The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme is a centrally sponsored initiative by the Ministry of Food Processing Industries (MoFPI). This scheme was launched on 29th June 2020.
The scheme aims to formalize unorganized micro food processing enterprises in India and provide them with financial, technical, and business support. It is part of the Atmanirbhar Bharat Abhiyan Vocal for Local initiative, encouraging local entrepreneurs to participate in India’s growing food processing sector.
The scheme is designed to enhance competitiveness, improve quality standards, and increase the revenue of micro food enterprises. It also aims to integrate these enterprises into organized supply chains and strengthen their overall institutional support.
What are the Key Objectives of the PM FME Scheme?
The PM FME Scheme focuses on building the capabilities of micro-enterprises, Farmer Producer Organizations (FPOs), Self-Help Groups (SHGs), and cooperatives. Its main objectives include:
- Access to Credit: Helping micro food entrepreneurs, FPOs, and SHGs secure loans for business growth.
- Formalization: Transitioning 2 lakh unorganized micro enterprises into the formal sector.
- Integration with Supply Chains: Strengthening branding, packaging, and marketing to reach larger markets.
- Common Services: Providing access to processing facilities, laboratories, storage, packaging, marketing, and incubation centers.
- Capacity Building: Improving skills through training and entrepreneurship development programs.
- Institutional Strengthening: Supporting research, technical expertise, and institutional development in the food processing sector.
How Long is the Scheme Operational and What is Its Budget?
The PM FME Scheme is operational for five years, from 2020-21 to 2024-25, with a total outlay of ₹10,000 crore.
- Standard States: 60:40 ratio between Central and State Governments.
- Northeastern & Himalayan States: 90:10 ratio.
- Union Territories with Legislature: 60:40 ratio.
- Other UTs: 100% central funding.
The scheme directly targets 2 lakh micro food processing units for formalization and financial support.
What are the Key Features of the PM FME Scheme?
The scheme includes several features to support the growth of micro food processing enterprises:
| Component | Details |
| Credit-Linked Subsidy | Micro-enterprises receive a 35% credit-linked subsidy of the eligible project cost. Maximum subsidy per unit: ₹10 lakh. Beneficiaries must contribute at least 10% of the project cost, with the remainder financed through bank loans. |
| One District One Product (ODOP) Approach | Promotes district-specific products to enhance scale in procurement, processing, and marketing. Focuses on local strengths and regional specialties in food processing. |
| Support to Groups and Cooperatives | – FPOs/Cooperatives: Credit-linked grants and training to improve processing and marketing capabilities. – SHGs: Seed capital of ₹40,000 per member, maximum ₹4 lakh per SHG, for working capital and small tools. |
| Common Infrastructure Support | – Premises: Sorting, grading, warehouses, cold storage at farm gates. – Common Processing Facilities: Incubation centers for smaller units on commercial hire basis. – Training Centers: Product-specific skill training for entrepreneurs. |
| Branding and Marketing Support | – Development of standardized packaging and market-ready brands. – Marketing tie-ups with national and regional retail chains. – Quality control and compliance with FSSAI standards. |
| Capacity Building | – Entrepreneurship Development Programs (EDP+) tailored for micro food enterprises. – District Resource Persons (DRPs) provide hands-on support for compliance, skill development, and DPR preparation. |
Who is Eligible for PM FME Scheme?
The scheme covers multiple categories of beneficiaries:
| Beneficiary Category | Eligibility Criteria |
| Individual Micro Enterprises | – Existing unincorporated units employing less than 10 workers. – Preferably involved in ODOP products. – Ownership: Proprietary or partnership; applicant above 18 years, minimum education VIII standard pass. – Must contribute 10% of project cost and obtain bank loans. |
| Farmer Producer Organizations (FPOs) & Cooperatives | – Engaged in ODOP products. – Minimum turnover: ₹1 crore. – Must contribute 10% of project cost as internal resources or with state sanction. |
| Self-Help Groups (SHGs) | – Must be involved in food processing. – Eligible for seed capital or credit-linked grants for working capital, small tools, and capital investment. – Minimum 3 years experience in processing ODOP products. |
| National & State-Level Technical Institutions | – NIFTEM, IIFPT, and state-owned institutions eligible for capacity-building support. – Must have laboratories, pilot plants, and faculty for training and research. |
Get ready to crack government job exams with leading educators
What Financial Assistance is Available Under PM FME Scheme?
