20-Aug-2020: Implementation of PMEGP Projects Records 44% Jump in 2020
At a time when the country's economy took a severe jolt due to Covid-19 lockdown, the flagship Prime Minister Employment Generation Program (PMEGP) implemented by Khadi and Village Industries Commission (KVIC) progressed at a much rapid pace. Thanks to a major decision of the Ministry of MSME introducing a new & faster mechanism in approving the PMEGP projects, the approval of projects during the first five months of this financial year, i.e. from April 1, 2020 to August 18, 2020, increased by a whopping 44%.
Khadi and Village Industries Commission (KVIC), has approved and forwarded 1.03 lakh project applications to the financing banks as compared to 71,556 projects during the corresponding period last year and thus registering a jump of 44%.
PMEGP is the flagship employment generation program of the Central government and KVIC is the nodal agency for implementing the scheme. The Ministry on April 28, this year amended the guidelines to do away with the role of the District Level Task Force Committee (DLTFC) in approving the PMEGP projects. The role of DLTFC, headed by the District Collectors, was time consuming. As such, the swift execution of projects under PMEGP and KVIC was demanding doing away with the same as this important scheme required greater priority. As per the amended guidelines, KVIC, the nodal agency for implementing PMEGP scheme, was entrusted the task of clearing the applications from prospective entrepreneurs and forward it to the Banks for taking credit decisions.
During the period from April to August in 2020, financing banks sanctioned 11,191 projects and Rs 345.43 crore margin money was disbursed to applicants as compared to Rs 276.09 crore margin money disbursed for 9161 projects in the first five months of previous year, i.e. 2019. The number of sanctioned projects by banks thus increased by 22% while the disbursement of margin money by KVIC increased by 24% as compared to previous year.
The faster implementation of PMEGP projects this year assumes greater significance as the entire country was under lockdown for most part of these five months. The higher number of projects also signifies the government’s resolve to create self-employment and sustainable livelihood for the people by promoting local manufacturing.
KVIC Chairman Shri Vinai Kumar Saxena said the massive jump in approval of PMEGP projects is a result of the Prime Minister’s call for “Minimum Government, Maximum Governance”. “Discontinuing the role of District Collectors has ensured swift implementation of the projects. However, the banks must also expedite the process of sanctioning funds so as to benefit the maximum number of applicants. Timely disbursal of funds is crucial for execution of projects and creating employment in the country,” Saxena said.
1-May-2020: Govt Clears "Roadblock" To Fast-Track PMEGP Projects; KVIC To Ensure Swift Execution
The pace of employment generation in the country is just going to accelerate. In a significant policy decision, the Ministry of Micro, Small and Medium Enterprises (MSME), headed by Union Minister Shri Nitin Gadkari, has done away with the role of District Level Task Force Committee (DLTFC), headed by the Distt. Collectors, in recommending the proposals under the Prime Minister Employment Generation Program (PMEGP), thereby simplifying the entire procedure.
As per the amended guidelines, Khadi and Village Industries Commission (KVIC), the nodal agency for implementing PMEGP scheme, after due diligence, will directly clear the proposals/applications of the prospective entrepreneurs and will forward it to the Banks for taking credit decisions. As of now, the proposals were scrutinized by the DLTFC, that often led to inordinate delays in sanctioning of the projects.
Chairman, KVIC, Shri Vinai Kumar Saxena said a major bottleneck has been removed with the discontinuation of the DLTFC in approving the projects under PMEGP. He thanked Union Minister Shri Gadkari for taking swift action in the interest of the country.
The government’s move has come at a time when the employment sector has taken a hit due to nationwide lockdown in the wake of the Corona disease. The amendment in the policy would pave the way for swift implementation of projects and create new employment opportunities in rural and semi urban areas under the PMEGP scheme.
It was noticed that the district Collectors/Magistrates heading the DLTFC were often preoccupied with local administrative issues and hence works pertaining to the approval of PMEGP applications was not on their priority at all. Proposals under the scheme remained pending for several months as the District Collectors failed to convene monthly meetings on regular basis. Seeking to overcome this hurdle, the Chairman KVIC Shri Saxena wrote to the Union Minister, Shri Nitin Gadkari in April 20 and requested for his immediate intervention.
