Assessing the Impact of the PLI and PMFME Schemes on Food Processing Enterprises in India: Evidence from Secondary Data

Abstract

The food processing policies in India aim at increasing manufacturing capacity and enhancing the capacity of micro enterprises; however, the achievements of the programmes have been reported with care needs to be taken. The study has compared the official secondary statistics, disclosures made in the Parliament, scheme guidelines and some empirical literature available till 17 October 2026 of the two schemes, viz. the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) and the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme. Implementation outputs, enterprise outcomes and environmental performance are differentiated by descriptive growth calculations, state shares and structured policy-document analysis. A calculated 85.3% rise in nominal value of product sales was achieved from 2019-20 to 2025-26, with PLI support. By July 2026, PMFME loan sanctions have surpassed 200,000, with five states having 63.2% of the loans sanctioned by December 2025. The scheme addresses various constraints; PLI provides for the incentive for eligible manufacturing expansion while PMFME includes credit-linked upgrading and formalisation, skills and shared services. Environmental opportunities are realised by optimising equipment, protecting and recovering resources, but can also be realised by expanding production, which can raise overall resource demand. The documents reviewed do include some relevant safeguards, such as the provisions for PMFME incubation centres, however similar scheme-wide energy, water, emissions and waste outcomes are not reported in the monitoring instruments reviewed. The dairy example shows the need to consider output in the context of market and operating costs. The results do not provide causal treatment effects, but rather reach and outcomes of implementation. Policy priorities are monitoring operational enterprises, resource-efficient financing of upgrades, regional access and the dissemination of commercial and environmental data for the benefit of the enterprises.