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About NABARD I Role and Functions I Subsidiaries I Associates I CIRCULARS I Model Bankable Projects

Credit Functions | Developmental and Promotional Functions | Supervisory Functions

Minor Irrigation Model Bankable Projects

Land Development
Agricultural Engineering
Plantation / Horticulture
DAL MILL Investment
Agricultural Engineering Credit
Introduction: This is a long-
Forestry / WasteLand term refinance
Pulses are basically grain legumes. They occupy an important place in human facility, it is
Fisheries nutrition due to their high protein content than cereal grains. In Indian dietary regime it intended for
occupies an important place. Since majority of Indians are vegetarians, they depend Investment in
Animal Husbandry largely on grain legumes (pulses) for their dietary protein. Legumes contribute a major agriculture and
portion of lysine in the vegetarian diet. They are also a fairly good source of vitamins allied activities
Medicinal & Aromatic like thiamine, niacine, riboflavin and much needed iron. Therefore its quality
Plants availability to the common man is a major challenge. Since recovery was poor in Technical
traditional technologies, adoption of modern technology will go a long way in meeting Services
Biotechnology the need of the common man. Department
This division is
State Specific Projects the service
Pulses Production in India:
provider on
Organic Farming technical issues
India is one of the major pulse growing countries in the world. The production of
pulses in India in 2001-02 was 13.19 million tonnes, which was about 27-28% of the
world production. Among the different pulses grown in the country, the respective
share of production has been : chickpea (bengal gram / chana) 40.50% ; pigeon pea
(tur /arhar) 17.90%; green gram (moong) 9.20%; black gram ( urad) 9.10% ; lentils
( masur) 6.10% and other minor pulses 17.20%. Among the important states engaged
in growing pulses have been : Madhya Pradesh 22.90% ; Uttar Pradesh 18.12% ;
Maharashtra 14.25% ; Rajasthan 10.84%; Andhra Pradesh 8.64% ; Karnataka 5.76%
and others 19.49% . Thus about 80.51% of the pulses supply is contributed by five
major states. Off late the production and area under pulses cultivation in the country
has been stagnated. This is because of unfavorable climatic and ecological factors,
non availability of high yielding varieties, improper research support, socio economic
factors and constraints in post harvest technology. As a result of stagnating
production and surging population, the per capita availability of pulses has come
down from 70 grams/ day in 1960's to 27 grams/day in 2001. The same was only
about 34% of the World Health Organization's recommendation of 80

Consumption pattern of pulses :

Most of the legumes in raw form contain a wide variety of anti-nutritional factors. In
addition, many of the grain legumes cause flatulence. Thus there exists a need for
processing the grain legumes into consumable form. The various grain legumes in
our country is consumed in the following ways:

Main Uses of Pulses in India are as follows:

Peas/Pulses Main forms of consumption

Green Gram (Moong Beans) - used as a vegetable and for making
Chick Peas (Desi type) - used for making besan (fine flour) which
is used for making sweets, snacks, and
mixed with wheat flour to make chapattis 12/13/2010
NABARD's Model Bankable Projects Page 2 of 8

(flat bread)
Pigeon Peas (Arhar) - used as a vegetable with meals
Black Gram (Urad) - used as vegetable with meals and for
making pappadam
Chick Pea (Kabuli type) - used as vegetable with meals
Red Lentils (Masoor) - used as vegetable with meals
(consumed mainly in East Indian states)
White Peas (Matar) - used as vegetable with meals. Also
used for making snack food
Cow Peas (Lobhia) - used as vegetable with meals
Kidney Beans (Rajmah) - used as vegetable with meals
Green Peas (Matar) - used as vegetable with meals and for
making snacks.

The Pulse Milling Process:

In India most of the pulses are consumed in dehusked and split form. Thus
processing of pulses assumes a lot of importance. Pulses processing industry helps
in processing the raw grain legumes/ pulses into edible form. Processing activity is
undertaken at 3 different levels. They are:

i. Primary processing: Primary processing activities consist of production of

cleaned, graded, packaged pulses.

ii. Secondary processing: Under secondary processing activities such as

dehusking, splitting, polishing, tumeric/ spices/ salt coating and powdered besan and
packaged dal are done.

iii. Tertiary processing: These activities mostly consist of preparation of roasted,

fried dal and other associated dal products.