“We are grateful that the Hon’ble Minister accepted our request and decided to discontinue the role of DLTFC. This will ensure swift and timely implementation of the projects. The government’s decision will safeguard the interest of lakhs of people in the country seeking employment opportunities under PMEGP.,” Shri Saxena said.
A notification in this regard was issued by the Ministry of MSME on April 28, 2020, which said the “the competent authority has decided that the role of the DLTFC as constituted under Clause 11.9 of the Scheme guidelines, may be discontinued for recommendation of proposals/applications to the financing banks.”
Significantly, the Ministry has also ordered that “all the PMEGP applications presently pending at DLTFCs level may also be withdrawn by the implementing agencies and forwarded to the banks immediately for taking credit decisions.”
As per the new guidelines, the KVIC after receiving the applications will scrutinize and examine the proposals and the corrected applications will be forwarded to the banks for taking credit decisions. Under the PMEGP scheme, loans up to Rs 25 lakhs are given for manufacturing and service industries, in which 15 to 35% subsidy is provided by the KVIC depending upon the area.
The KVIC, in association with the Bankers Association of India, shall also develop a scoring sheet and upload the same on the PMEGP E-portal. The scoring sheet will also enable the applicants to judge their applications at their level and bringing transparency in the process.
It is pertinent to mention that KVIC is playing a pivotal role in creating employment opportunities across India. PMEGP, the flagship employment generation scheme of the Government of India, is spinning a new success story every day.
It is noteworthy that since its launch in 2008, the PMEGP scheme was receiving an average of 35,000 applications per year. However, KVIC in 2016 developed an in house, user-friendly PMEGP portal and launched it in July 2016 to receive online applications under the scheme. The online facility received massive public response and the number of online applications increased manifolds up to four lakh applications per year, which itself shows the popularity of the scheme.
With increased number of applications, the number of projects has seen a steep rise in the number of projects and the amount of subsidy disbursed by the KVIC in last three years. The number of projects under PMEGP has increased from 52,912 in 2016-17 to 73,427 projects established in 2018-19. The amount of subsidy during this period has also gone up from Rs 1281 crore in 2016-17 to Rs 2070 crore in 2018-19. As many as 48,398 projects were established in the year 2017-18 while the KVIC released Rs 1312 crore for the same. The total employment generated has also increased from 4,07,840 persons in 2016-17 to 5,87,416 persons in 2018-19.
In the year 2019-20, the KVIC has released over Rs 1951 crore margin money subsidy and established 66,653 projects in the country. The KVIC had set a target of 77,000 projects at the disbursement of Rs 2400 crore in the year 2019-20, but fell marginally short of the target as three crucial months were lapsed due to imposition of the Model Code of Conduct between 10th March to 26th May 2019 for parliamentary election. Another month, i.e. March 2020, remained unproductive due to complete lockdown in the country due to Covid-19.
|
Year
|
No. of projects
|
MM released
(Rs.in Cr.)
|
Employment
(Nos.)
|
|
2016-17
|
52,912
|
1281.00
|
4,07,840
|
|
2017-18
|
48,398
|
1312.00
|
3,87,192
|
|
2018-19
|
73,427
|
2070.00
|
5,87,416
|
|
2019-20
|
66,653
|
1951.00
|
2,57,816
|
19-Mar-2020: Prime Minister’s Employment Generation Programme
Ministry of Micro, Small and Medium Enterprises (MSME) is implementing Prime Minister’s Employment Generation Programme (PMEGP), which is a major credit-linked subsidy programme aimed at generating self-employment opportunities through establishment of micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth.
The scheme is being implemented by Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Board (KVIB) and District Industries centres (DIC). Under the scheme, loan is being provided by all Public Sector Banks, selected Private Sector Banks and Co-operative Banks with margin money subsidy being given by Ministry of MSME through KVIC.
Any individual above 18 years of age is eligible for applying under the scheme. General category beneficiaries can avail margin money subsidy of 25 % of the project cost in rural areas and 15% in urban areas. Beneficiaries belonging to Special Categories such as Scheduled Caste/Scheduled Tribe/OBC /Minorities/Women, Ex-serviceman, Physically handicapped, NER, Hill and Border areas etc. can avail margin money subsidy of 35% in rural areas and 25% in urban areas. The maximum cost of projects can be Rs. 25 lakh in the manufacturing sector and Rs. 10 lakh in the service sector. Benefit can be availed under PMEGP for setting up of new units only.
