New Delhi, (IANS) Appropriate rules and guidelines are being framed by the government to encourage investment through Foreign Direct Investment (FDI) route in the retail market for the food processing industry.

“The Ministry of Commerce is framing the guidelines,” Union Food Processing Industries Minister Harsimrat Kaur Badal said at a press conference here.

“My ministry believes entry of multinational companies will play a catalytic role in transforming rural and farm economy if they enter the retail market. A suggestion was put forward by our ministry and the cabinet has approved the suggestion. This was reflected in the budget,” said Badal, who has been pushing for allowing 100 percent FDI in multi-brand retail for the food processing sector.

She, however, sought to clarify that foreign players looking to invest in the food processing sector in India will have to mandatorily divert about 15 per cent of funds in building infrastructure at the “farm gate level for the benefit of farmers”.

“We do not want a situation where MNCs open retail outlets but procure things from the regular mandis. This will hurt farmers only. Hence my ministry has proposed for 15 percent funds to be invested for infrastructure developments,” Badal said listing out various achievements of her ministry during last two years.

The government had agreed in principle for allowing 100 percent FDI in marketing and processing of food products and Finance Minister Arun Jaitley had made the announcement in the budget 2016-17 also.

But once the guidelines and related rules are framed by the Commerce Ministry, it would formally go before the Cabinet for necessary approval.

“The cabinet will collectively take a decision in due time,” Badal said.

Briefing media in presence of her colleague, Minister of State for Food Processing Sadhvi Niranjan Jyoti and senior officials, Badal said sustained efforts and crucial policy decisions have helped government bring down wastage of agricultural produce by about 10 percent from a whopping loss of Rs.92,000 crore.

“Various studies earlier revealed that there was loss of about RS 92,000 crore due to wastage of food and horticulture produce from harvest to market levels. Setting up of six new mega food parks across the country has helped bring down the wastage by 10 percent,” she said.

From 2008 to 2014, the UPA government had set up only two mega food parks, she said adding the National Democratic Alliance (NDA) government has raised it to eight by setting up new parks.

“There is already a net saving of Rs 3,000 crore and there is potential of saving Rs 9,000 crore once all these parks are operational,” she said.

Badal said by 2019, her ministry will create 42 mega food parks across the country.

The minister also launched a new online portal for bringing more transparency in developing and maintenance of food parks.

The new portal will allow online filing of claims for release of grant for the projects.

“The new initiatives will bring in transparency in disbursal of funds. And it will go a long way to ensure corruption-free governance in the country,” Badal said.