The game changer features of PMFME scheme
The scheme can do more than creating units. It can turn J&K orchards, fields and kitchens into the first link of a modern food value chain.
Anuj Kumar Verma
The PMFME (Pradhan Mantri Formalisation of Micro Food Processing Enterprises) was launched in June 2020 with an original ₹10,000 crore programme outlay and was designed to help small food processing businesses, farmers, self help groups, unemployed youths to formalise and invest in machinery, increase technical capability, common infrastructure, branding, training, and access to markets.
The scheme currently provides a 35% credit-linked capital subsidy for eligible individual micro food-processing enterprises, subject to the ₹10 lakh ceiling. Support is also available for farmer producer organisations, self-help groups, cooperatives, and common infrastructure, allowing the programme to cover both individual businesses and clusters of smaller processors.
In India, the farmers, often, have a surplus of crop which may not fetch a good price due to a market glut or other reasons. The only option left is to process the produce to increase its shelf life and add value also. But, a substantial portion of such processing takes place in the form of small initiatives with traditional methods, without use of any machinary with full scope for improving output, hygiene, packaging, shelf life, and product consistency through comparatively modest capital investment. A grinder, dryer, mixer, an oven, small filling line, sealing machine, cold room, test instrument, or improved cleaning system didn’t fit in the budget of a farmer, a self help group micro food processor in an unformal sector. The PMFME scheme was launched with an objective to extend full support to such micro food processors working in an unformal sector to formalise them by providing them capital support, training, complete handholding right from uploading of the application on the portal upto sanctioning of loan by financial institutions, procurring certificates like FSSSAI, Udyami, packaging, branding and marketing of the final products.
The central idea of the scheme is simple: a farmer should not remain only a seller of raw fruit, milk, walnut, saffron or spice, but should become an agripreneur who captures a larger share of the final consumer price.
The scheme offers a fixed credit-linked subsidy of 35 percent of the project cost, up to Rs 10 lakh, for setting up or upgrading a micro food processing unit. It also provides Rs 40,000 seed capital to self-help group members, training, incubation, common infrastructure, branding and marketing support. For unemployed youth, women and small growers, this converts a kitchen-scale idea into a registered, bankable enterprise.
PMFME’s sharpest advantage over the Prime Minister’s Employment Generation Programme lies in its clarity and specialisation. PMEGP covers many manufacturing and service activities, with subsidy varying from 15 to 35 percent depending on caste category, rural or urban location and gender. PMFME, by contrast, is exclusively for food processing and provides a uniform 35 percent subsidy to eligible individual beneficiaries. This makes the benefit predictable and removes uncertainty for a first-time food entrepreneur.
Equally important is PMFME’s end-to-end handholding. District Nodal Officers and District Resource Persons assist applicants from uploading the application on the portal to preparing the project report, completing documentation, obtaining bank sanctions and later improving packaging, branding and marketing. The beneficiary does not pay for this technical guidance. For rural women, orchardists and first-generation entrepreneurs, this support can matter as much as the subsidy itself.
In our Union Territory, the Jammu and Kashmir Bank has taken a formidable lead in sanctioning and financing PMFME units. As per available information, about 80 percent of loan cases sanctioned under the scheme in J&K are reported to have been financed by J&K Bank, a contribution that deserves appreciation. The Bank’s dominant role has made PMFME more accessible to entrepreneurs in both the Kashmir Valley and the Jammu region, particularly first-time borrowers who need confidence and timely credit.
In the Union Territory, the scheme initially followed a One District One Product approach—apple in Shopian and Baramulla, walnuts in Kishtwar and Kupwara, saffron in Pulwama, bakery in Srinagar, trout in Anantnag and Ganderbal, milk in Pulwama and Rajouri, spices and pickles in Kathua, Kulgam and Reasi, honey in Ramban, and mushrooms in Samba. Later, it was opened to all agriculture and food products in every district. This flexibility allowed entrepreneurs to choose from a far wider range of products based on local raw material, skill and market demand, leading to more diverse units across the Union Territory.
