Cabinet approval for Scheme for formalisation of Micro Food Processing Enterprises (FME)

PIB News Update: The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval to a new Centrally Sponsored Scheme – “Scheme for Formalisation of Micro food processing Enterprises (FME)” for the Unorganized Sector on All India basis with an outlay of Rs.10,000 crore.  The expenditure will be shared by GOI and the States in ratio of 60:40.

Details of the Scheme:

Objectives:

• Increase in access to finance by micro food processing units.
• Increase in revenues of target enterprises.
• Enhanced compliance with food quality and safety standards.
• Strengthening capacities of support systems.
• Transition from the unorganized sector to the formal sector.
• Special focus on women entrepreneurs and Aspirational districts.
• Encourage Waste to Wealth activities.
• Focus on minor forest produce in Tribal Districts.

Salient features:

• Centrally Sponsored Scheme. Expenditure to be shared by Government of India and States at 60:40.
• 2,00,000 micro-enterprises are to be assisted with credit linked subsidy.
• Scheme will be implemented over a 5 year period from 2020-21 to 2024-25.
• Cluster approach.
• Focus on perishables.

Support to Individual micro units:

• Micro enterprises will get credit linked subsidy @ 35% of the eligible project cost with ceiling of Rs.10 lakh.
• Beneficiary contribution will be minimum 10% and balance from loan.
• On-site skill training & Handholding for DPR and technical upgradation.

Support to FPOs/SHGs/Cooperatives:

• Seed capital to SHGs for loan to members for working capital and small tools.
• Grant for backward/ forward linkages, common infrastructure, packaging, marketing & branding.
• Skill training & Handholding support.
• Credit linked capital subsidy.

Implementation schedule: