Economics Current

Micro Food Processing Enterprises Scheme

The union cabinet in May 2020 approved a new centrally sponsored scheme for Micro Food Processing Enterprises (FME) for the unorganised sector on all India basis, with an outlay of Rs.10,000 crore.  The expenditure will be shared by the government of India and the states in ratio of 60:40. The scheme is a part of the larger part of Atmanirbhar Bharat Abhiyan and is expected to generate a total investment of Rs. 35,000 crore and 9 lakh skilled and semi-skilled employment.
 
Features of the scheme:
·Increase in access to finance by micro food processing units
·Increase in revenues of target enterprises
·Enhanced compliance with food quality and safety standards
·Strengthening capacities of support systems
·Transition from the unorganised sector to the formal sector
·Special focus on women entrepreneurs and ‘aspirational districts’
·Encourage ‘waste to wealth’ activities
·Focus on minor forest produce in tribal districts
·One district, one product - the states would identify food products for districts keeping in view the existing clusters and availability of raw material
·Scheme will be implemented for 5 years – 2020-2025
 
Why? There are about 25 lakh unregistered food processing enterprises which constitute 98% of the sector and are unorganised and informal. Nearly 66 % of these units are located in rural areas and about 80% of them are family-based enterprises. This sector faces a number of challenges including the inability to access credit, high cost of institutional credit, lack of access to modern technology, inability to integrate with the food supply chain and compliance with the health and safety standards. Strengthening this segment will lead to reduction in wastage, creation of off-farm job opportunities and aid in achieving the overarching Government objective of doubling farmers' income.
 
·the scheme will generate employment
·The Scheme would be monitored at Centre by an Inter-Ministerial Empowered Committee (IMEC) under the Chairmanship of Minister, FPI.
·A State/UT Level Committee (SLC) chaired by the Chief Secretary will monitor the micro units and setting up of new units by the SHGs/ FPOs/Cooperatives.
·The State/UT Government will notify a Nodal Department and Agency for implementation of the Scheme.
·Convergence Framework - support from the existing schemes under implementation by the Government of India and State Governments would be availed under the scheme. The scheme would attempt to fill in the gaps, where support is not available from other sources, especially for capital investment, handholding support, training and common infrastructure.



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