Context: In order to accelerate employment generation in the country, the Ministry of MSME has done away with the role of District Level Task Force Committee (DLTFC) in recommending the proposals under the Prime Minister Employment Generation Program (PMEGP), thereby simplifying the entire procedure.
More on the news:
- As per the amended guidelines, Khadi and Village Industries Commission (KVIC), the nodal agency for implementing PMEGP scheme, 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.
- 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.
The new guidelines:
- 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 bring transparency in the process.
- 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.
All the PMEGP applications presently pending at DLTFCs level may also be withdrawn by the implementing agencies and forwarded to the banks immediately for taking credit decisions.
PM Employment Generation Programme
(Ministry of Micro Small and Medium Enterprises)
Launched in 2008, it aims 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 implemented by Khadi and Village Industries Commission (KVIC) functioning as the nodal agency at the national level.
- At the state level, the scheme is implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs) and banks.
- In such cases KVIC routes government subsidy through designated banks for eventual disbursal to the beneficiaries / entrepreneurs directly into their bank accounts
Who can apply?
- Any individual, above 18 years of age.
- At least VIII standard pass for projects costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business / service sector.
- Only new projects are considered for sanction under PMEGP.
- Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme), Institutions registered under Societies Registration Act,1860; Production Co-operative Societies, and Charitable Trusts are also eligible.
- 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.
Nature of assistance
- The maximum cost of the project/unit admissible in the manufacturing sector is ₹ 25 lakhs and in the business/service sector, it is ₹ 10 lakhs.
- Categories of Beneficiary’s Rate of subsidy under PMEGP (of project cost)
- Area (location of project/unit) General category 15%(Urban), 25%(Rural), Special 25%(Urban), 35%(Rural)(including SC/ ST/ OBC/ Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas, etc.)
- The balance amount of the total project cost will be provided by the banks in the form of term loan and working capital.
The Khadi and Village Industries Commission (KVIC)
It is a statutory body established by an Act of Parliament in 2006. In April 1957, it took over the work of former All India Khadi and Village Industries Board. It comes under the purview of the Ministry of Micro, Small, and Medium enterprises.
Objectives: The broad objectives that the KVIC has set before it are
- The social objective of providing employment.
- The economic objective of producing saleable articles.
- The wider objective of creating self-reliance amongst the poor and building up of a strong rural community spirit.
Functions: Some of the major functions of KVIC are
- The KVIC is charged with the planning, promotion, organisation and implementation of programs for the development of Khadi and other village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary.
- Its functions also comprise
- building up of a reserve of raw materials and implements for supply to producers,
- creation of common service facilities for processing of raw materials as semi-finished goods and
- provisions of facilities for marketing of KVI products apart from organisation of training of artisans engaged in these industries and encouragement of co-operative efforts amongst them.
- To promote the sale and marketing of khadi and/or products of village industries or handicrafts, the KVIC may forge linkages with established marketing agencies wherever feasible and necessary.
- The KVIC is also charged with the responsibility of encouraging and promoting research in the production techniques and equipment employed in the Khadi and Village Industries sector.
- Further, the KVIC is entrusted with the task of providing financial assistance to institutions and individuals for development and operation of Khadi and village industries and guiding them through supply of designs, prototypes and other technical information.
- In implementing KVI activities, the KVIC may take such steps as to ensure genuineness of the products and to set standards of quality and ensure that the products of Khadi and village industries do conform to the standards.
- The KVIC is authorized to establish and maintain separate organisations for the purpose of carrying out any or all of the above matters besides carrying out any other matters incidental to its activities.