The Pradhan Mantri Formalisation of Micro Processing Enterprises (PM FME) scheme is a significant step by the Indian government towards bolstering the micro food processing sector. The scheme aims to provide comprehensive support to upgrade existing micro food enterprises across the country, enhancing their competitiveness and ensuring they can contribute effectively to the nation’s economy.
Overview of the PM FME Scheme
Launched as a part of the ‘Atmanirbhar Bharat Abhiyan’ or Self-reliant India Campaign, the PM FME scheme is designed to bring unorganized small food processing units under the formal sector. With a massive financial outlay of Rs.10,000 crores, the scheme extends from the fiscal year 2020-21 to 2024-25. It is a centrally sponsored initiative, meaning that funding is shared between the central and state governments.
Objectives of the Scheme
The primary goal of the PM FME scheme is to increase access to finance for micro food processors, thereby facilitating their upgradation. It also seeks to improve the capabilities of food processors in terms of planning, marketing, and management. The scheme endeavors to enhance the quality of food products and reduce wastage, which are critical components of a robust food supply chain. By doing so, it contributes to increased income for food processors and the creation of employment opportunities, particularly in rural areas.
Implementation Strategy
The Food Processing Ministry, in collaboration with the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM), is responsible for the execution of the PM FME scheme. This partnership leverages the DAY-NRLM’s extensive reach to identify and support Self Help Group (SHG) entrepreneurs in the food processing industry. The scheme is implemented in a cluster-based approach, ensuring economies of scale and collective benefits for the participants.
Financial Assistance and Technical Support
Under the PM FME scheme, individual micro food processing units can avail of credit-linked capital subsidies at 35% of the eligible project cost with a maximum ceiling of Rs.10 lakhs per unit. Additionally, support is provided for marketing and branding activities to help these enterprises build a distinctive identity and gain market penetration. The scheme also encompasses a component for providing seed capital to SHGs for loan purposes to their members for working capital and small tools.
Eligibility Criteria
To be eligible for assistance under the PM FME scheme, enterprises must be involved in the food processing sector and should be classified as micro-units as per the criteria set by the Government of India. These include farmers, cooperatives, self-help groups, and producer organizations engaged in the processing of agri-products.
Capacity Building and Training
An integral part of the scheme is the focus on skill development and training. The PM FME scheme facilitates training in technical skills, food safety, and quality control measures. It also provides managerial training to ensure that enterprises are not just producing quality products but are also adept at handling business operations efficiently.
Impact on the Food Processing Industry
The PM FME scheme has the potential to transform the micro food processing industry by integrating these units into the formal sector. It is expected to benefit nearly 8 lakh units through financial and technical assistance, thereby boosting the overall food processing sector in India. As these micro-enterprises form the backbone of the food processing industry, particularly in rural areas, their growth and formalization will have a ripple effect on the economy, including improvements in the standard of living for those involved in this sector.
By providing the necessary impetus for growth and sustainability, the PM FME scheme stands as a testament to the government’s commitment to strengthening the micro food processing sector and building a self-reliant India.
