The Planning Commission has mooted a proposal to merge two employment schemes?Pradhan Mantri Rozgar Yojana (PMRY) and Rural Employment Generation Programme (REGP).
?The maximum government subsidy to a project under the REGP scheme is Rs 4 lakh a year. On the other hand, a project under the PMRY scheme gets Rs 12,500 as subsidy. This makes REGP a more lucrative scheme, leaving few takers for the other. Thus, the Planning Commission is considering to merge both schemes,? a senior government official told FE.
However, the idea of merging the two is at a very conceptual level, sources added.
The issue came up for deliberation during the review meeting on PMRY, which was attended by secretary of micro, small and medium enterprises among others.
PMRY provides self-employment opportunities to educated unemployed youth by helping them set up micro enterprises. Projects up to Rs 2 lakh are covered under the scheme in case of individuals. If two or more eligible persons form a partnership, projects up to Rs 5 lakh are covered. Under the scheme, the government provides a subsidy of Rs 12,500 per individual. In addition, it has resulted in a rise in non performing assets of banks. Various banks have given out about Rs 2989.76 crore and managed to recover only 32% of it.
Under the REGP scheme, individuals and institutions or co-operative societies can set up projects costing up to Rs 25 lakh. Under this programme, a capital subsidy in the form of margin money is provided at the rate of 25% of the project cost up to Rs 10 lakh, which works out to Rs 2.5 lakh and 10% on the balance project cost, which amounts to Rs 1.5 lakh. Under the scheme, the borrower is required to invest 10% of the project cost.