• The Scheme was launched on 1st April 1999 throughout the country
• The objective of SGSY is to bring the assisted poor families (Swarojgaris) above the poverty line over a period of three years by providing them income generating assets through a mix of bank credit and government subsidy
• It should be ensured that the family net income of the Swarozgari is Rs.2000 per month so as to bring him above poverty line
• The funds for the Scheme are to be provided by the Central and the State Governments in the Ratio of 75:25 respectively
• For non SC/ST the subsidy will be uniform @ 30% of the project cost subject to a maximum of Rs.7500/-, while as for the SC/ST it will be 50% subject to a maximum of Rs.10000. For groups of Swarozgaris (SHGs) the subsidy portion will be 50% of the project cost subject to a maximum of Rs. 1.25 lacs or Rs. 10000 per member in the group subject to the above ceiling. The subsidy will be back ended.
• SC/STs to account for at least 50% of Swarozgaries, 40% for women (mutually exclusive), 3% for disabled
• In establishing the micro enterprises under the scheme, emphasis is on the cluster approach. For this purpose 4 to 5 key activities will be identified for each block with the approval of Panchayat samities, DRDA/ZP etc. The activity selected will be based on potentials available in the block
• For each key activity, a project approach will be adopted and project reports will be prepared for key activities by involving banks and other financial institutions so as to avoid delays in sanctioning of loans and ensure adequacy of financing
• The Banks have a proactive role in this scheme. They have to involve themselves in the planning and preparation of projects, identification of activity cluster, infrastructure planning and capacity building, choice of activities of SHGs, selection of individual swarozgaris, pre-sanction appraisal and post disbursement follow-up. The DRDA has to assist the banks in recovery of loans granted under the scheme
• The loan application forms under the scheme should be disposed off within the prescribed time limit of 15 days.
  

• The J&K SC/ST/OBC development Corporation limited has its offices at District level, which sponsor applications to its target groups and arranges credit support to them through various financial institutions. Capital subsidy @ 50% for SC, ST and 33% for OBC beneficiaries with the ceiling of Rs.6000/- and Rs.5000/- respectively is made available by the Corporation. All activities financed under IRDP, SGSY are eligible under this plan also.

• Command Area Development programme consists of two schemes namely Land Development Works and Conjuctive use of surface and Ground water, which are Centrally sponsored programmes on cost sharing basis of 50:50. The Command Area Development Programme has been conceived as an integrated programme to orchestrate all the activities crucial for increasing agricultural productivity in Command Areas leading to better utilization of created irrigation potential to optimize the production
• The small and marginal farmers in command areas covered by projects are brought under various subsidy schemes leading to better utilization of created irrigation potential. Some of the schemes involve subsidy component upto 35% and 25% respectively for marginal and small farmers. As the subsidy schemes are approved schemes issued through water resources Ministry, GOI, they are high priority schemes as far as the Command Area Development activities are concerned.  As per the approved guidelines issued by the GOI the subsidy component is available on loans lifted by beneficiaries from financial institutions.

• Ministry of Agriculture in consultation with NABARD and select banks formulated the Agri-Clinics and Agri- Business Centers Scheme to strengthen transfer of technology and provide self-employment opportunities to technically trained persons. He scheme shall also provide supplement source of input supply and services to accelerate the process of technology transfer to agriculture without the dependence of agencies

• The main features of the scheme are to supplement the efforts of Government Extension System. To make available supplementary source of inputs supply and services to needy farmers and to provide gainful employment to agriculture sector. The activities considered for financing under the Agri-Clinics and Agri-Business Centres are as unde
  • Soil & Water quality-cum-inputs testing laboratories (with automatic absorption spectrophometer).
  • Pest surveillance, diagnostic and control services
  • Maintenance, repairs and custom hiring of agriculture implements and machines including various irrigation system (sprinkler and drop)
  • Provision of live stock health cover setting up veterinary dispensation and services including frozen semen banks and liquid nitrogen supply
  • Setting up of information technology kiosks in rural areas for access to various agriculture related portals.

• Agri-Clinics:These Clinics shall provide expert services and advice to farmers on cropping practices, technology dissemination, crop protection from insects and diseases, market trends and prices of various crops in markets and also clinical services for animal health etc.
• Agribusiness Centre:These centers shall provide input supply, farm equipment on lease and other services. In order to enhance the viability of the venture the Agriculture Graduates may also take up in agriculture and allied areas along with the Agriclinics/ Agribussiness centers
• Eligibility:The Scheme shall be open to Agriculture Graduates/Graduates in subjects allies to agriculture like horticulture, animal husbandry, forestry, diary, veterinary, poultry farming and other allied activities.
• Project Cost and Coverage:The project can be taken up individually, jointly or on –group basis. The outer ceiling for cost of project by individual would be Rs.10.00 lacs and in group Rs.50.00 lacs. The group normally shall be of 5 of which one could be a management graduate with qualification or experience in business development and management. However, for availing refinance under ARF the outer limit of the project cost would be Rs.25.00 lacs subject to ceiling of Rs.15.00 lacs towards refinance availment. Project outlays above Rs.25.00 lacs may be submitted to NABARD for prior sanction
• Refinance:NABARD shall provide 100% refinance support to Banks. For availing refinance under ARF (Automatic Refinance Facility) the prescribed ceiling has been fixed at Rs.15.00 lacs beyond which the proposal have to be submitted to NABARD under existing procedure.
• Margin Money:A minimum of25% shall be contributed as margin money by the prospective borrowers.
• Rate of Interest:The rate of interest shall be applicable as per the existing guidelines
• Security:As per the norms.
• Repayment:The loan shall be repaid between 5 years to 10 years depending upon the activity. The repayment period can include a grace period depending upon the nature of activity to maximum period of 2 years.
• Selection of Borrowers:The selection of borrowers and location of the project can be done in consultation with Agriculture Universities in the area

