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AN ANALYTICAL STUDY OF EMPLOYMENT GENERATION IN FOOD PROCESSING

INDUSTRY IN INDIA

Conference Paper · March 2018

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 AN ANALYTICAL STUDY OF EMPLOYMENT GENERATION IN
FOOD PROCESSING INDUSTRY IN INDIA
Mr. Vikrant V. Nangare Assistant Professor, Zeal Institute of Management & Computer
Application, Narhe, Pune, Contact No: 9158417471,
E mail: vikrant.nangare@zealeducation.com

ABSTRACT
In India, Food Processing Industry is increasingly seen as a potential source for driving the
rural economy as it brings about synergy between the consumer, industry and agriculture. The
Indian food processing industry is poised for huge growth, increasing its contribution to world
food trade every year. The food sector has emerged as a high-growth and high-profit sector due
to its immense potential for value addition, particularly within the food processing industry.This
sector covers the activities such as agriculture, horticulture, plantation animal husbandry and
Fisheries. The food processing industry is one of the largest sectors in terms of production,
consumption, and export and growth prospect.In India the food processing industry is a key
contributor to generation of employment.This sector provided varieties of jobs which satisfies
skilled &unskilled people to specialized one. The government of India is contributing
significantly to generate the employment by developing the food processing industry.
Key words: - Food Processing, India, Employment, Economic Development
1. INTRODUCTION
Food processing is the transformation of raw ingredients, by physical or chemical means into
food, or of food into other forms. Food processing combines raw food ingredients to produce
marketable food products that can be easily prepared and served by the consumer.Food
processing is mainly defined as a process of value addition to the agricultural or horticultural
produce by various methods like grading, sorting and packaging. In other words, it is a technique
of manufacturing and preserving food substances in an effective manner with a view to enhance
their self-life; improve quality as well as make them functionally more useful. It covers a wide
spectrum of products from sub-sectors comprising agriculture, horticulture, plantation, animal
husbandry and fisheries.
The Indian food industry is poised for huge growth, increasing its contribution to world food
trade every year. In India, Food Processing Industry is a growing sector that has gained
prominence in the recent years. Easy availability of raw materials, changing lifestyles and
favorable fiscal policies has given a considerable push to the industry’s growth.The Indian food
and grocery market is the world’s sixth largest, with retail contributing 70% of the sales. The
Indian food processing industry accounts for 32% of the country’s total food market, one of the
largest industries in India and is ranked fifth in terms of production, consumption, export and
expected growth. It contributes around 8.80 and 8.39% of Gross Value Added (GVA) in
Manufacturing and Agriculture respectively, 13% of India’s exports and 6% of total industrial
investment. The Indian gourmet food market is currently valued at US$ 1.3 billion and is
growing at a Compound Annual Growth Rate (CAGR) of 20%. India's organic food market is
expected to increase by three times by 2020.Indian food processing sector has potential to attract
US$ 33 billion of investment and generate employment of 9 million persons days by FY 2024.

2. OBJECTIVES OF THE STUDY

1. To understand the present scenario of Food processing sector in India.
2. To investigate the employment generation in food processing industry in India.
3. To enumerate how food processing is important for the overall development of Indian
economy.
4. To test the role of food processing industry in employment generation in India.

3. RESEARCH METHODOLOGY
We reviewed the relevant literature and analyzed secondary data available on food
processing sector. The data sources are from National Sample Survey Organization (NSSO),
National Skill Development Corporation (NSDC) report on Human Resource andSkill
Requirements in the Food Processing Sector, Study on mapping of human resource skill gaps
in India till 2022, National Bank for Agricultural and Rural Development (NABARD)
occasional paper on Status and Potentials of Village Agro-Processing Units/Industries,
Annual Survey of Industries (ASI) reports of the year 2016-17, Ministry of Food Processing
Industry (MOFPI) strategic plan and others.

