Central Government Scheme, PM FME

PM Formalization of Micro Food Processing Enterprises Scheme

PM Formalization of Micro Food Processing Enterprises Scheme (PM FME) is a centrally sponsored scheme that is designed to address the challenges faced by the micro enterprises and to tap the potential of groups and cooperatives in supporting the upgradation and formalization of these enterprises.

The scheme envisages an outlay of Rs. 10,000 crores over a period of 5 years from 2020-21 to 2024-25.

Under the scheme, 2,00,000 micro food processing units will be directly assisted with credit linked subsidy.

Aims of the Scheme:

  1. Enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector.
  2. Support Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), and producer cooperatives along with their entire value chain.

Programme Components:

  1. Support to individual and group of micro enterprises.
  2. Branding & Marketing Support.
  3. Support for strengthening of institutions.
  4. Setting up robust project management framework.

In this article, we are just focusing on one part of the scheme which is “Support to Individual Micro Enterprises”.

Support to Individual Micro Enterprises:


Individual micro food processing units would be provided credit linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs. 10 Lacs per unit. Beneficiary contribution should be minimum of 10% of the project cost with balance being loan from bank.

Dummy Project Cost & Benefit Analysis:

ItemProject 1Project 2
Land Cost (Not Eligible)0.000.00
Cost of Rental Workshed (Maximum for 3 years)1,50,0003,00,000
Cost of Machinery10,00,00025,00,000
Cost of Furniture, Other tools & Equipments2,00,0005,00,000
Total Project Cost13,50,00033,00,000
Subsidy Amount (35% of Project Cost or Rs. 10 Lacs Max)*4,72,50010,00,000*


  1. Existing or new micro food processing units.
  2. The enterprise should be unincorporated and should employ less than 10 workers.
  3. The applicant should have ownership right of the enterprise.
  4. Ownership status: Proprietary/ Partnership Firm.
  5. Applicant should be above 18 years of age and should possess at least VIII standard pass educational certificate.
  6. Only per person from one family would be eligible. Family means: Self, spouse & children.
  7. Willingness to formalize and contribute 10% of project cost and obtain Bank Loan.

Selection Procedure:

Selection Procedure to claim benefit under this policy is explained through a chart.