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PM Formalization of Micro Food Processing Enterprises Scheme

  • 30 Jun 2021
  • 4 min read

Why in News

The Pradhan Mantri Formalisation of Micro food processing Enterprises (PMFME) Scheme, launched under the Atmanirbhar Bharat Abhiyan, completed its one year on 29th June.

  • The PMFME Scheme is currently being implemented in 35 States and Union Territories (UTs).

Key Points

  • Nodal Ministry:
    • Ministry of Food Processing Industries (MoFPI).
  • Features:
    • One District One Product (ODOP) Approach:
      • The States would identify food products for districts keeping in view the existing clusters and availability of raw material.
      • The ODOP could be a perishable produce based or cereal based or a food item widely produced in an area. E.g. mango, potato, pickle, millet based products, fisheries, poultry, etc.
    • Other Focus Areas:
      • Waste to wealth products, minor forest products and Aspirational Districts.
      • Capacity building and research: Academic and research institutions under MoFPI along with State Level Technical Institutions would be provided support for training of units, product development, appropriate packaging and machinery for micro units.
    • Financial Support:
      • Upgradation of Individual Micro Food Processing Units: Existing individual micro food processing units desirous of upgrading their units can avail credit-linked capital subsidy at 35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit.
      • Seed Capital to SHG: Initial funding of Rs. 40,000- per Self Help Group (SHG) member would be provided for working capital and purchase of small tools.
  • Implementation: Over a period of five years from 2020-21 to 2024-25.
  • Funding Details:
    • It is a centrally sponsored scheme with an outlay of Rs. 10,000 crore.
    • The expenditure under the scheme would be shared in 60:40 ratio between Central and State Governments, in 90:10 ratio with North Eastern and Himalayan States, 60:40 ratio with UTs with legislature and 100% by Centre for other UTs.
  • Need:
    • The unorganized food processing sector comprising nearly 25 lakh units contributes to 74% of employment in the food processing sector.
    • The unorganised food processing sector faces a number of challenges which limit their performance and their growth. The challenges include lack of access to modern technology & equipment, training, access institutional credit, lack of basic awareness on quality control of products; and lack of branding & marketing skills etc.
  • Status of Indian Food Industry:
    • The Indian food and grocery market is the world’s sixth largest, with retail contributing 70% of the sales.
    • The Indian food processing industry accounts for 32% of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.
    • It contributes around 8.80 and 8.39% of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13% of India’s exports and 6% of total industrial investment.
  • Other Schemes Related to Food Processing:

Source: PIB

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