Pulses are usually converted into Dal by dehusking/ decutilating and splitting. Both
dry and wet milling processes are employed. Mostly carborundum emery rollers are
used for dehusking and burr grinders for splitting the pulses. Decutilating is seldom
complete in single pass thereby requiring multiple passes. Each pass produces
around 1.5 to 2% fines thereby reducing the overall recovery of dal during the milling

Basic processes in dal milling are cleaning, grading, conditioning, dehusking, splitting,
separation, polishing and bagging. Major variation is involved with dehusking process
only. Dals like Arahar, Urad, Moong and Lentil are difficult to dehusk as a result
repeated operations by dehusking rollers are required. Repeated soaking, drying,
tempering is done to loosen portions of husk sticking after rolling operations.
Sometimes Linseed oil is also used during dry milling operation to impart shine or
better appeal to the milled dal.

The removal of the outer layer of husk and splitting the grain into two equal halves is
known as milling of pulses. To facilitate dehusking and splitting of pulses alternate
wetting and drying method is used. In India traditional milling methods produce
dehusked split pulses. Loosening of husk by conditioning is insufficient in traditional
methods. To obtain complete dehusking of the grains a large number of abrasive
force is applied resulting in high losses in the form of brokens and powder. Yield of
split & dehusked pulses in traditional mills are only 65 to 75% due to the above losses
compared to 88 to 89% potential yield.

Procedure for pulse milling: Basically two types of conventional pulses milling
methods is commonly used in India. They are :

 Wet milling operations

 Dry milling operations

Flow diagram of wet milling of pulses:


Cleaning è chaffs, dirts, etc. 12/13/2010
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Mixing with red soil


Dehusking and splitting -- mixture of husk, small broken and powder

Separation and Grading

Dehusked and split pulses


Flow diagram for dry milling of pulses:


Cleaning è chaffs, dirts, etc.


Pretreatment with Linseed Oil


Dehusking and splitting è mixture of husk, small broken and powder



Grade I Pulses

Description of various Unit Operations: 12/13/2010
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 Cleaning and Grading

Cleaning helps in removal of dust, chaff, dirt, grits, etc. from the pulses.
Grading is done to segregate the grain legumes of desired shape and size .
The same is done using a reel or rotative screen type cleaner.


An emery roller machine is used for cracking the husk layer and for scratching
of clean pulses passing through it. This is done for loosening the husk from
sticking to the cotyledons in order to facilitate subsequent oil penetration in the
following unit operations. Gradually the clearance between the emery roller
and cage (housing) is narrowed from inlet to outlet. Cracking and scratching of
husk takes place mainly by friction between pulses and emery as the material
is passed through the narrowing clearance. During the operation some of the
pulses are dehusked and split which are separated by sieving.

 Pretreatment with Oil

The scratched or pitted material passes through a screw conveyer and mixing
of some edible oil like linseed oil is done in it. The linseed oil is used at the
rate of 1.5 to 2.5 kg/tonne of pulses. Pulses coming out of the screw conveyer
are kept on floors for about 12 hours to diffuse the oil.


Pulses are conditioned by alternate soaking/ wetting , drying and tempering.

Moisture (3.5%) is added to the pulses after sun drying for a certain period
and tempering is done for about eight hours. The grain is dried in the sun
again. Until all pulses are sufficiently conditioned the whole process of
alternate wetting and drying is continued for two to four days. Pulses are
finally dried to about 10 to 12% moisture content prior to dehusking and

 Dehusking and Splitting

For dehusking of conditioned pulses carborundum coated emery rollers are

used. In one pass about 50% of pulses are dehusked. Dehusked pulses are
split into two parts. Dehusked split pulses are separated by sieving and the
husk is aspirated off. Unsplit dehusked pulses and tail pulses are again
dehusked and milled in a similar way. For complete dehusking and splitting
the whole process is repeated two to three times.