• The objective of the MUN Scheme is to provide equity type assistance to women entrepreneurs for setting up new projects in tiny/ small scale sector for undertaking expansion, modernization, technology up gradation and diversification by existing tiny, small scale and service enterprises and for rehabilitation of viable sick units in the SSI sector which fulfill the specified eligibility criteria. This scheme is being operated through SFC/Twin-function SIDCs and eligible public and private sector scheduled commercial banks as also urban Co-operative banks (Which are eligible for direct refinance assistance from SIDBI). Assistance under MUN helps the women promoted small scale / tint / service units in strengthening their equity base and thereby improving their capability for term financing by PLIs

• New projects in tiny and small-scale sector for manufacture, preservation or processing of goods. Tiny enterprises would include all industrial units and servicing industries (except RTOs) satisfying the investment ceiling.
• Existing tiny and small-scale industrial units and servicing enterprises (including those which have availed of MUN assistance earlier) undertaking expansion, modernization, diversification and technology up gradation
• Sick units in the tiny and small-scale sector including servicing enterprises, which are considered potentially viable. The rehabilitation proposals of the sick units should conform to the norms prescribed under SIDBIs Refinance Scheme for Rehabilitation of sick industrial units
• All industrial and servicing activities (except RTOs) in the SSI sector.
• Projects which avail of any margin money or seed/special capital assistance under the scheme of Central/State Government, SFCs and other State Level Institutions or Banks (except State Investment Subsidy) are not eligible under the Scheme
• The unit should be eligible for assistance under the refinance scheme of SIDBI. Sanction of refinance in respect of term loan for the project by SIDBI is a pre-requisite for existing equity type assistance under the MUN Scheme.
• The total fund requirement of the project in the form of equity assistance under the scheme, term loan and working capital will be provided by a single agency. Central/ State Government subsidy may be retained for meeting the working capital requirement.
• Projects covered under the Single Window Scheme of SIDBI can also be extended MUN assistance if they satisfy the eligibility criteria under both the schemes. MUN assistance in such cases would, however, be admissible against the cost of foxed assets only (project cost less margin money for working capital) and not against the working capital requirements.

• The project cost (Including margin money for working capital) should not exceed Rs.10 lakh in the case of new projects. In the case of existing units, while the original investment should not exceed Rs.10 lakh, the outlay on expansion/ modernization/ technology up-gradation/ rehabilitation should also be withinRs.10 lakh per project.

• 65:35  (Excluding State Subsidy which may be extended for meeting working capital)

• 10% of the project cost.

Nature
of Assistance

• Soft loan

• Upto 25% of project cost subject to a maximum of Rs.2.5 lakh per project.

• Interest:No interest is charged on the soft loan component except service charges of 1% p.a., which may be retained by the PLIs
• Repayment Period:7 years (including moratorium upto 3 years) for soft loan. However, repayment period for soft loan would coincide with the term loan component
• Security:No security including collaterals is to be insisted upon for the soft loan.

• The scheme shall cover general credit needs of bank constituents in rural and semi-urban areas. It shall be classified as priority sector lending. 50% of credit outstanding under GCC upto Rs.25000/- will be eligible for being treated as indirect agricultural financing subject to further review of eligibility criterion

• To provide hassle free credit to banks customers based on the assessment of cash flow without insistence on security, purpose or end use of the credit. This is in the nature of revolving credit like overdraft or cash credit without stipulation for end use

• The scheme may be implemented by all Schedules Commercial Banks and RRBs at any of their branches.

Nature
of
financial accommodation:
Cash withdrawal

• The credit facility extended under the scheme will be in the nature of revolving credit. The GCC holder will be entitled to draw cash from the specified branch of bank upto the limit sanctioned and in fact this may be the only feasible mechanism in many cases.

• Banks would have flexibility in fixing the limit on the assessment of income and cash flow of the entire household. However, the total credit facility under GCC for an individual should not exceed Rs.25000/-

• Interest rate on the facility may be charged as considered appropriate and reasonable

Flexibility
in use of
credit

• The borrowers would be eligible for availment of the credit facilities provided under GCC as per their requirement without any insistence on security and the purpose.

