Makhana and lychees help Bihar bring larger states into food processing scheme

New Delhi: Bihar has emerged as a major beneficiary of the Centre’s Pradhan Mantri Formalization of Micro Food Processing Enterprises (PMFME) programme, with processing clusters built around local specialties such as foxglove (makhana) and litchi adding a twist.

Since its inception in FY21, 31,735 businesses in Bihar have received support under the scheme — the highest in the country — ahead of the larger states of Maharashtra, Uttar Pradesh, Tamil Nadu and Madhya Pradesh, according to a senior official in the food processing ministry. The scheme saw maximum participation in sectors related to grain processing, oil and oilseeds processing, and fruit and vegetable processing, which account for most of the activities carried out by beneficiaries, official data shows.

Bihar has been followed by Maharashtra (30,773), Uttar Pradesh (25,474), Tamil Nadu (19,133) and Madhya Pradesh (15,699) since the system began, according to May 22 government data reviewed by Mint.

Read also | Made in Bihar: How superfood makhana works its magic

Among Indian states, Bihar is the lowest in terms of per capita income. In FY25, the state’s per capita income was estimated at ₹76,490, while the all-India figure was ₹2,05,324, data from the Centre’s State Budget and Economic Survey for FY26 showed.

“Bihar’s proactive approach in facilitating business start-ups and encouraging local food processing activities has helped the state secure the top position under the programme,” said Devesh Deval, Joint Secretary, Ministry of Food Industries.

Top performing district

The data shows that Patna has emerged as the top performing district in the state, with 2,594 enterprises supported under PMFME, followed by Samastipur (1,612), Muzaffarpur (1,556), Bhagalpur (1,282) and Vaishali (1,272).

“The system is increasingly shaped by area-specific food processing clusters with projects targeting locally available produce and traditional agro-based strengths,” said a senior official of Bihar’s industries department. “Foxnut (makhana) processing has become a major focus in districts like Darbhanga, Madhubani, Saharsa, Supaul and Katihar, while litchi-based processing projects are concentrated in Muzaffarpur, East Champaran and Sitamarhi.”

Similarly, businesses focused on grains or cereals and the production of pickles are also gaining strength. PMFME is implemented in Bihar with the Ministry of Industries as the nodal agency to facilitate credit subsidies, skill development and formalization for local food entrepreneurs.

Read also | China turns to India for oilmeal for cattle feed, exports grow 25x

Under this scheme, 196,270 food processing micro-enterprises across the country were supported through credit subsidies amounting to ₹5,800 crore against the total cost of the project ₹19,844 crore as on 22nd May. More than 40% of beneficiaries are women entrepreneurs, highlighting the role of the program in promoting inclusive growth and rural livelihoods.

The program has emerged as a significant initiative in strengthening India’s food processing sector, benefiting especially micro and small food entrepreneurs in rural and semi-urban areas. This has led to the formalization of over 65,000 micro food processing units with a growing number of entrepreneurs gaining Food Safety and Standards Authority of India (FSSAI) registration and adopting improved food safety, quality and packaging standards.

Subsidies associated with it

The scheme was launched in FY21 with an outlay of Rs ₹10,000 crore for five years and has been extended to 30 September 2026. It is a loan subsidy for projects up to ₹30 million each.

Launched to support unorganized food processing units, the scheme provides micro-enterprises with credit-linked subsidies, training, branding and marketing assistance with a focus on increasing competitiveness and formalization in the sector.

According to government data, self-help groups, farmer producer organizations and cooperatives have also benefited from assistance under the program, which has helped them improve food quality, packaging and market access. Officials said the initiative creates employment opportunities while increasing farmers’ income through value addition in agricultural production.

Industry experts said the system could play a key role in reducing post-harvest losses and promoting exports of processed food products. However, they also highlight the need for greater awareness, easier access to credit and stronger market connectivity to maximize its impact.

Read also | Government to help 150,000 farmers gain access to machinery and reduce stubble burning

The move is in line with the government’s broader strategy to promote food processing as a key driver of growth to increase farm incomes. “The program has enabled farmers and small entrepreneurs to shift from selling raw produce to value-added products, increasing income opportunities and reducing post-harvest losses in various districts,” said Siraj Hussain, former agriculture secretary at the Centre.

Agriculture and its allied sectors contribute about 16% to India’s gross domestic product (GDP), with about 46% of the country’s workforce dependent on agriculture.

Queries emailed to food processing departments in Bihar, Maharashtra, Uttar Pradesh, Tamil Nadu and Madhya Pradesh remained unanswered till press time.