maheshwar Dam in the Narmada Valley after hundreds of affected people marched to the ministry demanding rehabilitation.

The Maheshwar Dam will submerge the lands and homes of 50,000 to 70,000 peasants, fishermen and landless workers in 61 villages, the NBA said.

User

COMMENTS

suzie

6 years ago

Narmada Bachao Andolan is a mass movement against the Sardar Sarovar Dam that is being constructed on Narmada River in Gujarat, India. This movement was initiated by several rural people including farmers, adivasis, environmentalists, etc. in 1985, when the idea was first presented. The river is the largest source of water in the western region of India, where people use this water for various occupation and other needs.

S R CHOUDHARY

6 years ago

my house was under this projest but my name not concider

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)