The details about the financial assistance provided under the PM FME scheme are as follows:
- Support to Individual Micro Enterprises: Credit-linked subsidy 35% (max ₹10 lakh); handholding for technical upgrades and DPR preparation.
- Support to FPOs, SHGs, and Cooperatives: Seed capital ₹40,000 per SHG member; credit-linked subsidy 35% for infrastructure (max ₹3 crore); branding and marketing grants up to 50%.
- Support for Common Infrastructure: Sorting, grading, cold storage, processing facilities, and incubation centers for small units.
- Capacity Building and Skill Development: EDP+ programs for entrepreneurship and skill training; District Resource Persons provide compliance and technical guidance.
How does PM FME Scheme Promote “Vocal for Local”?
The scheme emphasizes:
- Encouraging local entrepreneurship in rural and semi-urban India.
- Promoting regional products through the ODOP approach.
- Supporting women entrepreneurs, aspirational districts, and tribal areas.
- Integrating micro enterprises into formal supply chains for better market access.
What is the Status of the Food Processing Industry in India?
The food processing sector is an essential part of India’s economy. It involves converting raw agricultural products into processed foods, enhancing storability, taste, and convenience.
| Category | Details |
| Key Statistics | – Average growth rate: 8.3% annually (last 5 years ending FY21) – Employment in registered manufacturing sector: 12.2% (2019-20 ASI) – Agri-food exports contribution: 10.9% of India’s total exports (2021-22) |
| Challenges | – Lack of infrastructure: cold storage, transport, and processing facilities – Limited access to finance for small-scale enterprises – Inadequate quality control and hygiene standards, affecting consumer confidence and export potential |
| Government Initiatives | – 100% FDI under the automatic route in food processing – Special Food Processing Fund (Rs. 2000 crore) with NABARD for Mega Food Parks and processing units – Support through schemes like SFURTI, ASPIRE, PM MUDRA, CGTMSE, and National Rural Livelihood Mission (NRLM) |
How is PM FME Scheme Implemented Across India?
The PM FME Scheme is being implemented district-wise, with a focus on promoting One District One Product (ODOP) to strengthen local food processing strengths. In the financial year 2024-25, Bihar secured the first position for successfully implementing the scheme. The program provides a strong support framework that includes technical assistance, financial aid, access to common infrastructure, and marketing support to help micro food enterprises grow.
Additionally, District Resource Persons (DRPs) offer handholding support to ensure that units comply with FSSAI standards and adopt necessary technical upgrades for improved productivity and quality.
What are the Benefits of the PM FME Scheme?
