Gram Samridhi Yojana & PMFME: Micro Food Processing Subsidy and Benefits
The 2019 Gram Samridhi Yojana proposal focused on employment generation, rural food-processing enterprises, common facilities, incubation and technical support. The present Central implementation framework for these objectives is the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme.
Updated: 5 September 2026
Background: Gram Samridhi Yojana Proposal
In 2019, the Central Government discussed a proposed Gram Samridhi Yojana for the micro food-processing sector. The proposal focused on rural employment, small food-processing enterprises, improved technology, common facility centres, incubation and support for farmers and entrepreneurs.
The original proposal contemplated support for tens of thousands of micro food-processing units and placed special emphasis on rural areas, farmer families and unorganised food-processing enterprises.
Several themes from that proposal-formalisation, credit support, incubation, common infrastructure, capacity building and market linkages-are now reflected in the PMFME Scheme implemented by the Ministry of Food Processing Industries.
What is PMFME?
PM Formalisation of Micro Food Processing Enterprises (PMFME) is a Centrally Sponsored Scheme implemented by the Ministry of Food Processing Industries in partnership with State and Union Territory Governments.
Its objectives include:
- formalising micro food-processing enterprises;
- improving competitiveness and productivity;
- supporting new and existing micro food-processing units;
- improving access to finance;
- providing technical and business support;
- supporting FPOs, SHGs and cooperatives;
- creating common infrastructure and incubation facilities;
- improving branding and marketing; and
- strengthening food-safety and regulatory compliance.
Subsidy for Individual Micro Food Processing Enterprises
Under the current PMFME framework, eligible individual or other permitted micro food-processing enterprises may receive a credit-linked capital subsidy of 35% of the eligible project cost, subject to a maximum subsidy of ₹10 lakh per unit.
| Feature | PMFME Support |
|---|---|
| Credit-linked capital subsidy | 35% of eligible project cost |
| Maximum subsidy | ₹10 lakh per unit |
| Minimum beneficiary contribution | 10% of project cost |
| Balance funding | Bank loan, subject to lender approval |
The eligible project cost generally includes plant and machinery and eligible technical civil work, subject to the scheme guidelines. Land cost and specified non-eligible expenditure are excluded.
Support for SHGs, FPOs and Cooperatives
PMFME provides dedicated support to groups engaged in agri-food processing, including Self Help Groups, Farmer Producer Organisations, Farmer Producer Companies and cooperatives.
Seed Capital for SHGs
Eligible SHG members engaged in food processing may receive seed-capital support of up to ₹40,000 per member for working capital and purchase of small tools, subject to scheme conditions.
Credit-Linked Support for Groups
FPOs, SHGs, cooperatives and other eligible group entities can receive credit-linked grant support for eligible capital investment in food-processing activities.
Common Infrastructure and Incubation Centres
One of the important ideas in the earlier Gram Samridhi proposal was creation of common facility centres and business incubators in rural areas. PMFME now provides a formal framework for such support.
Eligible FPOs, FPCs, cooperatives, SHGs, federations and Government agencies may receive 35% credit-linked capital subsidy for eligible common infrastructure, subject to a maximum grant of ₹3 crore.
Common infrastructure may support activities such as processing, testing, grading, storage, packaging, value-chain development and incubation, depending on the approved project.
One District One Product (ODOP) Approach
PMFME follows a One District One Product approach to improve scale and efficiency in procurement, processing, common services, branding and marketing.
Districts identify food products with local production strength or processing potential. Enterprises working with the identified ODOP product may receive preference, while current guidelines also permit support to other eligible micro food-processing enterprises subject to prescribed conditions.
Eligibility and Formalisation Requirements
PMFME is designed for eligible micro food-processing enterprises, including individual entrepreneurs and eligible group entities. Current guidelines permit support for upgradation of existing enterprises and, in specified cases, setting up of new micro food-processing enterprises.
Beneficiaries may be supported in obtaining or complying with registrations and approvals such as:
- Udyam registration, where applicable;
- FSSAI registration or licence;
- GST registration, where applicable;
- bank finance and project documentation;
- food-safety and hygiene requirements; and
- other local or sectoral permissions applicable to the unit.
District Resource Persons provide handholding support for preparation of Detailed Project Reports, bank-loan applications, training, formalisation and regulatory compliance.
Branding, Marketing and Capacity Building
PMFME also supports capacity building, training, branding and marketing so that micro food-processing enterprises can improve product quality, packaging, market access and business sustainability.
Group enterprises and ODOP-based products may be eligible for branding and marketing support subject to the applicable guidelines and project approvals.
Latest Implementation Position
According to the Ministry of Food Processing Industries, by 31 October 2025 credit-linked subsidy loans had been sanctioned to more than 1.61 lakh micro food-processing enterprises, along with eligible SHGs and Farmer Producer Organisations.
In January 2026, the Ministry reiterated that PMFME is demand-driven and continues to support micro food processors through subsidy, seed capital, common infrastructure, capacity building, branding, marketing and handholding.
How to Apply for PMFME Support
- Check the current PMFME guidelines and your State/UT implementation arrangements.
- Identify whether you are applying as an individual enterprise, SHG, FPO, cooperative or other eligible entity.
- Confirm the applicable ODOP product and district preference.
- Prepare the project proposal and Detailed Project Report.
- Approach the District Resource Person or designated State/District Nodal Agency for handholding.
- Apply for bank finance and the linked subsidy through the prescribed PMFME process.
- Complete required Udyam, FSSAI, GST and other regulatory formalities where applicable.
Key Takeaways
- The current Central framework is PMFME, not a separate Gram Samridhi Yojana application scheme.
- Individual micro enterprises can receive 35% credit-linked subsidy up to ₹10 lakh per unit.
- Eligible SHG members can receive seed capital up to ₹40,000 per member.
- Eligible common-infrastructure projects can receive 35% support up to ₹3 crore.
- PMFME uses the One District One Product approach.
- The scheme provides handholding, capacity building, branding and formalisation support.