Makhana and litchi help Bihar pip larger states in food processing scheme sops

New Delhi: Bihar has emerged as the top beneficiary of the Centre’s Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme, with processing clusters built around local specialties such as foxnut (makhana) and litchi giving a fillip.

Since the scheme's launch in FY21, 31,735 enterprises in Bihar have received support under the programme—the highest in the country—ahead of larger states Maharashtra, Uttar Pradesh, Tamil Nadu and Madhya Pradesh, according to a senior official in the food processing ministry. The scheme has seen maximum participation in sectors linked to grain processing, oil and oilseeds and fruits and vegetables processing, which account for the bulk of activities undertaken by the beneficiaries, official data shows.

According to government data as on 22 May, reviewed by Mint, Bihar was followed by Maharashtra (30,773), Uttar Pradesh (25,474), Tamil Nadu (19,133) and Madhya Pradesh (15,699) since the inception of the scheme.

Among India's states, Bihar is ranked 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 state budget and the Centre's economic survey for FY26 showed.

"Bihar’s proactive approach in facilitating enterprise creation, and encouraging local food processing activities has helped the state to secure the top position under the scheme," said Devesh Deval, joint secretary in the food processing industries ministry

Top-performing district

Data shows that Patna 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 scheme is increasingly being shaped by district-specific food processing clusters, with projects aligned to locally-available produce and traditional agri-based strengths,” said a senior official in the industry department of Bihar. "Foxnut (makhana) processing has emerged as a major focus area in districts such as Darbhanga, Madhubani, Saharsa, Supaul and Katihar, while litchi-based processing projects are concentrated in Muzaffarpur, East Champaran and Sitamarhi."

Similarly, cereal or grain-focused enterprises and pickle manufacturing are also gaining traction. The PMFME is implemented in Bihar with the department of industries as the nodal agency to facilitate credit-linked subsidies, skill development, and formalization for local food entrepreneurs.

Nationwide, 196,270 micro food processing enterprises have been supported under the scheme through credit-linked subsidies amounting to ₹5,800 crore against a total project cost of ₹19,844 crore as of 22 May. Over 40% of the beneficiaries are women entrepreneurs, highlighting the scheme’s role in promoting inclusive growth and rural livelihoods.

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

Entailing subsidy

The scheme was launched in FY21 with an outlay of ₹10,000 crore for five years and it has been extended till September 30, 2026. It entails credit-linked subsidy on projects of up to ₹30 lakh each.

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

According to government data, self-help groups, farmer producer organizations, and cooperatives have also availed assistance under the scheme, helping them improve food quality, packaging, and market access. Officials said the initiative is generating employment opportunities while increasing farmers’ income through value-addition in agricultural produce.

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

The move aligns with the government’s broader strategy to promote food processing as a key growth driver for increasing farm income. "The scheme has enabled farmers and small entrepreneurs to move beyond raw produce sales towards value-added products, increasing income opportunities and reducing post-harvest losses across districts,” said Siraj Hussain, a former agriculture secretary at the Centre.

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

Queries emailed to the department of food processing of Bihar, Maharashtra, Uttar Pradesh, Tamil Nadu and Madhya Pradesh remained unanswered until press time.