Fostering Inclusive Growth Under Pradhan Mantri Formalisation Of Micro Food Processing Enterprises Scheme: A Conceptual Study

Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-10(II)| October2025 176 Fostering Inclusive Growth Under Pradhan Mantri Formalisation Of Micro Food Processing Enterprises Scheme: A Conceptual Study Balakrishna A1, Dr. Surekha Subhas Patil2, Meghashree D G3 1Research Scholar,Department of Commerce,Adichunchanagiri University,B G Nagara, Nagamangala, Mandya 2Associate Professor, Research Guide, M.Com, PGDFM, PGDMM, PhD, UGC-NET.Department of Commerce,B G S First Grade College,Adichunchanagiri University,B G Nagara, Nagamangala, Mandya 3Assistant Professor,Department of Commerce,SFS College, Kolar, Karnataka Email: nandakishor[email protected] Manuscript ID: JRD -2025-171042 ISSN: 2230-9578 Volume 17 Issue 10(II) Pp. 176-179 October 2025 Submitted: 15 Oct. 2025 Revised: 25 Oct. 2025 Accepted: 27 Oct. 2025 Published: 31 Oct. 2025 Abstract The PM FME scheme is a pivotal one for the development of micro food processing businesses in India, involving much-needed capital assistance and encouraging formalization of individual micro food processing enterprises with a view to increasing their competitiveness. Based on loan sanction data, this research gives an overview of the scheme's efficacy and scope for future expansion. This paper examines secondary data on loans approved under the scheme. Keywords: Scheme, SHGs, Entrepreneurs, Credit linked scheme. Introduction From the era of importing food grains to the era of largest exporter of agricultural products India has seen peaks and valleys, as we know food is the essential component to survive, as this is materialized from agriculture and this agriculture has been widely in practice in India, As per India Brand Equity Foundation 55% of India’s population is dependent on agriculture).Year on Year India exports 15% of agricultural commodities to other countries and has seen 18% contribution in exporting of agricultural products as of 2025 though the country holds the larger position in exporting of agricultural commodities, the country lacked in exporting processed food and concentrated more on domestic markets and resulted in minimizing profits and that ruined the food processing industry.Adaption to the busy work culture the generation now tends to have fast foods than the traditional ones and this has led to unhealthy practices and also decline of micro food processing enterprises, Understanding the significance of food processing industry and its demand in the global market the Prime Minister of India launched a 5 year Scheme “Pradhan Mantri Formalization of Micro Food Processing Enterprises” (PMFME) in 2020, Resulted in sustaining of those traditional food processing industries and rebounded towards healthy food practices. This decade is quite benefiting to the food processing industry as on the other hand the population of the country has gradually increased and this increase in population has made huge demand for the food consumption. About Pradhan Mantri Formalization of Micro Food Processing Enterprises (PMFME) PMFME central sponsored scheme, the expenditure sharing in 60:40 ratio with the central and state, 90:10 ratio between central and North eastern states and Himalayan states, 100% to the Union territories. launched with an objective of promoting micro food processing enterprises through not only credit linked capital subsidies but also provides training in business up gradation like packing, branding, labelling and technical assistance to farmer producer organisations, under ODOP (One District One Product)approach and aims to uplift the selfhelp groups, rural entrepreneurs, individuals, cooperatives, startups and micro food processing Quick Response Code: Website: https://jrdrvb.org/ DOI: Creative Commons (CC BY-NC-SA 4.0) This is an open access journal, and articles are distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Public License, which allows others to remix, tweak, and build upon the work noncommercially, as long as appropriate credit is given and the new creations ae licensed under the idential terms. Address for correspondence: Balakrishna A, Research Scholar,Department of Commerce,Adichunchanagiri University,B G Nagara, Nagamangala, Mandya How to cite this article: Balakrishna A,. Surekha Subhas Patil, Meghashree D G,(2025 ), Fostering Inclusive Growth Under Pradhan Mantri Formalisation Of Micro Food Processing Enterprises Scheme: A Conceptual Study,Journal of Research & Development, 17(10(II)),176-179 Original Article Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-10(II)| October2025 177 enterprises such as pickle, jaggery, dairy products, meat products, and to various diverse food products.The ODOP recognizes the products across the country and certain products have achieved geographical indication and promotes such kind of products under the scheme. The program has outlaid rupees 10,300 crores (2020 - 2025) for 5years to the development of micro food processing enterprises across the states and union territories in India. Post implementation of the scheme the food processing exports has seen 26% increase (as of 2023, from 14% in 2013), as this food processing industry covers agricultural products around 66% of these units are located in rural areas and creates rural entrepreneurs, though PMFME comprise of unorganized sector but it has 25 lakh units which provides 74% of employment opportunities and also increases the worth of the product for Example: 1 kg Mango is sold at rupees 20 to 30 whereas, 1 kg Pickle is sold at 200 to 300 rupees. It means the processed