15 GOVERNMENT SCHEMES FOR ENTREPRENEURS

1 207 GOVERNMENT SCHEMES for EntrepreneursENTREPRENEURSHIPN otesMODULE - 5 MSME and EntrepreneurialEcosystem 20715 GOVERNMENT SCHEMES FORENTREPRENEURSC hange will not come if you wait for someone else to change things for you,orfor some other time. If you work on change, change will come in your life,says Debpriya Gope, a graduate and entrepreneur. He has set up a fly ash brickmanufacturing unit that uses material produced by burning coal. This can causeserious hazards if unused. He says flyash bricks are gradually replacing stone,cement concrete solid and hollow bricks inthe construction industry. Theconcept is new and has a bright future. The unit was set up by taking a bankloan from Bangiya GraminVikas Bank (BGVB), Murshidabad. The unitemploys around 26 people.

2 The project cost is Rs. 25 lakhs and annualturnover is Rs. 2,16,00,000/-. How did Debpriya Gope become an entrepreneurby getting financial assistance and subsidy under a GOVERNMENT scheme throughDIC and Banks?The Central GOVERNMENT is implementing various SCHEMES for prospectiveentrepreneurs. Let us find out about OUTCOMESA fter studying this lesson, the learner will be able to:lexplain various GOVERNMENT SCHEMES for ENTREPRENEURS ; andlenlist special programmes for SCHEMES for ENTREPRENEURS 208 NotesMODULE - 5 MSME and MINISTER S EMPLOYMENTGENERATION PROGRAMME (PMEGP)The scheme aims to generate employment opportunities in rural as well asurban areas of the country by setting up new self-employment ventures,projects or micro enterprises.

3 It also aims:lto provide continuous and sustainable employment to a large segment oftraditional and prospective artisans and rural and urban unemployed youthin the country, to help arrest migration of rural youth to urban increase wage earning capacity of artisans and contribute to increasein the growth rate of rural and urban scheme is implemented by Khadi and Village Industries Commission(KVIC) as the nodal agency at the national level. At the state level, the schemeis implemented through state bodies, District Industries Centres (DICs) maximum cost of the project/unit admissible under the manufacturingsector is Rs25 lakh and under business/service sector is Rs10 beneficiariesAny individual above 18 years of age is eligible to seek assistance.

4 If the projectsize is above lakh in the manufacturing sector and above Rs. 5 lakh inthe business or service sector, the applicant must have passed class new projects are considered for sanction under PMEGP. Also eligibleare Self Help Groups including those below poverty line (BPL) provided theyhave not availed benefits under any other Scheme); institutions registered underSocieties Registration Act,1860; Production Cooperative Societies, andCharitable Trusts. 209 GOVERNMENT SCHEMES for EntrepreneursENTREPRENEURSHIPN otesMODULE - 5 MSME and EntrepreneurialEcosystem 209 Pickles are his strength A Success StoryThe popularity of Indian pickles and marmalade is legendary. of Delhi knew this well. After completing studies, he decided to takeup these products for his business venture.

5 He built on his ambition witheight years of experience in food technology at Meerut. Then, he startedhis unit making different varieties of pickles, juice, jams and marmaladeswith a bank loan of Rs. 4,75,000/- from Vijaya Bank, BhorGarh underPMEGP scheme of KVIC. Shri Singh says that his brand has gainedpopularity in Delhi and surrounding areas in the past two years. Thecompany s logo is well known in the market and today his annual turnoveris more than ,00,000/- which is more than double of his projectinvestment. In view of demand of his products, he is planning to expandthe unit. At present, five people are employed in this unit. He gives completecredit to PMEGP Scheme. He says, I was confident about my success,but it was not expected in such a short span of time.

