The Pradhan Mantri Formalisation of Micro food processing Enterprises (PMFME) Scheme, unveiled as part of the Atmanirbhar Bharat Abhiyan, celebrated its first anniversary on June 29. The scheme is currently in operation across 35 Indian states and Union Territories. The Ministry of Food Processing Industries (MoFPI) serves as the nodal ministry for this initiative.
Features of the PMFME Scheme
One of the main features of the PMFME Scheme is the One District One Product (ODOP) Approach. This approach encourages states to identify food products within districts according to existing clusters and raw material availability. These identified products could range from perishable produce, cereal-based goods, or popular local food items such as mango, potato, pickle, millet-based products, fisheries, poultry, and more.
Apart from the ODOP approach, the scheme also focuses on promoting waste-to-wealth products, minor forest products and Aspirational Districts.
Capacity Building and Research
The scheme aids academic and research institutions under the MoFPI and State Level Technical Institutions, offering support to train units, develop products, create suitable packaging, and provide necessary machinery for micro units.
Financial Support under the PMFME Scheme
Under the PMFME Scheme, existing individual micro food processing units aspiring to upgrade their unit can avail a credit-linked capital subsidy at 35% of the eligible project cost, with a maximum cap of Rs.10 lakh per unit. Additionally, seed capital of Rs. 40,000 is provided to each member of a Self Help Group (SHG) for working capital and the purchase of small tools.
Implementation and Funding Details
The PMFME Scheme will be implemented over a period of five years, from 2020-21 to 2024-25. With an outlay of Rs. 10,000 crore, the scheme is centrally sponsored. Depending on the region, funding will be shared in different ratios between Central and State Governments, or entirely covered by the Centre for certain UTs.
The Importance of the PMFME Scheme
In India, the unorganized food processing sector, consisting of nearly 25 lakh units, contributes to 74% of employment in the overall food processing industry. This sector, however, faces several challenges limiting growth and performance, including lack of access to modern technology and equipment, training, institutional credit, as well as basic quality control awareness and branding and marketing skills.
Status and Growth Prospects of the Indian Food Industry
India’s food and grocery market is the sixth largest globally, with retail contributing to 70% of sales. The Indian food processing industry, forming 32% of the country’s total food market, is one of the largest nationwide. It ranks fifth in terms of production, consumption, export and expected growth, contributing significantly to Gross Value Added (GVA) in Manufacturing and Agriculture, India’s exports, and total industrial investment.
Other Schemes Related to Food Processing
Additionally, the government has introduced schemes such as the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) and the Mega Food Park Scheme. While the PLISFPI offers incentives on incremental sales from products manufactured domestically, the Mega Food Park Scheme aims to create modern infrastructure facilities for food processing from farm to market with a cluster-based approach.
Last Modified: February 13, 2024