PMFME Scheme: There have been major changes within the micro food processing sector in India.
To legitimize the operation of 2 lakh micro food processing units until 2025-2026, the PMFME scheme was as part of the Aatmanirbhar Bharat Abhiyan. The scheme was created by MoFPI in 2020, and currently has a fund of 10,000 crores.
Moreover, it is certainly a major achievement for this sector to have transferred from unstructured and unorganized peripheral status to a reputable and marketable structure.
The scheme is providing more power to these micro units as they are able to increase their productivity, gain better brand recognition and improved market access on a domestic and global scale.
Current Scenario: Micro Food Sector in India
The most important aspect of this industry is the numerous unorganized micro units within the food processing sector. PMFME seeks to incorporate these unorganized units as players in the structured supply chains of the food processing industry.
Moreover, approximately 74% of food processing businesses are in the unorganized sector, and most of these businesses remain unregistered. Of the units that are registered, many of them are still unproductive, and have little to no brand recognition, and low access to financing.
Under the scheme, micro units are provided a subsidized loan of 10 lakh rupees, and the scheme covers 35% of the total cost of the project.
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PMFME Scheme Objectives
The scheme aims to achieve five main objectives.
Encouraging micro entrepreneurs, self-help groups (SHGs), farmer producer organizations (FPO), and cooperatives. Improved branding and marketing leads to better organized supply chain integration.
200,000 informal units are targeted to be transitioned to the formal sector. Common facilities such as laboratories, packaging, and storage, and incubation centers are also provided. Other focuses include research, training, and strengthening the institutions.
Key Provisions: How PMFME Empowers Entrepreneurs
For Individual Micro Units
The PMFME scheme covers individual micro units and entrepreneurs, including sole proprietorships, partnership firms, cooperatives, FPOs, NGOs, private limited companies, and a 35 percent capital subsidy is also provided, while the beneficiary must cover 10 percent of the project cost, and the remainder must be financed by a bank loan.
Moreover, the scheme covers expenses incurred for the acquisition of plant and machinery, as well as construction and marketing expenses.
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For Common Infrastructure Projects
Support for Common infrastructure projects goes to FPOs, SHGs, producer companies, government and allied bodies, and cooperatives. The cap for subsidy is 3 million rupees.
However, projects granted also get a 35% subsidy. Other facilities by the government include cold chains, value chain development, incubation centers, and shared infrastructures.
ODOP Approach: A Catalyst for Localized Growth
Each district picks a particular product, for example, a fruit, a traditional food, a grain, a minor forest product, or a local snack, which aligns to the district’s resources.
Specialization under the ODOP program creates a greater focus on specialization and lowers the cost of raw materials. The program also provides a marketing and branding supply chain throughout the region and creates new opportunities by integrating existing demand in the marketplace, instead of new market development.
How the PMFME Scheme Supports New Startups and Entrepreneurs
New entrepreneurs are supported by the PMFME scheme through decreased out-of-pocket investment owing to government grants and subsidized bank loans. To first-time entrepreneurs, the scheme provides skill training development, mentoring, business incubation, and hands-on training, which are critical.
Moreover, improved product packaging and market accessibility are marketing and branding supports for new micro enterprises. Accessibility throughout the application and approval stages is taken to enhance transparency through a digital Transparency through a digital online MIS portal.
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NPCS Contribution: Supporting Business Development
NPCS provides specialized services to entrepreneurs who intend to apply to the PMFME scheme. The team at NPCS provides assistance in the preparation of the Market Research and Techno-Economic DPR.
The NPCS DPR includes process flow diagrams, suggested machinery and raw material inputs, market demand, and detailed financial analyses.
With the help of NPCS, entrepreneurs are able to prepare bankable DPR documents, obtain financing, and grow the food processing parts of their enterprises with confidence.
Some of the Business Opportunities Available Through the PMFME Scheme
Ready to Eat Millet Products
New, small, micro, food processing enterprises can produce breakfast meal kits, snack bars, and gluten-free pasta that are made with locally milled millets of superior quality. This type of product is easily marketable.
Nut and Seed Processing
If the district has ODOP products like cashew nuts and sesame seeds, it can set up a roasting and nut butter making business. Domestically owned brands can help fill the market gap with nut butters serving the plant-based food market.
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Regional Snack Specialties
Khakra, banana chips, and papad are examples of snacks that can be made and marketed in a hygienic manner. These snacks can also be sold in retail and online and are perfect for the business.
Fruit Pulp and Juice Concentrates
There is no need to source concentrated juices from abroad. Juice concentrate imports can easily be replaced by the sales from mango, litchi, and pineapple pulp from domestic drink manufacturers and drink exporters.
Dairy Micro-Processing
Demand for fresh dairy products is high in urban markets, and micro units can capitalize on this by selling products like fresh paneer, ghee, and flavored milk.
Herbal and Functional Beverages
Entrepreneurs can make natural tonics, herbal teas, and kombucha using local products to create energizing and unique beverages.
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Bakery and Confectionery Upgradation
Aging businesses in baking can now take advantage of PMFME subsidies and upgrade to new facilities. Newer facilities can support the production of high-quality varieties of cookies and chocolates, and breads.
Promotional Activities and Success Stories
Reports have distributed 33 e-newsletters to over 700,000 stakeholders. The 111 documented microentrepreneur success stories workshops and documented events and campaigns showcase the events and campaigns.
Entrepreneurs – Models to Imitate
Micro enterprises can take brand building lessons from Haldiram’s, LT Foods, Marico, and ITC Foods, and other small businesses to exemplify the potential of powerful branding and supply chain. These brands have become the micro enterprises benchmarks.
Entrepreneurs – Actionable Guidance
Using NPCS, start developing a draft project report (DPR) for your district’s ‘One District One Product’ (ODOP) initiative and take advantage of state support in conjunction with a PMFME 35% subsidy.
Early investment in branding and packaging, which is critical, can be done with the help of technical skills obtained at incubation centers. It would also be advisable to develop digital and export skills, since global buyers often prefer sustainable packaging.
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Conclusion – The Future of India’s Micro Food Enterprises(PMFME Scheme)
The PMFME scheme is certainly a disruptive innovation. It has the potential to organize and grow the informal sector in India exponentially. It seeks to formalize 200,000 micro food processing businesses.
These micro enterprises can leverage MoFPI and NPCS support to easily access national and international markets. Micro food enterprises will certainly be the keystone of India’s food processing future.
FAQS-PMFME Scheme
1. What does the PMFME scheme aim to achieve?
A. The scheme attempts formalizing 200,000 micro food processing enterprises, also offering credit linked subsidies and other forms of institutional support.
2. Who are eligible for PMFME benefits?
A. FPOs, SHGs, Entrepreneurs, Cooperatives, and Verified Documented Producer Companies.
3. What is meant by the PMFME subsidy scheme?
A. In this scheme, a person can get PMFME subsidy of 10 lakh, and for common facilities, an additional subsidy of 3 crore is available, subject to a 35% subsidy on the investments.
How do micro-sized enterprises ODOP?
The micro-sized enterprises accomplish better procurement as well as enhanced branding because the focus is on the particular commodities within the district.
4.How do PMFME applicants get help from the NPCS?
A. The NPCS helps PMFME applicants by formulating DPRs, and aids in the collection of financial and marketing data in assisting the applicant in securing a loan and expanding the operations of the business.
