Pradhan Mantri Formalisation of Micro Food Processing

The Ministry of Food Processing Industries has stated that the PMFME Scheme has steadily expanded its reach, with significant progress achieved across major components as of 31 October 2025.

About PMFME Scheme

The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) is a Centrally Sponsored Scheme launched on 29 June 2020 by the Ministry of Food Processing Industries. The scheme aims to address the challenges faced by micro food processing enterprises and to harness the potential of groups, cooperatives, Farmer Producer Organisations (FPOs), and Self-Help Groups (SHGs) to support their upgradation and formalisation.

Objectives of the PMFME Scheme

The scheme seeks to build the capacity of micro food processing enterprises by:

• Enhancing access to institutional credit for micro entrepreneurs, FPOs, SHGs, and cooperatives.

• Integrating micro enterprises with the organized supply chain through improved branding and marketing.

• Supporting the formalisation of 2,00,000 existing micro food processing units.

• Providing access to common services such as processing facilities, laboratories, storage, packaging, marketing, and incubation centres.

• Strengthening institutions, research, and training in the food processing sector.

• Expanding access to professional and technical support for enterprises.

Outlay and Funding Pattern

The scheme has a total outlay of ?10,000 crore for the period 2020–21 to 2024–25.

• 60:40 sharing between the Centre and States.

• 90:10 for Northeastern and Himalayan States.

• 60:40 for Union Territories with legislatures.

• 100% Central funding for other Union Territories.

Coverage and Key Components

Under the scheme, 2,00,000 micro food processing units are directly assisted through credit-linked subsidies. The scheme also supports the development of common infrastructure and institutional mechanisms to accelerate sectoral growth.

The PMFME Scheme has four major components:

1. Support to individual and group micro-enterprises.

2. Branding and marketing support.

3. Strengthening of institutional capacity.

4. Establishment of a robust project management framework.

Financial Support under PMFME

Support to Individual Micro Enterprises

• Credit-linked subsidy of 35% of the eligible project cost, subject to a maximum of ?10 lakh.

• Minimum beneficiary contribution of 10%, with the remaining amount financed through bank loans.

• On-site skill training and handholding support for preparation of Detailed Project Reports (DPRs) and technical upgradation.

Support to FPOs, SHGs, and Cooperatives

• Seed capital assistance to SHGs up to ?4 lakh per SHG for working capital and purchase of small tools.

• Credit-linked capital subsidy of 35%, up to a maximum of ?3 crore, for setting up common infrastructure.

• Grant up to 50% for branding and marketing to groups of FPOs, SHGs, cooperatives, or Special Purpose Vehicles (SPVs).

• Skill training and handholding support for groups.

Eligible Beneficiaries

Eligible borrowers under the PMFME Scheme include:

• Farmer Producer Organisations (FPOs)

• Self-Help Groups (SHGs)

• Cooperatives

• Existing micro food processing entrepreneurs

New units, whether individual or group-based, are supported only under the One District One Product (ODOP) framework.

Significance of the PMFME Scheme

The PMFME Scheme plays a vital role in formalising the unorganised food processing sector, improving income opportunities, strengthening value chains, and promoting local food products, thereby contributing to Atmanirbhar Bharat and rural economic development.