Polishing is completed by treating dehusked and split pulses with a small

quantity of oil and/or water.

Status of Pulses Processing Industry in India :

Dal milling industry is one of the major agro processing industries in India. Out
of the total production of 13.19 million tonnes of pulse in the country, 75% is
processed by these dal mills. There were about 2000 dal mills in the country
in 1972. The numbers grew steadily to 6000 units in 1982, 12000 units in
1995 and 14000 units during the year 1999-2000. Most of the dal mills in the
country are concentrated in selected pockets of the country i.e. pulses
producing areas such as Indore (MP), Jalgaon, Akola and Nagpur
(Maharashtra) and in or near major consumption centres such as Kolkata,
Mumbai, Chennai, Hyderabad and Delhi. The units are mostly traditional
ones. They are capital intensive and energy sapping in nature. The dehusking
efficiency in traditional mills is quite low. Moreover, the yield of dehusked and
splitted pulses in traditional mills is about 65-70 % in comparison to 88-89%
maximum potential recovery of splits. Thus, there is excessive loss of pulse
cotyleadons and embroyos in the form of brokens and powdered grains (5-
15%). The industry is also besieged with other problems such as low domestic
availability of pulses, high block capital and working capital requirement and
presence of large number of intermediaries in pulses procurement and
marketing of finished products.

Need for improved Dal Mills:

The present losses being encountered by the milling industry can be 12/13/2010
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minimized to a great extent by the use of improved dal mills. These dal mills
are highly versatile and energy efficient. Many agricultural universities , ICAR
institutions in the country have developed modern improved dal mills . Some
of these institutes are PKV Akola, CFTRI- Mysore, GBPUAT- Pantnagar,
CIAE- Bhopal, IIPR-Kanpur, TNAU- Coimbatore and IARI- New Delhi. The
improved dal mills have dehusking efficiency of about 95% and the yield of
split pulses is about 80-85% depending on the variety of pulse and
conditioning of the pulse grain.

Some of the improved dal mill machinery are :

Modern Machinery for Pulses Processing

i. Roller machine: Abrasive, carborundum roller cylindrical mill of 100kg per

hour capacity, run by 1.5kW electric motor is readily available in the market. It
has been developed for dehusking and splitting of food legumes viz.pigeon
pea gram and black gram. It consisted mainly of a 300mm diameter cylindrical
emery coated roller to give 13.5 to 14m/s speed at 850-900rpm and dal
(splits) recovery rate of 74 to 75%. Though the unit is similar to traditional
miller machine and gives more or less the same dal recovery, it is useful for
small scale production (8 to 10q per day) of dal in villages & towns.

ii. Cylinder concave dehuller: This machine has been developed by GB

Pant University of Agriculture and Technology, Pantnager. It consists of a
380mm long and 220mm diameter cylinder with trunketed surface, and a
concave. The kernels are fed to the unit along the full length of the cylinder. A
similar machine developed at IARI, New Delhi has cylinder concave set
consisting of 150mm diameter mild steel pipe of 6mm thickness coated with
36 week emery cloth to form a cylinder. The concave has 1x1mm grooves
along the length and spaced at 25mm apart. The unit runs on 1 H.P. electric
motor when operated at 1080rpm (8.48m/s) and gives a soybean dal yield of
85% at 8.69% moisture content (d.b) with 94% hulling efficiency. The energy
requirement of unit is 2.15 Wh/kg with a milling capacity of 140kg per hour.
These units have been proved to be of high utility value due to higher
recovery rates of splits and improved dehusking efficiency.

iii. Under runner disc (URD) Sheller: The URD sheller (300mm dia, 100mm
thick, 900rpm) can be used for milling of bengal gram. It give 83% recovery of
splits with 6% brokens. The energy consumption increases with increase in
feed rate upto 250kg/h and remains constant (2kW) upto 300kg/h and then

The Central Government is giving a big boost towards the development of this
industry. It has dereserved " Pulses Milling Sector" from the category of "
Small Scale Industries". Hence no license/ permission is required for setting
up of a pulse mill. The mills can obtain their raw material supply from any
source and there is no price distribution controls on manufactured products.