food can be sold at higher cost than selling it as a raw material. Financial aid to Organisations: o Existing individual micro food processing units desirous of upgrading their units can avail credit-linked capital subsidy at 35 percentage of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit. o Support would be provided through credit linked grants at 35% for development of common infrastructure including common processing facility, lab, warehouse and others, Through Farmer Producer Organisations, Self Help Groups, cooperatives or state owned agencies or private enterprises. o A seed capital of Rs. 40,000per Self Help Group member would be provided for working capital and purchase of small tools. Review of Literature Miss Aditi Chopra and Prof. Rajendra Mishra (2023), Role Of Food Processing Industry In Food And Nutritional Security In India: The Study Shows A strong relationship between loan applications, sanctions, and disbursements, but delays and rejections slow progress. Overall, it focuses on formalizing micro enterprises, improving productivity, and fostering sustainable development. Objectives • To create awareness among micro food processing entrepreneurs. • To understand the concept of PMFME in inclusive growth. Research methodology The study is conducted through the secondary source of data from PMFME website and its magazines. A descriptive study is carried having the data of loans granted for Entrepreneurs from 2021 -2025, and analyzed based on the published data from the PIB website. Data analysis and Interpretation Total number of loans granted year wise through PMFME (as on 30 June 2025) Year Number of loans sanctioned 2020 – 2021 0 2021 – 2022 3218 2022 – 2023 28492 2023 – 2024 54594 2024 – 2025 50875 2025 – 2026 7338 Total 144517 Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-10(II)| October2025 178 The data shows that the number of loans sanctioned under the PMFME scheme started with zero loans in FY 2020–21 and slowly set in from FY 2021–22 with 3,218 loans. From FY 2021–22 to FY 2022–23, there was a huge increase of approximately 785.3%, reflecting a speedy uptake of the scheme. This increase persisted from FY 2022–23 to FY 2023–24 with a further hike of 91.6%, being the highest year of sanction of loans at 54,594. But from FY 2023– 24 to FY 2024–25, there was a deceleration of 6.8%, reflecting some settling down after the phase of high growth.. By the end of first quarter 30th June 2025, 7338 loans were sanctioned under PMFME scheme, this data shows that the scheme has benefitted the farmers, Cooperatives, SHG’s, Individuals and various food processing industries. Total amount released by Central government under PMFME scheme. Year Amount released by central government (Rs. in crores) 2020 – 2021 367.6 2021 – 2022 297.44 2022 – 2023 268.52 2023 – 2024 765.3 2024 – 2025 1142.6 2025 – 2026 949.63 Total 3791.1 The figures show a fluctuating pattern in the disbursement of the Centre Share between FY 2020-21 and FY 2025-26. Firstly, the figure dropped from Rs. 367.6 crore in FY 2020-21 to Rs. 297.44 crore during FY 2021-22, indicating a fall of around 19.1%. It again dropped to Rs. 268.52 crore during FY 2022-23, indicating another 9.7% fall 2020 – 2021 2021 – 2022 2022 – 2023 2023 – 2024 2024 – 2025 2025 – 2026 03218 28492 54594 50875 7338 NUMBER OF LOANS SANCTIONED 0 200 400 600 800 1000 1200 2020 – 2021 2021 – 2022 2022 – 2023 2023 – 2024 2024 – 2025 2025 – 2026 Amount released by central government (Rs. in crores) Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-10(II)| October2025 179 from the last year. Nevertheless, from FY 2022-23 to FY 2023-24, there has been a huge increase to Rs. 765.3 crore, which is an increase of approximately 185%. This trend was followed in FY 2024-25 as well, where the figure sharply increased to Rs. 1142.6 crore, which is an increase of almost 49.3% over FY 2023-24. In FY 2025-26, the figure dropped slightly to Rs. 949.63 crore, representing a fall of approximately 16.9% from the earlier year. Overall, the pattern depicts early declines, after which there has been considerable expansion. Conclusion The PMFME scheme has been a key contributor to revitalizing and institutionalizing micro food processing units, providing economic development and job creation in rural India. During its tenure, it has greatly accelerated loan release and investments, with export of processed foods registering a considerable increase. The plan was able to induce conventional food processing units to switch to modern practices, establishing a viable market for varied products through the ODOP approach. While trends of varying financial disbursements were noted, the general trend remained one of wide growth and support. Not only did it improve the value addition of agriculture produce but also bolster rural entrepreneurship. By filling gaps in infrastructure, skill development, and access to credit, PMFME has emerged as a cornerstone of India's food processing revolution. With sustained attention, it holds the promise of longterm gains for domestic consumption and international trade. References 1. Miss Aditi Chopra and Prof. Rajendra Mishra (2023). Role Of Food Processing Industry In Food And Nutritional Security In India, International Journal Of Research In Commerce And Management Studies (Ijrcms) 5 (3): 11-37 2. https://www.ibef.org/industry/agriculture-india 3. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2150881#:~:text=Posted%20On:%2031%20JUL%202025,J une%202025%2C%20are%20as%20follows 4. https://www.drishtiias.com/daily-news-analysis/pmfme-scheme-1 5. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2102851