6 FAQs : PMEGP is maximum project cost allowed under PMEGP? lakhs for manufacturing unit and lakhs for service the cost of land included in the project cost? much Margin Money (governmentsubsidy) is admissible?Rate of (Margin Money)Subsidy (of project cost)UrbanRural15per cent25per cent25per cent35per centCategories of beneficiaries under PMEGPArea (location of project/unit)General categorySpecial (including SC/ST/ OBC/minorities, women, ex-servicemen,physically handicapped, NER, hill andborder areas SCHEMES for ENTREPRENEURS 210 NotesMODULE - 5 MSME and is the component of project cost? Expenditure Loan, one cycle of working capital and 10 per centof project cost as own contribution in case of General category and5 per cent of project cost in case of weaker are the beneficiaries?)

7 ENTREPRENEURS , institutions, co-operative societies, selfhelpgroups, are the financial agencies? Public Sector Banks,Regional Rural Banks(RRB), Co-operativeBanks and Private Scheduled Commercial Banks approved by respectiveState Task Force is the capital expenditure loan/cash credit limit to be utilised? least once,working capital should touch should touch 100 per centlimit of cash credit within three years of lock-in period of margin moneyand not less than 75 per cent of the utilisation of sanction limit, on does the beneficiary submit the application or project proposal? can submit thesame online on KVIC website List of office addresses of KVIC/KVIB/DIC are available on our is a village industry? village industry (except those mentioned in the negative list)located in arural area which produces any goods or renders any servicewith or without the use of power and in which the fixed capitalinvestment for head of a full time artisans or worker does not exceedrupees one lakh in plains areas and lakhs in hilly areas.

8 ForAndaman& Nicobar Island and Lakshadweep, it is is rural area?A. Any area classified as village as per the revenue record of the state,irrespective of the population. It also includes an area even if classifiedas town provided if its population does not exceed 20, is the age limit? adult beneficiary above 18 years is eligible for financing underPMEGP. 211 GOVERNMENT SCHEMES for EntrepreneursENTREPRENEURSHIPN otesMODULE - 5 MSME and EntrepreneurialEcosystem 211Q. Is Entrepreneurship Development Programme (EDP) trainingcompulsory? training of 10 working days for project cost more than ; and six working days forproject cost up to lakhs to thebeneficiary is compulsory before MM Claim through PMEGP collateral security mandatory?

9 Per Reserve Bankk of India (RBI) guidelines,a project costing lakhs under PMEGP loans does not require collateralsecurity. CGTSME provides collateral guarantee for a project lakhs and upto lakhs under the PMEGP is the helpline for the beneficiary preparingfor the project? model projects uploaded on an entrepreneur submit more than one project ? QUESTIONS whether the following statements are true or )I have completed 18 years, so I can apply for the PMEGP )PMEGP scheme will create more employment opportunities for )Rural women will get 35 per cent margin money/subsidy under )Khadi and Village Industries Commission (KVIC) is the nodal agency atnational level. At state level, the scheme is implemented through stateKVIC Directorates, state Khadi and Village Industries Boards (KVIBs),District Industries Centres (DICs) and )Any individual above 18 years of age is eligible to seek assistance.

10 If theproject size is above lakh in the manufacturing sector and aboveRs. 5 lakh in the business/service sector, the applicant must have passedat least class SCHEMES for ENTREPRENEURS 212 NotesMODULE - 5 MSME and MUDRAP radhanMantri MUDRA Yojana(PMMY): Micro Units Development& Refinance Agency Ltd. (MUDRA)PradhanMantri MUDRA Y ojana (PMMY) is a scheme launched by the PrimeMinister on 8 April 2015 to provide loans up to Rs10 lakh to non-corporate,non-farm small or micro enterprises. MUDRA is an acronym for Micro UnitsDevelopment and Refinance Agency Ltd. These are classified as MUDRA loansunder PMMY. These loans are given by Commercial Banks, Regional RuralBanks (RRBs), Small Finance Banks, Micro Finance institutions (MFIs) andNon-banking finance corporations (NBFCs). The borrower can approach anylending institution mentioned above or can apply online through this Under the aegis of PMMY, MUDRA has created threeproducts:Shishu, Kishore and Tarun to signify the stage of growth and fundingneeds of the beneficiary micro unit or entrepreneur and also provide a referencepoint for the next phase of graduation or biggest bottleneck to the growth of entrepreneurship in the Non Corporate Small Business Sector (NCSBS) is lack of financial support.