The details of the benefits of the PM FME Scheme are as follows:
| Component | Benefits |
| Individual Micro Units | Credit-linked subsidy of 35%, handholding support, and skill training. |
| SHGs | Seed capital, credit-linked grants, training, and technical support. |
| FPOs/Cooperatives | Subsidy for infrastructure, marketing, and capacity-building support. |
| Common Infrastructure | Incubation centers, cold storage, processing units, and labs. |
| Branding & Marketing | Development of brands, packaging, quality control, and retail tie-ups. |
| Skill Development | Training, entrepreneurship programs, technical support, and compliance guidance. |
Key Takeaways
| Key Aspect | Takeaways |
| Scheme Name | Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PM FME) Scheme |
| Launch Date | 29th June 2020 |
| Implementation Period | 2020-21 to 2024-25 |
| Outlay | ₹10,000 crore |
| Focus Approach | One District One Product (ODOP) for district-specific food products |
| Beneficiaries | Individual micro-enterprises, FPOs, SHGs, Cooperatives, National & State-level technical institutions |
| Credit-Linked Subsidy | 35% of project cost for individuals (max ₹10 lakh), 35% for infrastructure (max ₹3 crore) |
| Seed Capital for SHGs | ₹40,000 per member (max ₹4 lakh per SHG) |
| Branding & Marketing Support | Grant up to 50% for groups and SPVs |
| Capacity Building | EDP+ programs, District Resource Persons for training, handholding, and compliance support |
| Key Benefits | Formalization of 2 lakh micro enterprises, enhanced competitiveness, integration with organized supply chains, improved access to finance, common infrastructure, and professional support |
| Challenges Addressed | Infrastructure gaps, limited access to finance, quality control, and hygiene standards |
| Government Support | 100% FDI, Special Food Processing Fund with NABARD, convergence with SFURTI, ASPIRE, PM MUDRA, CGTMSE, NRLM |
Multiple Choice Questions Based on Pradhan Mantri Formalisation of Micro Food Processing Enterprises
- When was the PM FME Scheme launched?
a) 2018
b) 2019
c) 2020
d) 2021
e) 2022 - What is the total outlay of the PM FME Scheme?
a) ₹5,000 crore
b) ₹8,000 crore
c) ₹10,000 crore
d) ₹12,000 crore
e) ₹15,000 crore - What percentage of project cost is provided as credit-linked subsidy to individual units?
a) 25%
b) 30%
c) 35%
d) 40%
e) 50% - How many micro food processing units are targeted under the scheme?
a) 1 lakh
b) 2 lakh
c) 3 lakh
d) 4 lakh
e) 5 lakh - Which approach is promoted under PM FME to enhance district-specific products?
a) One Product One Industry
b) One District One Product
c) One State One Product
d) One Village One Product
e) One Market One Product - What is the maximum subsidy limit for an individual micro unit?
a) ₹5 lakh
b) ₹7 lakh
c) ₹10 lakh
d) ₹12 lakh
e) ₹15 lakh - Which organizations are eligible for seed capital under the scheme?
a) FPOs
b) SHGs
c) Cooperatives
d) MSMEs
e) Large enterprises - Which ministry implements the PM FME Scheme?
a) Ministry of Agriculture
b) Ministry of Rural Development
c) Ministry of Food Processing Industries
d) Ministry of Commerce
e) Ministry of Micro, Small & Medium Enterprises - Which state ranked first in the implementation of PM FME in 2024-25?
a) Uttar Pradesh
b) Bihar
c) Maharashtra
d) Gujarat
e) Tamil Nadu - What is the key focus of PM FME?
a) Formalization of micro enterprises
b) Mega Food Parks only
c) Large-scale industrial units
d) Export-oriented units only
e) Technology startups
Also Check Out:
Answer Key:
| Question Number | Answer | Question Number | Answer |
| 1 | c | 6 | c |
| 2 | c | 7 | b |
| 3 | c | 8 | c |
| 4 | b | 9 | b |
| 5 | b | 10 | a |
- eSanjeevani Programme Online OPD India’s National Telemedicine Service
- Sahakar Pragya Initiative Strengthening Cooperatives and Empowering Rural India
- Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund
- Nai Roshni Scheme Empowering Minority Women in India
- Solar Charkha Mission Objectives, Features, and Benefits
- PM FME Formalization of Micro Food Processing Enterprises Scheme
Hi, I’m Aditi. I work as a Content Writer at Oliveboard, where I have been simplifying exam-related content for the past 4 years. I create clear and easy-to-understand guides for JAIIB, CAIIB, and UGC exams. My work includes breaking down notifications, admit cards, and exam updates, as well as preparing study plans and subject-wise strategies.
My goal is to support working professionals in managing their exam preparation alongside a full-time job and to help them achieve career growth in the banking sector.