4. INDIAN FOOD PROCESSING INDUSTRY: MARKET SIZE

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 % of
the sales. The Indian food processing industry accounts for 32 % of the country’s total food
market, one of the largest industries in India and is ranked fifth in terms of production,
consumption, export and expected growth. It contributes around 8.80 and 8.39 % of Gross Value
Added (GVA) in Manufacturing and Agriculture respectively, 13 % of India’s exports and six %
of total industrial investment. The Indian gourmet food market is currently valued at US$ 1.3
billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 %. India's organic
food market is expected to increase by three times by 2020.

The online food ordering business in India is in its nascent stage, but witnessing exponential
growth. With online food delivery players like Food Panda, Zomato, Tiny Owl and Swiggy
building scale through partnerships, the organised food business has a huge potential and a
promising future. The online food delivery industry grew at 150 % year-on-year with an
estimated Gross Merchandise Value (GMV) of US$ 300 million in 2016.

5. EMPLOYMENT IN FOOD PROCESSING SECTOR

According to food processing industry scenario it is observed that there is less employment
generated in this sector.

Contribution Of Food Processing Industry To India’s GDP

Through Manufacturing (FY16)

Food Processing Other

14%

86%

Source: MOFPI (2016)

The total number of persons engaged in registered food processing sector was 14%. During the
last 5 years ending 2016-17, employment in registered food processing sector has been
increasing at an Average Annual Growth Rate of 4.22%.

Policymakers have identified food processing as a key sector in encouraging labour movement
from agriculture to manufacturing. By 2024, food processing sector is expected to employ 9
million people in India. It is expected to generate 8,000 direct & 80,000 indirect jobs in the state.

Healthy contribution to employment generation (in million)

CAGR: 11.8%

1.5 1.6 1.6 1.7 1.8 1.6 1.7

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY24E

6. SKILL DEVELOPMENT INITIATIVE IN FOOD PROCESSING SECTOR

Availability of skilled manpower has been identified as one of the major challenges of Indian
Food Processing Industry. The Ministry of Food Processing Industries (MoFPI) is working in
close collaboration with Food Industry Capacity and Skill Initiative (FICSI), the Sector Skill
Council (SSC) in food processing and regularly guiding and assisting it in achieving its mandate.
The Ministry is helping to strengthen the SSC in this sector by helping in all possible ways to
complete the validations of the Qualification Packs (QPs) foe each job role that have been
developed and also helping in development of the course curriculum through National Institute
of Food Technology Entrepreneurship and Management (NIFTEM),an institute under this
Ministry. The Ministry is also conducting weekly meetings with all stakeholders to review the
progress
The FICSI is working on identification of job roles and competencies required for each job role
so as to develop National Occupational Standards (NOS) for different sectors of food processing.
Ernst& Young (E&Y) is the vendor selected by FICSI for this work. The scope of this work is to
determine what skills are required in different parts of our country with respect to food
processing activity being undertaken there. It shall include generic and domain specific skills
and shall cover all the major sectors of food processing domain viz:
 Fruits and Vegetables

 Food Grain Milling(including Oil seeds)

 Dairy Products

 Meat and Poultry

 Fish& Sea Food

 Bread and Bakery

 Beverages

 Soya Food Processing

 Packaged Foods

7. HUMAN RESOURCE REQUIREMENT AT STATE LEVEL

Various studies were conducted to assess the incremental human resource requirement across
States. This is given in the Table below.

Incremental Human Resource Requirement across States (2013-22)

Incremental HR
Incremental HR
S. No. State Requirements S. No. State
Requirements (In Lakh)
(In Lakh)

1 Andhra Pradesh 108.71 16 Maharashtra 155.22

2 Arunachal Pradesh 1.47 17 Manipur 2.33
3 Assam 12.34 18 Meghalaya 2.49
4 Chhattisgarh 30.44 19 Mizoram 1.4
5 Delhi 63.42 20 Nagaland 0.97
6 Goa 2.27 21 Odisha 33.46
7 Gujarat 57.57 22 Punjab 28.99
8 Haryana 34.85 23 Rajasthan 42.42
9 Haryana 0.93 24 Sikkim 1.48
 10 Himachal 12.06 25 Tamil Nadu 135.52
11 Jammu and Kashmir 11.23 26 Tripura 2.59
12 Jharkhand 44.53 27 Uttar Pradesh 110.11
13 Karnataka 84.76 28 Uttarakhand 20.61
14 Kerala 29.57 29 West Bengal 93.43
15 Madhya Pradesh 78.16 Grand Total 1203.34

7.1 Incremental Human Resource Requirement across 10 Sectors (2017-22)

The Human Resource Requirement Reports were commissioned by the National Skill
Development Corporation (NSDC) under the Ministry of Skill Development and
Entrepreneurship. The objective of these Reports was to understand the sectorial and
geographical spread of incremental skill requirements across 24 high priority sectors between
2013-17 and 2017-22.