The results are visible in real businesses. Reva Rajput of Tikri in Udhampur built a home based PMFME supported unit producing Barley Energy Booster, amla products, anardana chutney, Kashmiri masala tikki and turmeric powder, tea masala, becoming an inspiration for local women. She adopted the proper packaging, branding and marketing techniques. Today, her products are not popular in the local market but she also send her products to metros & cities like Delhi, Mumbai, Kolkata, Amritsar, Chandigarh. This scheme has totally changed her fortune. Her husband Kuldeep Singh also helps her in running the PMFMFE unit. Today, she is also Director of Devi Pindi FPO Ltd in Udhampur district. Rohit Salaria, a MBA graduate from Udhampur, turned a family grocery business into Salaria Foods, producing pickles, masala tikki, garlic powder, red chilli powder, Tea Masala and other branded spices, with last year’s turnover crossing 85 lacs figure. Her wife Abhilasha and his brother have also joined this unit established under the PMFME scheme. His spices with Vimal brand and pickles under Swadlay brand are quite popular in the local market. Likewise, a farmer Keval Kumar of Dhanu village in Udhampur district used the PMFME scheme to modernise chemical-free jaggery production, improving efficiency and expanding sales.
In another inspiring case, Zubair Ahmed Drabu from Banihal has established Drabu Spices Banihal (DBS), a growing spice processing and marketing unit based in Dooliga Banihal, district Ramban. His journey, formalised under the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme, reflects the transformative impact of targeted government support on young local entrepreneurs. With professional training, financial assistance, and continuous handholding, Zubair transitioned from a home-based setup to a formal production unit. He was sanctioned a loan of Rs 8.70 lakh through J&K Bank, carrying a 35 per cent back-ended subsidy. Today, DBS Spices boasts a monthly output of 60–70 quintals and provides employment to five local youths. PMFME scheme, banking support helped Kupwara entrepreneur Sohail Ahmad War to expand restaurant cum hotel business and generate jobs for 14 unemployed youths.
On July 11th, 2026, the Union Minister for Food Processing Industries, Shri Chirag Paswan, presided over a special event in New Delhi to celebrate achieving a historic milestone under the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme — the sanction of loans to more than two lakh micro food processing enterprises. While crossing 2 Lakh loan sanctions, the scheme has leveraged project investments of over Rs. 20,300 crores. Nearly 90 percent of beneficiaries are first-generation entrepreneurs and 44 percent are women entrepreneurs, while over 75,000 PMFME supported enterprises have entered the formal economy through registrations such as Udyam Aadhaar, Udyam Assist, FSSAI and GST. The Scheme has generated nearly 11 lakh direct and indirect employment opportunities.
Jammu and Kashmir recorded 2,287 loans sanctioned to micro food processing enterprises under the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme during 2023-24 to 2025-26, while the Centre allocated or released Rs 34.71 crore as its share during the period, according to data placed by the Union Ministry of Food Processing Industries in the Lok Sabha. As per official sources, cumulatively, total 2,993 loans had been sanctioned in Jammu and Kashmir with creation of more than 15,000 jobs, since the start of the scheme in year 2020-21. A total of 1,694 self-help group (SHG) members in the Union Territory had also received seed capital assistance amounting to Rs 6.18 crore.
The scheme, originally approved for 2020-21 to 2024-25, has been recently extended up to March 31, 2027.
India’s Ministry of Food Processing Industries has proposed extending the country’s PM Formalisation of Micro Food Processing Enterprises scheme for another five years after the programme reached its original target of 200,000 sanctioned businesses. The proposal would continue PMFME through the 2026–31 period aligned with India’s 16th Finance Commission cycle. The current programme is operating under a temporary extension until March 2027, so the proposed five-year continuation has not yet been approved and could still emerge with revised eligibility, subsidy, and implementation rules. Changes under consideration include an increase in the credit-linked capital subsidy ceiling, currently capped at ₹10 lakh for an individual micro-enterprise. The ministry is also examining additional priority for women entrepreneurs and businesses in hilly regions, where access to finance, infrastructure, and organised distribution can constrain investment in formal processing operations.These changes are especially significant for Jammu and Kashmir, where higher operating costs, difficult terrain and limited market access make stronger support essential.
If J&K sustains awareness, bank coordination and market linkage, PMFME can do more than create units. It can turn the region’s orchards, fields and kitchens into the first link of a modern food value chain.
(STRAIGHT TALK COMMUNICATIONS EXCLUSIVE. The author is an Environmental Advocate and Policy Writer. He served as a District Officer in the Department of Horticulture Planning and Marketing for thirty years. He was the District Nodal Officer, under the PMFME scheme, for Udhampur district. He can be reached at email: verma.anujjk@gmail.com)
(Disclaimer: The views are of the author and not of the Straight Talk Communications)
