CREDIT LINKED SUBSIDY SCHEME PRT -2

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CREDIT LINKED SUBSIDY SCHEME PRT -2 (PMEGP-2)

 Why Credit Linked Subsidy Scheme Part-2 is required? After the successful implementation of the first credit-linked subsidy scheme (PMEGP) and MUDRA loan scheme, India Govt. has gone overhead for launching new schemes about the existing schemes. India Govt. has gone a survey conducted on these existing CLSS/MUDRA schemes on 31/03/2018 and find that under the PMEGP scheme or CLSS 4,66,471 units have been set up and running successfully. Similarly, 5.77 crores MSME units under the MUDRA loan scheme have been set up and running successfully. The CLSS and MUDRA loan scheme has no provisions to avail more funds to expand the running and better performing units.

WHAT IS CLSS LOAN SCHEME (PMEGP)

Presently CLSS scheme is implemented by a nodal agency called KVIC at the national level under the Ministry of MSME. At the state level, there are state KVIC, KVIB, DIC, and Bank as implementing agencies.  Considering successful implementation, the Indian Govt. has approved a fund of Rs.5,500.00 crores for three years from 2017 to 17 to 2019-20.

WHAT IS MUDRA LOAN SCHEME

MUDRA loan scheme is implemented by the Ministry of MSME, Govt. of India through Banks all over the country. It has proved the MUDRA loan Scheme that it is a bridge to connect the new and existing entrepreneurs with Banks. MUDRA loan is also issued by NBFCs/MFIs which are engaged in financing the MSME units.

WHAT SHOULD BE DONE FOR THE CREDIT-LINKED SUBSIDY

SCHEME PART -2 (PMEGP-2)

WHAT SHOULD BE DONE FOR THE CREDIT-LINKED SUBSIDY SCHEME PART -2 (PMEGP-2)
CREDIT LINKED SUBSIDY SCHEME PRT -2
The report, based on a conducted survey, showing the success of PMEGP and MUDRA loan schemes side-by-side request coming from the successful existing entrepreneurs in these schemes, also recommendation receives from Management Development Institute (MDI), Gurgaon, India Govt. is overexcited and counting it a feather in the cap of India Govt.

WHY CREDIT-LINKED SUBSIDY SCHEME PRT -2

We know that Indian industries are suffering from lacking modern technology for improving production, product quality, productivity, and packaging systems, pollution control equipment.

Keeping in mind and exercising the above facts, Govt. has encouraged and helped the MSME entrepreneurs coming under PMEGP and MUDRA loan schemes. India Govt. has launched a new scheme for expansion and modernization of the enterprises coming under PMEGP and MUDRA loan schemes. It is named by the PMEGP 2nd loan scheme.

WHAT IS THE CREDIT-LINKED SUBSIDY SCHEME PRT -2

This second loan scheme is also a credit-linked capital subsidy scheme which provides @15% on fixed capital investment. This scheme is only for successful running enterprises under PMEGP and MUDRA loan schemes.  For the manufacturing sector, the loan amount, in this scheme will be a maximum of Rs.1.00 crores. For the service and business sectors loan amount will be a maximum of Rs.25.00 lakhs. The subsidy will be calculated at @15% maximum to Rs.15.00 lakhs and for NER and Hilly states subsidy will be calculated @20% maximum to Rs.20.00 lakhs.

THE IMPLEMENTATION AGENCY

a)   At the national level, KVIC will be the Nodal Agency.
b)   At the state level state KVIC and KVIB for rural areas and DIC for urban areas will be the nodal agency.
c)   KVIB and DIC both will monitor the unit performance in both the areas rural and urban, under state KVIC coordination.
d)   NSIC, MSME-DI, SRETI, RUDSE-IT, ITI, Panchayati Raj will involve institutions and reputed NGOs in the identification of beneficiaries.
e)   COIR Board will monitor only COIR units.

ELIGIBILITY FOR CREDIT-LINKED SUBSIDY SCHEME PRT -2

1.   All successful running enterprises, loans availed from PMEGP and MUDRA loan scheme.
2.   Subsidy already has been well credited to the beneficiary account.
3.   The amount of loan availed has been repaid as per the repayment scheduled by the banks/institutions.
4.   Enterprise has been registered under Udyog Adhar Memorandum (UAM) is mandatory.
5.   The enterprise is successfully running with making a good profit from back three years.
6.   This 2nd loan will generate additional employment.
7.   The beneficiary will apply only to that Bank from where he has taken the first loan under PMEGP/MUDRA loan scheme.
8.   Other banks may provide a loan in this scheme if interested.

