The Union Cabinet chaired by Prime Minister Modi on Wednesday gave its approval to the formalization of micro food processing enterprises through a centrally sponsored scheme for the same. The scheme titled “Scheme for Formalisation of Micro food processing Enterprises (FME)” with an outlay of ₹10,000 crores will help micro food processing units that are mostly under the unorganized sector to come under the formal ambit. The expenses under the scheme would be shared in the ratio of 60:40 between Government of India and State governments.
Here are some of the salient features of the scheme:
- Credit linked subsidy and hand-holding support would be given to 2 lakh micro enterprises.
- Micro enterprises would get credit linked subsidy at 35% of the eligibleproject cost with ₹10 lakh as ceiling.
- Beneficiary would be required to contribute minimum 10% and the balance would be given as loan.
- For SHGs, FPOs and cooperatives apart from the credit linked capital subsidy, seed capital worth ₹4 lakhs would be given for working capital and small tools along with grants for forward and backward linkages, common infrastructure, packaging, marketing and branding
- The scheme will be rolled out on All-India basis and will be implemented over a 5 year period from 2020-21 to 2024-25
- Scheme would focus on existing micro food processing entrepreneurs, women entrepreneurs and entrepreneurs from aspirational districts
- It is likely to generate 9 lakh skilled and semi-skilled jobs.
In India, there are about 25 lakh unregistered food processing enterprises constituting 98% of the sector and are mostly in the informal sector. Around 66% of these units are located in rural areas and 80% of them are family based enterprises. Aiding this sector will lead to creation of off-farm opportunities, reduce wastage of perishables and would help in achieving the goal of doubling farmer’s income by 2022.