Industry News

Union Budget Proposes to Set Up Dairy Development Fund

Finance Minister announces setting up of a USD1.23 Billion dairy development fund

India: In the Union Budget 2017-18, Mr. Arun Jaitely, the Finance Minister of India, has proposed setting-up of a Dairy Processing and Infrastructure Development Fund with a corpus of USD1.23 Billion over three years. This Processing and Infrastructure Development Fund will be set up under the NABARD. In his Budget speech, Mr. Jaitley said that the fund, with an initial corpus of USD307 Million, which is to be quadrupled in three years, would be used to enable expansion of milk processing capacity in the country. India is the world’s largest producer of milk, accounting for nearly a fifth of global production. This allocation is expected to help the cooperatives in reducing their operating costs.

TechSci Research depicts that the allocation of fund is set to benefit the country’s overall dairy industry especially the local cooperative societies which are expected to reduce their operating costs. Consequently, their market share is set to increase during the forecast period.

According to a recently published report by TechSci Research, “India Dairy Products Market By Type, Competition Forecast and Opportunities, 2011 – 2021”, the market for dairy products in India is projected to grow at a CAGR of over 7% during 2016 - 2021. In 2015, North India dominated the country’s dairy products market, on account of increasing per capita expenditure, rising youth population, introduction of value added dairy products, changing consumption patterns, and growing penetration of international players. India dairy products market is witnessing a shift towards healthier products such as probiotic drinks, yogurts, etc. Few of the leading players operating in India dairy products market include Gujarat Cooperative Milk Marketing Federation Ltd., National Dairy Development Board, Karnataka Cooperative Milk Producers Federation Ltd., and Tamil Nadu Co-operative Milk Producers' Federation Limited, among others.

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