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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.

Facts:

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.
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