What is the PMFME Scheme

What is the PMFME Scheme

Introduction

According to government estimate, the unorganized food processing sector in the country comprises nearly 25 lakhs unregistered and informal food processing enterprises. With only 7% of investment in plant & machinery and 3% of outstanding credit, the unorganized enterprises contribute to 74% of employment, 12% of output, and 27% of the value addition in the food processing sector. Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises. Most of these units fall under the category of micro-manufacturing units in terms of their investment in plant & machinery and turnover.

See… Micro Small & Medium Enterprises

The PMFME (Pradhan Mantri Formalisation of Micro Food Processing Enterprises) is a centrally sponsored scheme launched to formalize and strengthen micro food processing enterprises across India. The scheme aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector and support Farmer Producer Organizations (FPOs), Self Help Groups (SHGs) and Producers Cooperatives along their entire value chain. The target is to formalize, upgrade, and support 2 lakhs micro food processing units through financial, technical, and infrastructural assistance.

The scheme has an outlay of ₹10,000 crore over 6 years (2020–2026). Expenditure share between centre and states is 60:40 for most states, 90:10 for Northeastern & Himalayan states, and 100% by Centre for UTs without legislature.

Objectives

The objectives of the scheme are to build the capability of microenterprises to enable:

Increased access to credit by existing micro food processing entrepreneurs, FPOs, Self Help Groups, and Co-operatives;
Integration with an organized supply chain by strengthening branding & marketing;
Support for the transition of existing 2,00,000 enterprises into the formal framework;
Increased access to common services like common processing facility, laboratories, storage, packaging, marketing, and incubation services;
Strengthening of institutions, research, and training in the food processing sector;
Increased access for the enterprises, to professional and technical support;

Key Features & Benefits

Capital Subsidy: Provides a 35% credit-linked capital subsidy.

For individual units / groups: Capped at a maximum of ₹10.0 lakh per unit.
For common infrastructure projects: Capped at up to ₹3.0 crore for groups/FPOs.

Seed Capital for SHGs: Offers ₹40,000 per member as seed capital for Self-Help Groups (SHGs) engaged in food processing, up to ₹4 lakh per SHG federation.
Marketing & Branding: Provides financial grants covering up to 50% for product marketing and branding support.
One District One Product (ODOP): Focuses on specific traditional or high-potential food products mapped across districts.
Capacity Building: Includes formal training in food safety, waste management, and business skills.

Eligibility Criteria

Age: Applicants must be 18 years or older.
Education: Minimum 8th-grade pass qualification.
Limit: Restricted to one person per family.
Target Beneficiaries: Individual micro-entrepreneurs, Self-Help Groups (SHGs), Farmer Producer Organizations (FPOs), and producer cooperatives.
Eligible project cost: The eligible cost includes Plant & Machinery and Technical Civil Work (<30% of eligible project cost). Cost of land, rental, or lease work shed is not covered. Technical civil work should not exceed 30% of the eligible project cost.

How to Apply

You can submit your application online through the official PMFME Portal