Modi’s pet scheme to create entrepreneurs falling short of FY20 target; these many units set-up so far

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Published: March 19, 2020 6:33:30 PM

Credit and Finance for MSMEs: Under the scheme, individuals belonging to the General category can avail margin money subsidy of 25 per cent of the cost of setting up the enterprise in rural areas and 15 per cent in urban areas.

The Ministry of MSME also offers financial assistance for expansion or upgrading the existing businesses under PMEGP/MUDRA.

Credit and Finance for MSMEs: Modi government’s scheme for encouraging self-employment or entrepreneurship by providing loans to aspiring entrepreneurs for setting up micro-enterprises is falling short of its FY20 target. Prime Minister’s Employment Generation Programme (PMEGP) implemented by Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Board (KVIB) and District Industries Centres (DIC), had targeted giving financial assistance for setting up 79,236 micro-enterprises for FY20 out of which 54,361 have been set-up till March 15, 2020, according to the data shared by the MSME Minister Nitin Gadkari in a written reply to a question in the Lok Sabha on Thursday. The target is currently falling short by 24,875 enterprises to be set-up in the following 16 days.

Under the scheme, individuals belonging to the General category can avail margin money subsidy of 25 per cent of the cost of setting up the enterprise in rural areas and 15 per cent in urban areas. This is slightly higher for individuals belonging to SC/ST, OBC, minorities, women, ex-serviceman, physically handicapped, or those based in Northeastern region (NER), hill and border areas etc. to 35 per cent in rural areas and 25 per cent in urban areas. The maximum cost of setting up the business has to be Rs 25 lakh in the manufacturing sector and Rs 10 lakh in the service sector.

Also read: Coronavirus crisis: Give MSMEs concessional loans, grace period for filing taxes, Assocham tells government

The Ministry of MSME also offers financial assistance for expansion or upgrading the existing businesses under PMEGP/MUDRA to up to Rs 1 crore for manufacturing units and Rs 25 lakh for service or trading units with a subsidy of 15 per cent (20 per cent for NER and hilly states) from FY19. The government had allocated Rs 2,396 crore for FY20 in margin money subsidy for the scheme out of which Rs 1,622.50 has been disbursed till March 15, 2020.

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