The research provides a detailed overview of the sector from a skills perspective, assesses the
demand for skills, highlights key job roles, maps the available supply side infrastructure and
suggests actionable recommendations for the stakeholders in the system. The studies were
conducted through extensive primary interaction with key stakeholders including industry,
training providers, trainees, sector skill councils and government. These included more than
1000 industry experts, 500 job roles and 1500+ trainees.

The Environment Scan of 2016 updated the findings of the earlier Reports by factoring in the
likely impact of major flagship initiatives of the Government on human resource requirement.
The study estimated incremental human resource requirement of 103.4 million during 2017-2022
across these 10 sectors. A summary of the findings are presented in the Table below.

Break Up of Incremental Human Resource Requirement across 10 Sectors (Estimates in millions)

Incremental Human
Sector Projected
Resource
S.No Employment
Requirement
2017 2022 (2017-2022)
1 Agriculture 229 216 -13.5
 2 Retail 45.3 56 10.7
3 Logistics, Transportation & Warehousing 23 31.2 8.2
4 Education & Skill Development 14.8 18.1 3.3
5 Handloom & Handicraft 14.1 18.8 4.7
6 Private Security Services 8.9 12 3.1
7 Food Processing 8.8 11.6 2.8
8 Tourism, Hospitality & Travel 9.7 14.6 4.9
9 Beauty and Wellness 7.4 15.6 8.2
10 Furniture & Furnishing 6.5 12.2 5.7

8. CONCLUSION

Food processing sector has given a hope for betterment to the people engaged in agriculture. In
can be concluded that availability of physical, natural and human resources available in India the
food processing sector has a potential to change the socio-economic conditions of rural India.
This sector can play a significant role in diversification of agricultural activities, improving
value-addition opportunities and creating surplus for export of agro-food products. Food
processing is closely interlinked with the two of our core industries- manufacturing and
agriculture. Agricultural farm produce is the contributor to this sector while processing for value
addition is enabled by the technology applied in a typical manufacturing setup. The food
processing industry in India is one of the largest in terms of production, consumption, export and
growth prospects. However, there is significant scope for primary and secondary processing,
which would create employment opportunities at entry and middle levels. By 2022, the food
processing industry is expected to generate about 4.40 million additional employment
opportunities.

9. BIBLIOGRAPHY
1. Ministry of Food Processing Industries, Annual Report, 2016-17.
2. Report of IBEF - 2016.
3. Report of Ministry of Commerce, Government of India, 2016.
4. Report of the Agricultural and Processed Food Products Export Development Authority
(APEDA), 2016.
 5. IBEF, March 2017.
6. Ministry of Food Processing Industries, Annual Report, 2016-17.
7. Ministry of Food Processing Industries, Annual Report, 2015-16.
8. National Skill Development Corporation (NSDC), 2017
9. Deepak Bhagat and U.R. Dhar (September 2011), “Agriculuture supply chain
management: A Review”, in The IUP Journal of Supply Chain Management, Volume-
VIII, Number – 3, pages 7-25.
10. Tapan K Panda &Prashant K Mohanty ( September 2012), “Supply Chain Management
Practices & Scope for Bullwhip effect in Indian Dry Grocery Business”, in The IUP
Journal of Supply Chain Management, Volume- IX, Number- 3, pages 63-85.
11. AmarnathMitra&SunulBhardwaj ( September 2010), “Alignment of Supply Chain
Strategy with Business Strategy”, in The IUP Journal of Supply Chain Management,
Volume-VII, Number- 3, pages 49-65.

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