Further, Ministry of MSME has also introduced a new component of second financial assistance for expansion/upgrading the existing PMEGP/MUDRA units for manufacturing unit up to Rs.1.00 cr. and for service/ trading unit up to Rs.25.00 lakhs with subsidy of 15% (20% for NER and Hilly state) from the year 2018-19.
The details of Margin Money subsidy funds allocated and disbursed under this programme during the last three years and the current year (up to 15.03.2020) in the country is given below:
|
Year
|
Margin Money Subsidy Allocated (Rs. in crore)
|
Margin Money Subsidy disbursed
(Rs. in crore)
|
|
2016-17
|
1082.90
|
1280.94
|
|
2017-18
|
1170.00
|
1312.40
|
|
2018-19
|
2068.80
|
2070.00
|
|
2019-20
(up to 15.03.2020)
|
2396.44
|
1622.50
|
A target for assisting 79236 beneficiaries to establish their micro enterprises under PMEGP has been fixed during the year 2019-20, of which 54361 beneficiaries have already been assisted up to 15.03.2020.
27-Feb-2020: 80,000 Micro Enterprises to be Assisted in Current Financial year under PMEGP
In a meeting held yesterday chaired by Shri Nitin Gadkari, Minister of MSME, and Smt. Nirmala Sitharaman, Finance Minister with senior management of all Banks, some of the key schemes of Ministry of MSME which generate large number of jobs with low capital investment were reviewed. The focus of the meeting was on the Prime Minister’s Employment Generation Programme (PMEGP), a flagship scheme of the Ministry of MSME, and Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). In addition, the issue of restructuring of stressed loans to MSMEs was also discussed to find a way forward to support MSMEs.
PMEGP is a credit linked subsidy scheme which promotes self-employment through setting up of micro enterprises, where subsidy up to 35 percent is provided by the Government through Ministry of MSME for loans up to Rs. 25 lakhs in manufacturing and Rs 10 lakhs in service sector.
Both the Union Ministers commended the work done by the Banks in supporting setting up large number of enterprises under PMEGP over the past years, which has particularly seen a two-fold increase in last Financial Year when more than 73,000 micro enterprises were assisted.
To give further boost to the scheme, the target in the current year has been increased to support the establishments of 80,000 units. In the current year, more than 46,000 units have already been provided with loans by the various Banks and additionally 22,000 loan applications have also been sanctioned and are awaiting disbursement. Banks were requested to release the loans in such approved cases immediately. Besides, the Banks were requested to take up about 1.18 lakh pending loan applications latest by 15th March, with special emphasis on North Eastern Region (NER). CMDs of the Banks, while supporting the scheme, confirmed that they will clear all pending cases by 15th March.
Data analysis of applications rejected by Banks revealed that 11% of the proposals are rejected because the targets given to local banks under PMEGP are met. To address this issue, Banks were requested to increase lending under the scheme and revise their policy of fixing minimum targets so that all eligible applications can be considered for sanction. Similarly, it was found that 11% of the applications are also rejected since the applications received by the banks were outside their service jurisdiction. Accordingly, Banks were also asked to devise a mechanism whereby such application can be automatically transferred to other appropriate branches in the area. A simple procedural change will now ensure that these applications will get considered on merit instead of being rejected summarily. The endeavour of the government is to grant a fair opportunity to every aspiring entrepreneur.
Discussions were also held with Banks on increasing the reach of Credit Guarantee scheme. Government has set a target of increasing credit guarantee to Rs. 50,000 crores under this scheme, which is a jump of about 67% over the last year. The Banks brought out that there is a huge demand under this scheme and they are confident of achieving this target.
One of the major challenges faced by MSMEs is in restructuring stressed loans due to sector related problems or issues with the large industries to which they supply. Finance Minister and Minister of MSME emphasised upon the need for providing support to the MSMEs by suitably restructuring the stressed loans at an early stage. All CMDs agreed to support MSMEs in restructuring their stressed loans. Further they confirmed that in accordance with the Budget announcement, the cut-off date for restructuring of loans to MSMEs has been already extended up to 31st December 2020.
The meeting concluded with the optimism that these initiatives taken for the MSME sector will go a long way in providing support to the sector, thereby increasing employment opportunities. The meeting with Bankers clearly indicates the resolve and efforts of the Government in supporting the MSME sector which is the backbone of the economy.
