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Central government schemes

PMFME Scheme: Subsidy for Micro Food Processing Units

35% capital subsidy and seed money for small food processing units

35% subsidyUp to 10 lakhBank loan linkedChecked 14 Nov

Small spice grinding unit with steel machines, the kind of micro unit the PMFME scheme funds

Independent guide. Money Schemes is not a government website and does not take applications or payments. Apply only on the official portal, at a post office, a bank branch or a Common Service Centre.

The PMFME scheme (Pradhan Mantri Formalisation of Micro Food Processing Enterprises) pays a credit-linked capital subsidy of 35% of the project cost, capped at 10 lakh rupees for each unit, to small food processing businesses that take a bank loan to set up or upgrade, and gives 40,000 rupees of seed capital to each self-help group member in food processing. The Ministry of Food Processing Industries runs it jointly with state governments, which share the cost.

The approved period of the scheme was extended to the end of September, and the ministry sought a further five-year run with revised rules. Before preparing a project, check on the official PMFME portal whether new applications are being accepted in your state.

At a glance

  • Run by

    Ministry of Food Processing Industries, with State Nodal Agencies

  • Individual units

    35% of eligible project cost, maximum 10 lakh

  • Own share

    At least 10% of project cost; the rest by bank loan

  • SHG seed capital

    40,000 rupees per member, for working capital and small tools

  • Groups

    35% grant for FPOs, SHGs and producer cooperatives

  • Apply on

    pmfme.mofpi.gov.in

PMFME scheme subsidy for a single unit

A proprietor, partnership or small company running a micro food unit can claim 35% of the eligible project cost as a subsidy, capped at 10 lakh rupees. The owner puts in at least 10% from their own pocket, and a bank lends the rest. The subsidy is released to the bank against the loan, so it is "credit-linked": no loan, no subsidy.

A spice grinding unit plans new machines and a small shed costing 20 lakh. The owner brings 2 lakh, the bank lends 18 lakh, and once the loan is disbursed the subsidy of 7 lakh (35% of 20 lakh) is credited towards the loan. If the project cost were 40 lakh, the subsidy would stop at the 10 lakh ceiling.

Support for groups, SHGs and FPOs

  • Seed capital: 40,000 rupees per SHG member working in food processing, for working capital and small tools. It is routed through the SHG federation and given to members as a loan they repay to the group. A federation can get up to 4 lakh.
  • Group units: FPOs, SHGs and producer cooperatives get a 35% credit-linked grant for shared processing units, with training.
  • Common infrastructure: sorting, grading, cold storage, common processing for the district product, and incubation centres smaller units can hire.
  • Branding and marketing: help for groups to build a common brand, packaging and quality control, with up to 5 lakh from the State Nodal Agency to prepare the project report.

Women in SHGs can also read about the Lakhpati Didi goal, which counts this kind of income.

The district product list

The scheme follows One District One Product (ODOP). Each state picks a product for each district, usually something perishable or traditional: a fruit, a spice, millet, fish, honey or turmeric. That ODOP list decides a lot. The official note says capital support is given first to ODOP units, and new units are supported only for the ODOP product, while existing units can upgrade for other products too.

Ask the District Resource Person or the district industries office for the product chosen for your district. Many people searching for a PMFME scheme list are looking for this ODOP list.

Who can apply as an individual

Under the scheme guidelines, the applicant should be at least 18, own the enterprise, and only one person from a family can take the benefit. Existing unorganised units that want to formalise and upgrade can apply, as can new units in the district product. The unit must be a micro food processing enterprise. You also need the usual bank papers: Aadhaar, PAN, bank statements, a quotation for machines, and proof of the site.

The education and other conditions have been changed during the scheme's life, so confirm the current list with the District Resource Person before you pay for a project report.

How the application moves

  1. Register on the PMFME portal as an individual applicant.
  2. Get help from the District Resource Person (DRP) appointed by the state. The DRP helps prepare the project report and the bank application at no fee to you.
  3. Fill the online form with the unit details, cost of machines and buildings, and your share.
  4. The district and state agencies review it and send it to a bank of your choice.
  5. The bank appraises and sanctions the loan, then disburses.
  6. The subsidy is released to the bank and kept against the loan as per the rules.

Training and help with licences

Formalisation is the point of the scheme. Units are helped to get FSSAI food safety registration, Udyam registration and GST where needed. National institutes for food technology run training for owners and workers, with state technical institutes. A unit that sells packaged food without a food safety licence cannot grow far; this support helps fix that.

Other loans for small businesses are on the Udyami Yojana page, and traditional artisans should see PM Vishwakarma.

Snags that hold up an application

SnagWhyWhat helps
Bank not sanctioningWeak project report or credit historyAsk the DRP to revise figures; try another participating bank
Subsidy not creditedLoan not fully disbursed or papers missingLook up progress on the portal; also ask the branch
Product not eligibleNew unit outside the district productConfirm the ODOP product before planning
Agent asking feesNot part of the schemeUse the DRP, whose help is free

Frequently asked questions

What is the maximum PMFME scheme subsidy?

35% of the eligible project cost, with a ceiling of 10 lakh rupees for an individual micro unit.

Do I need a bank loan to get the subsidy?

Yes. The subsidy is credit-linked. You put in at least 10% and a bank must fund the rest.

Is the pmfme scheme still open?

The scheme was extended until the end of September, and a five-year continuation was proposed. Look at the PMFME portal, or ask the State Nodal Agency, to see if new applications are being taken.

Can a home-based pickle maker apply?

Yes, if the unit is a micro food processing enterprise and meets the rules. Under the ODOP rule, a brand new unit may need to make the district product.

Who is the District Resource Person?

A person appointed by the state agency to help applicants prepare the project report and loan papers. Their help is free.

Is the SHG seed capital a free grant?

Not for the member. The money goes to the SHG federation, which lends it to members for working capital and small tools. Members repay it to the group, so the fund keeps circulating.

Official sources

Rules, amounts and portals can change. Check the official source before you apply or deposit.