PM Formalisation of Micro Food Processing Enterprises (PMFME) Scheme
Why in news?
The scheme, originally set for 2020-25 with Rs 10,000 crore outlay, was extended through FY 2025-26 to align with the 15th Finance Commission cycle, maintaining the same support components like 35% credit-linked subsidies (max Rs 10 lakh per unit).
About PMFME Scheme
The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme is a centrally sponsored initiative launched on 29 June 2020 under the Atmanirbhar Bharat Abhiyan, with a total outlay of ₹10,000 crore (2020–21 to 2025–26). It aims to formalise and strengthen micro food enterprises, promote “Vocal for Local,” and integrate rural entrepreneurs into the formal economy.
Key Features of PMFME Scheme
- Objective:
- Support micro food processing enterprises (MFPEs) in upgrading technology, gaining access to credit, and formalising operations.
- Encourage One District One Product (ODOP) approach to leverage local strengths.
- Generate employment and empower self-help groups (SHGs), farmer producer organizations (FPOs), and cooperatives.
- Duration & Funding:
- 2020–21 to 2025–26.
- ₹10,000 crore outlay shared between Centre and States/UTs.
- As of FY 2024–25, ₹3,791.1 crore released to States/UTs.
- Financial Support:
- Credit-linked subsidy: 35% of eligible project cost.
- Beneficiary contribution: minimum 10%.
- Bank loan support: up to 90% of project cost.
- Seed Capital:
- Support for SHG members: up to ₹40,000 per member for working capital and small tools.
- In FY 2024–25, ₹376.98 crore seed capital approved for 1,03,201 SHG members.
- Capacity Building:
- Training programs for entrepreneurs in food safety, packaging, branding, and marketing.
- Over 1,16,666 beneficiaries trained nationwide.
Benefits for Entrepreneurs
- Technology Upgradation: Helps small units modernize equipment and improve productivity.
- Market Access: Branding and marketing support to compete with larger players.
- Employment Generation: Encourages self-employment and small-scale entrepreneurship.
- Cluster Development: Focus on ODOP ensures regional specialisation and value addition.
Example Impact
- In Kerala, a small snack unit received a loan of ₹3 lakh under PMFME, enabling purchase of new machines, doubling production, and expanding product range.
- In Andhra Pradesh, a roti maker unit was set up with 35% subsidy and 90% bank loan support, showcasing how the scheme fosters grassroots entrepreneurship.
Challenges & Risks
- Slow fund disbursement: Some states (e.g., Jammu & Kashmir) report central funding lagging behind approved project plans.
- Awareness gaps: Many micro entrepreneurs remain unaware of eligibility and application processes.
- Implementation hurdles: Coordination between banks, state nodal agencies, and beneficiaries can delay approvals.
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