PM Formalisation of Micro food processing Enterprises (PMFME) Scheme

• Launched under the Aatmanirbhar Bharat Abhiyan, the Pradhan Mantri Formalisation of Micro food processing Enterprises (PMFME) Scheme is a centrally sponsored scheme that aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and to promote formalization of the sector and provide support to Farmer Producer Organizations, Self Help Groups, and Producers Cooperatives along their entire value chain.
• With an outlay of Rs. 10,000 crores over a period of five years from 2020-21 to 2024-25, the scheme envisions to directly assist the 2,00,000 micro food processing units by providing financial, technical, and business support for the upgradation of existing micro food processing enterprises.
• The Scheme is expected to generate a total investment of Rs. 35,000 crores and 9 lakh skilled and semi-skilled employment.

Features of PMFME

• One District One Product (ODOP) Approach:
  1. The States would identify food products for districts keeping in view the existing clusters and availability of raw material.
  2. The ODOP could be a perishable produce based or cereal based or a food item widely produced in an area. E.g. mango, potato, pickle, millet-based products, fisheries, poultry, etc.
• Waste to wealth products, minor forest products and Aspirational Districts.
• Capacity building and research: Academic and research institutions under MoFPI along with State Level Technical Institutions would be provided support for training of units, product development, appropriate packaging and machinery for micro units.
• Financial Support:
  1. Existing individual micro food processing units desirous of upgrading their units can avail credit-linked capital subsidy at 35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit.
  2. Support would be provided through credit linked grants at 35% for development of common infrastructure including common processing facility, lab, warehouse, etc. through FPOs/SHGs/cooperatives or state owned agencies or private enterprise.
  3. A seed capital (initial funding) of Rs. 40,000- per Self Help Group (SHG) member would be provided for working capital and purchase of small tools.

• The Central Government, in partnership with the State Governments, has launched "PM Formalisation of Micro food processing Enterprises (PMFME) Scheme" for providing financial, technical and business support for upgradation of micro food processing enterprises in the country.
• The scheme is operational for a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 Crore.
• Support to upgrade existing units or setting up of new micro units for individuals is provided through a credit linked grant @ 35% with maximum grant of Rs.10 lakhs.
• The Scheme also provides support to food processing units of SHGs/ FPOs/ Cooperatives for credit linked subsidy @ 35%, Seed Capital to SHGs, Incubation Centre, Common Infrastructure, Marketing & Branding and Capacity Building.
• Two lakh micro food processing units will be directly assisted with credit linked subsidy, capacity building and marketing & branding support.
• In 2020-21, against the Budget of Rs. 398.69 crore, expenditure incurred was Rs.398.43 crore including Letter of Authorizations. For 2021-22, BE is Rs. 500 crore and expenditure of Rs.104.80 crore has been incurred so far.
• For implementing the new centrally sponsored scheme, various preparatory steps have been taken by Central Government and States/ UTs, that included setting up of institutional mechanism, hiring of technical specialists to support the micro enterprises, preparing of training architecture, training of trainers at various levels, involving banks in the scheme for sanction of credit for upgradation of micro unit, identification of micro units for providing support under the scheme and providing hand holding support to them for upgradation and availing of the credit.
• For successful implementation of the scheme, National Programme Management Unit and State Project Management Units have been set up to assist the Ministry and State Nodal Departments.
• One District One Product (ODOP) have been approved for 707 districts of the country based on the recommendations of the States/UTs.
• Under the Capacity Building component, institutional architecture for training including special courses suited for existing micro units in food processing, preparation of course material, videos, presentations and trainings are provided to Master Trainers and District Level Trainers of States/ UTs for providing training to micro enterprises, their workers, SHG members, etc. Incubation centers have been sanctioned in the States at Krishi Vigyan Kendra, food processing colleges and other institutions to provide processing lines for utilisation by micro units and training.
• National level research institutions dealing with food processing have been involved in capacity building, incubation center and research activities for the Scheme. MIS for online filing of applications has been developed and operationalised and applicants are filing applications that are being appraised at the district level, being recommended to the banks for sanction of credit.