Subsidies, Grants and Loans for Village Industries

The village and small industries comprises of both the traditional and modern small industries by eight specific categories:

Handloom, Handicrafts, Coir, Sericulture, Khadi, Village Industries, Small-Scale Industries and Power looms. The last two items constitute the modern group of industries and rest being traditional.

An important position has been given to the development of village and small industries in the economic development of India, which constitute a strategic segment of the overall economy. Next to agriculture, this sector provides high employment opportunities considerably in rural and semi-rural areas. It contributes about fifty percent of the value added in manufacturing.

Prime Ministers Employment Generation Program (PMEGP)

The Prime Minister's Employment Generation Programme (PMEGP) is merger of two schemes- Prime Minister's Rojgar Yojana (PMRY) and The Rural Employment Generation Programme (REGP).

Under this scheme, the applicant is required to invest his/her capital contribution of 10 percent of the project cost. In case of Schedule Castes/Schedule Tribes and beneficiaries from other weaker sections, the applicant’s capital contribution is 5 per cent of the project cost. The remaining 90 and 95% as of the project cost, as the case may be is given by banks specified under the scheme. A certain amount of the loan under this scheme is refunded to the applicant (25% for general category and 35% for weaker sections in rural areas) which is credited after three years from the date that the loan was extended.

Interest Subsidy Eligibility Certification Scheme (ISEC)

The Interest Subsidy Eligibility Certificate (ISEC) Scheme is the prime source of capital funding for Khadi programmes. Under this particular scheme, loans are granted by the banks to meet their working/fixed capital requirements, at a concessional interest rate of 4% per annum. However, the applicants producing only Khadi or Polyvastra (a type of Khadi) are eligible under this particular scheme.

Concession Scheme

The concession on sales of Khadi and Khadi products is made to boost the sale of Khadi and to make the price of Khadi and Khadi products competitive compared to other synthetic textiles. A concession of 10 per cent throughout the year and an additional special concession of 10 per cent for 108 days in a year are given to the general customers.

Grants & Loans

A major portion of Khadi grant is utilized for the payment of sales rebate, as a promotional expenditure. The other expenditures which falls under this head are: Training, Publicity, Marketing and Interest Subsidy on bank loans under ISEC scheme.

Expenditures under this head includes: Working Capital Expenditure and Fixed Capital Expenditure.

http://www.villageindustries.info/

Pankaj Thakur is a freelance blog writer who love to write blogs in different areas.