Considering the above factors, a model project of an improved dal mill has
been prepared with an installed processing capacity of 200 kg/hr operating in
a single shift of 8 hr/day for 25 days in a month thus totaling 480 MT/ annum.
The capacity of the unit can be suitably changed as per locational
requirement. It is hoped that establishment of such dal mill at village/
panchayat level can play a major role in development of the sector by
providing much needed processing facility to the villagers and contribution to
employment generation.

Investment Components of an improved dal mill:

The various investment components are as follows:

Land and site development:

The land requirement for establishing a modern pulse milling unit will depend
upon whether the unit will be using wet milling or dry milling operations for
conditioning the pulses prior to dehusking and splitting operations and the
method of drying of the soaked grain pulses. Generally 1.00 acre of land is
required for establishing an improved pulse milling unit having a processing
capacity of 480 MT /annum. The land should be with proper elevation. Low
lying areas should be avoided, else proper land filling, compaction and
consolidation should be done. Availability of suitable drainage facility, road
linkages and communication facility should also be ensured. The layout of the
pulse milling plant should be done in a manner that helps in smooth operation
of various unit operations in tandem to bring about optimal capacity utilization. 12/13/2010
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Additional area will be required for sundrying of soaked grain legumes. The
model tentative cost of land and land development charges has been
considered at Rs. 2.75 Lakh ( Rs. 2.00 Lakh being the cost of the land @ Rs.
2.00 Lakh per acre for 1.00 acre and the remaining Rs. 75,000/- being the
cost incurred for site development such as construction of fencing, internal
roads and drainage system etc.)

Civil construction:

The various sub components are as follows:

1. Raw material store
2. Finished goods store
3. Processing area
4. Office space
5. Machinery Spare Store
6. Gunny Bags Store
7. Panel Board Room
8. Toilet space
9. Miscellaneous space (Drying Platform)

The size and civil cost of these structures depend on the production capacity
of the project . The civil structures and estimated cost for the model pulse
milling plant is as follows:

Civil Structures
(Amt. Rs.)
S.No. Item Size / Unit Cost Total Cost

1 Raw material store 1000 sq.ft An average 300,000

uniform cost @
Rs. 300 / sq.ft

2 Finished Goods 1000 sq.ft An average 300,000

store uniform cost @
Rs. 300 / sq.ft

3 Processing area 1200 sq.ft An average 360,000

uniform cost @
Rs. 300 / sq.ft

4 Office Space 500 sq.ft An average 150,000

uniform cost @
Rs. 300 / sq.ft

5 Machinery Spare 500 sq.ft An average 150,000

Store uniform cost @
Rs. 300 / sq.ft

6 Gunny bags 500 sq.ft An average 150,000

storage room uniform cost @
Rs. 300 / sq.ft
7 Panel Board Room 500 sq.ft An average 150,000
uniform cost @
Rs. 300 / sq.ft
8 Toilet space 200 sq.ft An average 60,000
uniform cost @
Rs. 300 / sq.ft

9 Miscellaneous 1000 sq.ft An average 100,000

space (Drying uniform cost @
platform) Rs. 100 / sq.ft

10 Total 1,720,000


The model unit is based on the versatile dal milling technology developed by Central
Food Technology Research Institute (CFTRI), Mysore and the machinery is fabricated
under the supervision of the scientists from CFTRI. CFTRI, Mysore besides providing 12/13/2010
NABARD's Model Bankable Projects Page 7 of 8

assistance in the establishment of the dal mills also provides need based training
programme for successfully running these units.

Plant and Machinery:

The details of the nature and type of plant and machinery, their capacity, power
consumption, level of automation varies upon the market needs, nature and type of
the end products and the investment capacity of the entrepreneur.

