PMFME Scheme: A Key Government Scheme for Micro Food Processing Businesses

You may have a great idea for a food business, but turning that idea into reality takes more than just passion.

That’s where government schemes for business can be a real support system. The PMFME Scheme, introduced by the Ministry of Food Processing Industries, aims to support and strengthen micro food processing enterprises throughout India.

It provides financial help, training, and technical support to individuals and small enterprises. Whether you’re starting or looking to grow, this scheme could be the boost you need. It encourages entrepreneurship, promotes traditional foods, and helps create better livelihoods.

Curious to know how this government scheme for businesses works and how you can benefit from it? Let’s get into the details.

What Is the PMFME Scheme?

The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme is a flagship initiative under the Aatmanirbhar Bharat Abhiyan. Launched in 2020, it aims to strengthen the capabilities of micro food processing units across the country.

With a budget of ₹10,000 crore, the scheme is set to run from 2020-21 to 2024-25 and targets 200,000 micro-enterprises. Its core focus is on formalising unorganised businesses, modernising technology, and generating employment opportunities.

• Scope: Open to individuals, SHGs, FPOs, and co-operatives
• Impact: Enhances regional economies and promotes local food products

This government scheme for business provides small-scale entrepreneurs with the means to scale up and compete more effectively in broader markets.

Key Features of the PMFME Scheme

This scheme offers a range of benefits designed to empower micro food businesses. Here’s a breakdown of its core components.

1. One District One Product (ODOP) Approach

A standout feature of the PMFME scheme is the One District One Product (ODOP) strategy. This approach focuses on promoting one key food product per district. For instance, it might support mango-based units in Gujarat or millet products in Rajasthan.

• Benefit: Builds a strong identity for district-specific products
• Example: Boosts regional items such as honey from Himachal Pradesh or spices from Kerala

This targeted support improves sourcing, streamlines supply chains, and strengthens marketing efforts.

1. Financial Assistance for Growth

The PMFME scheme offers extensive financial backing to help businesses expand and upgrade their facilities.

• Subsidy: Provides a 35% credit-linked capital subsidy for upgrading equipment or setting up new units
• Seed Capital: Self-help groups (SHGs) can access up to ₹40,000 per member (up to ₹4 lakh per group) for working capital and tools
• Loan Support: Encourages banks to extend credit with government guarantees

These financial tools make it easier for micro businesses to invest in better infrastructure and processes.

1. Training and Skill Development

Skill enhancement is a core pillar of this government scheme for business. Entrepreneurs are trained to improve their operational and managerial capabilities.

• Focus Areas: Includes hygiene, food safety, processing techniques, and enterprise management
• Delivery: Hands-on training and technical workshops
• Outcome: Ensures micro units operate more efficiently and meet quality standards

Training ensures businesses not only survive but thrive in competitive markets.

1. Branding and Marketing Support

Brand visibility is vital for any business. This scheme helps micro food units improve their packaging, labelling, and marketing reach.

• Funding: Covers up to 50% of marketing and branding expenses
• Support: Includes promotional campaigns and market access initiatives
• Goal: Enables micro-enterprises to compete with established brands

This element of the scheme allows businesses to tell their story and connect with customers across India and beyond.

Who Can Apply for the PMFME Scheme?

This government scheme for business is designed to be inclusive and flexible, welcoming a range of applicants from individuals to organised groups.

• Eligibility for Individuals

If you’re an individual running or planning to start a micro food processing unit, you may qualify for assistance under this scheme.

1. Requirements: Minimum age of 18 and at least 8th standard education
2. Contribution: Applicant must contribute 10% of the total project cost
3. Family Rule: Only one applicant per household
4. Priority: Preference given to existing businesses verified by a resource person

• Eligibility for Groups and Organisations

Group-based enterprises can also benefit from this government scheme for businesses.

1. Eligible Groups: SHGs, FPOs, and co-operatives working in food processing
2. Criteria: Minimum of three years’ operational history and annual turnover of at least ₹1 crore
3. Contribution: 10% of project cost and 20% of required working capital
4. Priority: Special focus on units aligned with ODOP

These criteria help ensure that both new and existing businesses have a fair chance to benefit.

Benefits of the PMFME Scheme

The scheme offers far-reaching benefits, both for business owners and the communities they serve.

1. Job Creation: Generates employment in rural and semi-urban areas
2. Economic Upliftment: Stimulates local economies by promoting regional produce
3. Market Expansion: Helps micro-units reach broader national and global markets
4. Eco-Friendly Practices: Encourages the adoption of sustainable and modern techniques
5. Empowerment: Especially supports women-led SHGs and underrepresented groups

These benefits show why this government scheme for business is more than just financial aid; it’s a tool for transformation.

Why the PMFME Scheme Matters

The PMFME scheme is a powerful government scheme for businesses that goes beyond funding. It champions India’s rich food heritage, supports small businesses, and fosters inclusive growth.

From ODOP to branding and training, each feature is designed to help micro food businesses succeed. Whether you’re an individual entrepreneur or part of a larger group, this scheme opens up new possibilities and pathways for long-term success.

Making the Most of Government Schemes for Business

The PMFME scheme stands out as a well-rounded government scheme for business, offering much-needed support to micro food enterprises across India. From funding and training to branding and market access, it provides a structured pathway for small entrepreneurs to thrive.

By encouraging local production and helping formalise the unorganised sector, the scheme is paving the way for inclusive economic growth. Whether you’re just starting or looking to scale your food business, the scheme could be the opportunity you’ve been waiting for.

For those seeking guidance or financial support to make the most of such government schemes for business, institutions like HDFC Bank offer valuable resources to help bring your vision to life.