India’s food processing industry is a powerhouse, brimming with potential. However, a significant portion of this sector operates in the unorganised segment, where small and medium-scale entrepreneurs struggle with limited resources and a lack of formalisation.
The food processing industry is an integral cog in the Indian economy, generating employment and contributing significantly to the GDP. If you’ve ever dreamt of turning your passion for food into a thriving business, the PM FME scheme, also known as the Pradhan Mantri Formalisation of Micro Food Processing Enterprises scheme, could be a game-changer.
Ventured by the Ministry of Food Processing Industries (MoFPI) under the ambit of the Aatmanirbhar Bharat Abhiyan, this government scheme for business aims to empower micro-entrepreneurs in the food processing sector. Continue reading to learn about more details.
What is the PM FME Scheme?
The PM FME scheme is a government initiative for SME businesses in the food industry. It is specifically designed to empower and support micro-food processing units. Here are a few aims of this project to achieve a dual objective:
- Enhance the competitiveness of existing individual enterprises in the unorganised food processing sector.
- Promote formalisation of the sector, bringing these businesses into the mainstream.
With a total outlay of ₹10,000 crore spread over five years (2020-21 to 2024-25), this government scheme for business offers a ray of hope for food processing entrepreneurs across the country.
How Does the PM FME Scheme Empower You?
The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PM FME) scheme extends a helping hand to food processing entrepreneurs in several ways. Here’s a breakdown of the key benefits you can reap:
Financial Assistance:
- Credit-linked Capital Subsidy
One of the biggest hurdles for small businesses is access to capital. The PM FME scheme addresses this by providing a credit-linked capital subsidy of 35% of the eligible project cost. Here, the maximum ceiling would be of Rs. 10 lakh per unit for individual micro-enterprises. This subsidy makes critical equipment and infrastructure upgrades more affordable, propelling your business growth.
- Seed Capital for Self-Help Groups (SHGs)
This scheme for businesses recognises the power of collective action. SHGs working in the food processing sector can avail seed capital of Rs. 40,000/- per member. This financial boost can be used for working capital and purchasing essential tools, empowering SHGs to strengthen their operations.
- Support for groups
The PM FME scheme understands the advantages of collaboration. Groups like Farmer Producer Organisations (FPOs), SHGs, and producer cooperatives can access a credit-linked subsidy of 35%. This can be used for either capital investment or along the value chain to facilitate investments in shared infrastructure and equipment. Consequently, it will promote collective growth within the food processing sector.
A Look Beyond the Financials of The PM FME’s Offerings
Financial backing is one of the most crucial aspects whether it is food business or any other, but the PM FME scheme goes beyond that. It provides much-needed support in other critical areas, such as:
- Branding and Marketing Support
Building a strong brand and reaching out to consumers can be challenging for small businesses. This government scheme for businesses offers a 50% financial grant for branding and marketing activities. It helps you create a unique product identity and connect with a wider audience.
- Handholding Support
The scheme acknowledges the importance of guidance and assistance. It offers handholding support to SHGs, FPOs, and producer cooperatives. Further, it helps them understand the application process, project implementation, and other crucial aspects of running their food processing businesses.
- Support for Common Infrastructure
Investing in infrastructure like cold storage facilities or warehouses can be cost-prohibitive for individual units. The PM FME scheme addresses this by providing financial assistance for establishing common infrastructure projects undertaken by groups like FPOs, SHGs, and producer cooperatives. This shared infrastructure reduces operational costs and improves efficiency for all participating units.
Who Can Apply for the PM FME Scheme?
Schemes like the PM FME have their doors open to a range of individuals and groups striving to make their mark in the food processing sector. Here’s a closer look at who can benefit from this government business scheme:
- Individual Micro-Entrepreneurs: Are you a passionate individual running a small-scale food processing unit but haven’t formalised it yet? The PM FME scheme can be your stepping stone to success! Whether you specialise in pickles, chutneys, jams, or any other food product, the scheme empowers you to upgrade your operations and gain a competitive edge.
- Self-Help Groups (SHGs): This scheme acknowledges the power of collective action. If you’re a member of an SHG involved in food processing activities, the scheme can be a game-changer. You can leverage the seed capital for the members individually. This shall strengthen your group’s operations, invest in necessary equipment, and boost your collective income.
- Farmer Producer Organisations (FPOs): FPOs play a crucial role in empowering farmers. The PM FME scheme recognises this contribution and extends its support to FPOs engaged in food processing activities. FPOs can avail of a credit-linked grant to invest in shared infrastructure and equipment along the value chain. This carves collaboration among farmers, improves processing efficiency, and ultimately benefits everyone involved.
- Producer Cooperatives: Similar to FPOs, producer cooperatives operating in the food processing sector can also benefit from such a government scheme for businesses. The credit-linked grant allows these cooperatives to invest in shared resources, which leads to improved processing capabilities and increased profitability.
Investing in Your Food Processing Dreams
The PM FME scheme opens doors for a variety of stakeholders in the micro-food processing sector. Individual entrepreneurs and groups like SHGs, FPOs, and cooperatives can all benefit from the development opportunities offered by this initiative. You can avail of these schemes online but for reaping their financial benefits, a trusted banking partner like HDFC Bank is necessary.
They can offer tailored term or working capital loans with flexible terms and favourable interest rates. Reach out to their relationship managers by visiting HDFC Bank’s official website today!