The details of plant and machinery for the model project are as Precleaner-1 No.;
Dehuskers-2 Nos.; Grader-2 Nos.; Bucket Elevators-4 Nos.; Aspirators and Blowers-3
Nos.; Control Panels-3 Nos.; Destoner-1 No. and Pedal Mixer -2 Nos. The total cost
of plant and machinery has been estimated at Rs. 9.25 Lakh ( inclusive of the cost of
electrical motors for driving the machines). The plant and machinery proposed are as
per design provided by CFTRI Mysore. All these units are proposed to be arranged in
a streamlined layout to give continuity of operation.

Electrical and other items:

The various machines have to be connected to electrical motors of suitable power

ratings for supplying power to them. Accordingly AC -3 Phase motors of different
power ratings, varying from 2.50 Hp to 7.50 Hp will be required for powering the
various unit operations of the dal mill. The total cumulative Hp ratings of all these
motors will be in the vicinity of 15.50 Hp. The cost of the electrical motors have been
included along with the cost of plant and machinery. However, a cost of Rs. 50,000/-
has also been considered for internal wiring and associated electrical work.

Miscellaneous fixed assets:

A cost of Rs. 1.30 Lakh under miscellaneous fixed assets has been considered for
meeting the expenses for office furniture, weighing balance/scale, gunny bag sealing
machine, office equipment, fixtures, steel ladders and platforms for cleaning of
machines and equipment etc.



The total connected load for the aforementioned unit will be in the tune of 15.50 Hp or
11.56 kW. In addition to it power requirement to the tune of 1.00 kW will be required
for general lightening. Thus the total power requirement for the model project will to
the tune of 12.56 kW. Accordingly a a suitable power connection of 20 KVA is


The total water requirement of the unit will be 500 litres per day. Water is mostly
required for soaking and for moisture treatment of the grain pulses. Apart from it
water is also required for domestic comsumption purpose.

Standby diesel engines, generator sets and other utilities

Suitable standby power arrangement (DG sets of 20 KVA) may be made under the
project. Accordingly a cost provision of Rs. 95,000/- has been made.

Provision for fire fighting:

Necessary provision for fire fighting equipment may be made while installing the dal
mill. Accordingly a cost provision of Rs. 15,000/- has been made.

Provision for Insurance:

Necessary provision for insurance may be made while installing the dal mill.
Accordingly provision for insurance @1% of the original cost of fixed asset has been


A 5% contingency provision is made for unforseen expenses. 12/13/2010
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Organizational setup:

A minimum of five permanent employees: Two operators, one accountant cum store
keeper and two watch and ward person are required for the unit. Besides two skilled
and 10 unskilled workers are required under the scheme.

Eligibility of borrowers:

The borrowers can be proprietary and partnership firms, cooperatives, joint stock
companies, corporations, APMC boards, growers associations , NGOs, PVOs etc.


The repayment schedule has been calculated considering the tenure of term loan to
be 9 years , inclusive of a grace period of 2 years. However, banks are free to decide
upon the repayment schedule depending upon the net cash flow statements and
availability of adequate coverage to repay the term loan installment.

Interest rates for ultimate borrowers:

Banks are free to decide the rate of interest within the overall RBI guidelines.
However, for working out the financial viability and bankability of the model project,
we have assumed the rate of interest as 12% p.a.

Interest rate for refinance from NABARD:

As per the circulars issued by NABARD from time to time


Banks may take a decision as per RBI guidelines

Results of financial analysis are as under:

The financial analysis of the investment on the improved dal mill having an installed
capacity of 480 MT/ annum has been attempted and is placed from Annexures I to
VII. The project has a margin money component of 25% with the rate of interest on
term loan and working capital as 12% p.a. and 13% p.a. respectively. For this project,
the financial indicators of the investment are as under:

Net Present Value @ 15% DF (NPW) = Rs. 12.37 lakh

Internal Rate of Return (IRR) = 25.04 %

Benefit Cost Ratio (BCR) = 1.03:1

Average Debt Service coverage Ratio (DSCR) = 1.54:1


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