PM Formalization of Micro Food Processing Enterprises (PM FME) Scheme

PM FME Scheme

Introduction

The Food Processing Industry in India has a large production base and a wide variety of food products, which is possible due to the age-old food culture and the combined efforts of the modern food processing units in the country. India is credited for being the:

  • Largest milk producing nation in the world
  • Largest producer, consumer and exporter of spices in the world 
  • Second largest producer of food grains, fruits and vegetables in the world

To further support the food processing industries in the country, the PM FME scheme was launched on 29th June 2020. The scheme is a part of the Atmanirbhar Bharat Abhiyan and the “Vocal for Local” campaign initiated by the Hon’ble Prime Minister Shri Narendra Modi.

About the Scheme 

PM FME is a centrally funded sector scheme with an aim to provide financial, technical and business support to micro food processing units in the country. The total outlay of the scheme is $ 1.3 Bn spread over a span of 5 years from 2020-21 to 2024-25. The funding under the scheme will be shared by the Centre and State governments in the following ratios:

  • For States and UTs with legislature: 60% by Centre and 40% by State/ UT
  • Himalayan and North Eastern States: 90% by Centre and 10% by State
  • UTs without legislature: 100% by the Centre

About 2 lakh micro food processing units will be given direct financial assistance in the form of credit linked subsidy under the scheme. Moreover, institutional architecture and common infrastructure facilities in the sector will also be given adequate support.

Objectives of the Scheme

The main objectives of the scheme include:

  • Formalization of micro units by means of GST, Udyog Aadhar and FSSAI registrations
  • Financial assistance to individual units for upgradation of food processing facilities
  • Quality improvement and skill development through trainings and technical knowledge
  • Financial assistance to Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), producer’s cooperatives for setting up common infrastructure facilities
  • Branding and marketing support to FPOs, SHGs and producer cooperatives
  • Support and assistance in availing bank loans and preparation of detailed project reports (DPR)

Capital Support

The PM FME scheme will provide financial assistance in capital investment activities under the following broad categories: 

  • For Upgradation of Individual Micro Food Processing Units, 35% credit-linked capital subsidy of the eligible project cost can be availed with a maximum ceiling of INR 10 lakh per unit.
  • For capital investment along the value chain, a 30% credit linked grant will be made available to FPOs, SHGs and cooperatives.
  • For SHGs engaged in food processing, INR 40,000 seed capital per SHG member would be provided in the form of grant for working capital and purchase of small tools. 
  • For development of common infrastructure facilities such as warehouse, cold storage and processing facility, a 35% credit linked grant would be made available to SHGs, FPOs, cooperatives, state owned agencies and private entrepreneurs.
ODOP

Inspired by the ODOP Scheme 

The PM FME scheme derives inspiration from the One District One Product (ODOP) Programme of the Uttar Pradesh (UP) government which aims to create product-specific traditional industrial hubs across 75 districts of UP. 

Under the PM FME scheme, the states will be required to identify one product per district based on the availability of raw material and existing clusters. The profile includes dairy and poultry products, pickles, local snacks and any other product which is widely produced in the district. Special preference would be given to micro food enterprises following the ODOP approach. Support in the form of common infrastructure and assistance in branding & marketing would be provided to such units. However, other food processing units which are not following the ODOP approach but are already operating would also be given adequate support. 

 

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