PMFME Scheme Records Steady Expansion, Key Milestones Achieved

Why in News ?

The Ministry of Food Processing Industries has reported significant progress under the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme, with major components showing substantial improvement as of 31 October 2025.

Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme

Launched on 29 June 2020, the PMFME Scheme is a Centrally Sponsored Scheme aimed at strengthening and formalising India’s vast network of micro-food processing enterprises.

It focuses on bringing traditional, unorganised, and small-scale food processing units into the formal economy, improving credit access, infrastructure support, branding, and standardisation.

Objectives of the PMFME Scheme

The scheme seeks to build the overall capability and competitiveness of micro food enterprises through:

1. Enhanced Access to Credit

• Support to existing entrepreneurs, FPOs, SHGs, cooperatives
• Facilitation of credit-linked subsidies

2. Integration Into Organised Supply Chains

• Assistance in branding, packaging, and market linkages
• Promoting cluster-based development

3. Formalisation of 2 Lakh Units

• Target to formalise 200,000 existing enterprises across India

4. Strengthening Common Services

• Shared processing facilities
• Storage, labs, incubation centres
• Training and R&D support

5. Improved Access to Professional Expertise

• Technical assistance
• DPR preparation and handholding support

Scheme Outlay

• Total Outlay: ₹10,000 crore for 2020–25
• Cost-Sharing Pattern:
  • 60:40 – Centre : States
  • 90:10 – Northeastern & Himalayan States
  • 60:40 – UTs with Legislatures
  • 100% Central Funding – Other UTs

Coverage of the Scheme

• Target of supporting 2,00,000 micro food processing units through direct, credit-linked assistance
• Support for creating common infrastructure, institutional systems, and project management structures
• Alignment with the One District One Product (ODOP) approach to boost local value chains

Key Benefits Under the PMFME Scheme

1. Support for Individual Micro Enterprises

• 35% credit-linked subsidy, up to ₹10 lakh
• Minimum 10% beneficiary contribution
• Remainder financed through bank loans
• Skill training and technology upgradation assistance

2. Support for FPOs, SHGs & Cooperatives

• Seed capital of ₹4 lakh per SHG
• 35% capital subsidy (up to ₹3 crore) for common infrastructure
• 50% grant for branding & marketing
• Handholding and skill development support

3. Institutional Strengthening

• Capacity building in food processing institutes
• Support for research, skilling, and incubation

4. Project Management Framework

• Strengthening implementation through a multi-tier system
• Emphasis on monitoring and technical support mechanisms

Eligible Beneficiaries

• Farmer Producer Organisations (FPOs)
• Self-Help Groups (SHGs)
• Cooperatives
• Existing micro food processing entrepreneurs
• New units (only under ODOP category)

• FAQs 1. What is the main purpose of the PMFME Scheme ? To formalise and upgrade micro food processing units, enhancing credit access, infrastructure support, and market connectivity. 2. How many enterprises will be supported ? The scheme aims to formalise and assist 2 lakh micro enterprises across India. 3. What is the level of subsidy available for individuals ? Individual micro units receive 35% credit-linked subsidy, with a cap of ₹10 lakh. 4. Are SHGs eligible for seed capital ? Yes. SHGs receive ₹4 lakh per group as seed capital for member-level support. 5. What is ODOP and how is it linked to PMFME ? One District One Product (ODOP) promotes district-specific food products. New units under PMFME are supported only if they align with the district’s ODOP selection.