Cabinet approves Scheme for Formalization of Micro Food Processing Enterprises

News:Union Cabinet has given its approval to Scheme for Formalization of Micro Food Processing Enterprises for the unorganised sector on all India basis with an outlay of Rs.10,000 crore.


Salient features

  • Type: Centrally Sponsored Scheme with expenditure to be shared by Government of India and states at 60:40.
  • Duration: It will be implemented over a 5 year period from 2020-21 to 2024-25.
  • Under the scheme:
    • 2,00,000 micro-enterprises will get credit linked subsidy at 35% of the eligible project cost with ceiling of Rs. 10 lakh.
    • Beneficiary contribution will be minimum 10% and balance from loan. 
    • Seed capital will be given to SHGs (Rs. four lakh per SHG) for loan to members for working capital and small tools.
    • Grant will also be provided to farmer producer organisations (FPO) for backward and forward linkages, common infrastructure, packaging, marketing and branding.
    • Cluster approach will be there with focus on perishables.
  • Administration and Implementation mechanisms:
    • The Scheme would be monitored at Centre by an Inter-Ministerial Empowered Committee(IMEC) under the Chairmanship of Minister for Food Processing Industries.
    • State/ UT nodal agency(SNA) would be responsible for the implementation of the scheme.
    • A State Level Committee(SLC) chaired by the Chief Secretary will monitor and sanction proposals for expansion of micro units and setting up of new units by the SHGs/ FPOs/ Cooperatives.
    • A third-party evaluation and mid-term review mechanism would be built in the programme.
    • National level portal would also be set-up wherein the applicants/ individual enterprise could apply to participate in the Scheme. All the scheme activities would be undertaken on the National portal.