• Government of India has approved the introduction of a new credit linked subsidy programme called Prime Minister’s Employment Generation Programme (PMEGP) by merging the two schemes that were in operation till 31.03.2008 namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. PMEGP will be a central sector scheme to be administered by the Ministry of Micro, Small and Medium Enterprises (MoMSME). The Scheme will be implemented by Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency at the National level. At the State level, the Scheme will be implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) and banks. The Government subsidy under the Scheme will be routed by KVIC through the identified Banks for eventual distribution to the beneficiaries / entrepreneurs in their Bank accounts. The Implementing Agencies, namely KVIC, KVIBs and DICs will associate reputed Non Government Organization (NGOs)/reputed autonomous institutions/Self Help Groups (SHGs)/ National Small Industries Corporation (NSIC) / Udyami Mitras empanelled under Rajiv Gandhi Udyami Mitra Yojana (RGUMY), Panchayati Raj institutions and other relevant bodies in the implementation of the Scheme, especially in the area of identification of beneficiaries, of area specific viable projects, and providing training in entrepreneurship development.

• To generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures/projects/micro enterprises.

• To bring together widely dispersed traditional artisans/ rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place.

• To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.

• To increase the wage earning capacity of artisans and contribute to increase in the growth rate of rural and urban employment.

Eligibility Conditions of Beneficiaries:

• Any individual, above 18 years of age
• There will be no income ceiling for assistance for setting up projects under PMEGP.
• For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs.5 lakh in the business /service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
• Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.
• Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme) are also eligible for assistance under PMEGP.
• Institutions registered under Societies Registration Act,1860
• Production Co-operative Societies, and
• Charitable Trusts.
• Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.

• The Bank will sanction 90% of the project cost in case of General Category of beneficiary/institution and 95% in case of special category of the beneficiary/institution, and disburse full amount suitably for setting up of the project.

• 8.2 Bank will finance Capital Expenditure in the form of Term Loan and Working Capital in the form of cash credit. Project can also be financed by the Bank in the form of Composite Loan consisting of Capital Expenditure and Working Capital. The amount of Bank Credit will be ranging between 60-75% of the total project cost after deducting 15-35% of margin money (subsidy) and owner’s contribution of 10% from beneficiaries belonging to general category and 5% from beneficiaries belonging to special categories. This scheme will thus require enhanced allocations and sanction of loans from participating banks. This is expected to be achieved as Reserve Bank of India (RBI) has already issued guidelines to the Public Sector Banks to ensure 20 % year to year growth in credit to MSME Sector. SIDBI is also strengthening its credit operations to micro enterprises so as to cover 50 lakh additional beneficiaries over five years beginning 2006-07, and is recognized as a participating financial institution under PMEGP besides other scheduled/ Commercial Banks.

• Though Banks will claim Margin Money (subsidy) on the basis of projections of Capital Expenditure in the project report and sanction thereof, Margin Money (subsidy) on the actual availment of Capital Expenditure only will be retained and excess, if any, will be refunded to KVIC, immediately after the project is ready for commencement of production.

• Working Capital component should be utilized in such a way that at one point of stage it touches 100% limit of Cash Credit within three years of lock in period of Margin Money and not less than 75% utilization of the sanctioned limit. If it does not touch aforesaid limit, proportionate amount of the Margin Money (subsidy) is to be recovered by the Bank/Financial Institution and refunded to the KVIC at the end of the third year.

• Rate of interest and repayment schedule Normal rate of interest shall be charged. Repayment schedule may range between 3 to 7 years after an initial moratorium as may be prescribed by the concerned bank/financial institution. It has been observed that banks have been routinely insisting on credit guarantee coverage irrespective of the merits of the proposal. This approach needs to be discouraged. RBI will issue necessary guidelines to the Banks to accord priority in sanctioning projects under PMEGP. RBI will also issue suitable guidelines as to which RRBs and other banks will be excluded from implementing the Scheme.

• The staff and officers of KVIC, KVIB, DIC and concerned agencies have to be sensitized on the operational modalities of PMEGP which can be imparted in the ‘one day training workshops’ to be conducted throughout the country at State / District levels by KVIC (in coordination with KVIBs) and DICs. 40 such programmes per year will be organized by KVIC and DICs (each). KVIC and DICs may organize such training workshops jointly, wherever feasible, on the basis of guidelines to be issued by KVIC separately, for this purpose.

• Registration with the KVIC/KVIBs/State DICs under the Scheme is voluntary. No registration fee will be charged from the beneficiaries and the funds available under Forward and Backward linkage will be utilized to meet expenses on documentation cost, etc. Beneficiary will submit quarterly report about production, sales, employment, wages paid etc. to the State/Regional Director of the KVIC/KVIB/State DIC, and KVIC will in turn analyze and submit a consolidated report to the Ministry of MSME, every six months.

For more information: Click here to download complete Details of this Scheme(PMEGP)