SANCTIONING AUTHORITY OF CREDIT LINKED SUBSIDY SCHEME PRT -2

1.   All commercial Banks.
2.   All Public sector commercial Banks.
3.   Co-operative Banks approved by State-level task force committee.

4.   SIDBI– Small Industry Development Bank of India.

THE MAIN OBJECTS OF CREDIT LINKED SUBSIDY SCHEME PRT -2

This second loan scheme is also a credit-linked capital subsidy scheme which provides @15% on fixed capital investment. This scheme is only for successful running enterprises under PMEGP and MUDRA loan schemes.  For the manufacturing sector, the loan amount in this scheme will be a maximum of Rs.1.00 crores. For the service and business sectors loan amount will be a maximum of Rs.25.00 lakhs. It will calculate the subsidy at @15% maximum to Rs.15.00 lakhs, and for NER and it will calculate Hilly states subsidy @20% maximum to Rs.20.00 lakhs.

LOAN SANCTIONING PROCESS AND AGENCY

1.   All commercial Banks.
2.   All Public sector commercial Banks.
3.   Co-operative Banks approved by State-level task force committee.

4.   SIDBI- Small Industry Development Bank of India.

6.   The additional project cost for Trading and Service Sectors will be a maximum of Rs.25.00 lakhs.

R7.   The said amount of loan will be invested only for the construction of buildings and installations of P/M for enhancement of production capacity, product quality, productivity, new packaging system, and pollution control equipment for more generations of employments.

8.   New building construction costs should not exceed 25% of total fixed assets.
9.   Expenditure on fixed assets cannot exceed by@ 60% of the total project cost.
10.               The working capital loan is at least @40% of the total project cost.

MAIN FEATURES OF CREDIT LINKED SUBSIDY SCHEME PART-2

MAIN FEATURES OF CREDIT LINKED SUBSIDY SCHEME PART-2
CREDIT LINKED SUBSIDY SCHEME PART-2
The said applicants should apply online to one of the implementing agency-KVIC, KVIB, and DIC.
2.   After complete and well scrutiny, the implementing agency will forward the application to the sanctioning authority.
3.   In scrutiny, the agency will ensure that the application is complete in all respects.
4.   The implementing agency will have to forward the application to the sanctioning Bank or returned it to the applicants to complete the packing within 15 days.
5.   After receiving the complete application from the implementing agency, the Bank will have to sanction the loan within 60 days.
6.   After sanction and disbursal of the complete loan amount, the bank will claim for subsidy in similar ways to the PMEGP scheme.
7.   The received subsidy will be kept fixed for 18 months as TDR- Term Deposit Receipts.
8.   The subsidy amount will be credited to the beneficiary loan account after the joint physical verification of KVIC and sanctioning the Bank.
9.   The physical verification report will be uploaded on the KVIC portal.
10.               Third-party verifications may be made by KVIC through an independent agency.
11.               The beneficiary may opt for the CGTMSE scheme for a guarantee of a loan.
12.               A separate application link has been set up on the PMEGP e-portal.

13.               The scheme is applicable all over the country.

DOCUMENTS REQUIRED

All the documents should be uploaded on the PMEGP e-portal.
1.   Passport-size photo.
2.   Project report for expansion/upgrading the unit.
3.   Certificate of better performing and completed repayments of the earlier sanctioned amount to the sanctioning Bank/Institution
4.   Income tax returns for three years.
5.   Unit balance sheet and Profit and loss account for three years, certified by C/A.

HOW TO APPLY FOR THE CREDIT-LINKED SUBSIDY SCHEME PRT -2

1.   Go to the KVIC e-portal for PMEGP 2nd. Loan scheme.
2.   Register yourself and get follow the instructions given by the e-portal.
3.   Fill in application details.
4.   Save the application data.
5.   Upload all the documents required.
6.   After uploading the documents click on final submission.

7.   Print the finally submitted applications for further actions required.

READ HERE – HOW TO START A SMALL BUSINESS

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