Subsidy Schemes
Govt has taken various initiative to support the micro, small & medium enterprises (MSME) under various Subsidy schemes. Therefore below are the summarized detail of various Subsidy schemes.
Prime Minister Employment Generation Program and Other Credit Support Schemes (PMEGP)
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 the government subsidy through designated banks for eventual disbursal to the beneficiaries or entrepreneurs directly into their bank accounts. Consequently, this streamlined process ensures that the funds reach the intended recipients efficiently.
Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
The Ministry of Micro, Small, and Medium Enterprises and the Small Industries Development Bank of India (SIDBI) jointly established a Trust named the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) in order to implement the Credit Guarantee Scheme for Micro and Small Enterprises. The corpus of CGTMSE is contributed by the Government of India and SIDBI. Specifically, 75% of the loan amount to the bank is guaranteed by the Trust Fund. Consequently, this scheme provides significant support to banks in lending to micro and small enterprises.
Collateral free loan up to a limit of ₹ 200 lakh is available for individual SME on payment of guarantee fee to bank by the SME.
To know more about scheme, Pl. Click here.
Interest Subsidy Eligibility Certificate (ISEC)
The Interest Subsidy Eligibility Certificate (ISEC) Scheme is an important mechanism for funding the khadi programme undertaken by khadi institutions. Specifically, it was introduced to mobilize funds from banking institutions to fill the gap between the actual fund requirements and the availability of funds from budgetary sources. Consequently, this scheme plays a crucial role in ensuring the financial stability of khadi institutions.
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Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
CLCSS provides a 15% subsidy for additional investment up to ₹1 crore for technology upgradation by MSEs. Specifically, technology upgradation would ordinarily mean the induction of state-of-the-art or near state-of-the-art technology. Moreover, in the varying mosaic of technology covering more than 7,500 products in the Indian small-scale sector, this scheme ensures that businesses can remain competitive and innovative. To know more about scheme, pl. click here
Important to note that:
Units looking to replace existing equipment/technology with the same equipment/technology will not qualify for subsidy under this scheme.
Units upgrading with used machinery would not be eligible under this scheme.
Financial Support to MSMEs in ZED Certification Scheme
The objectives of the scheme include inculcating Zero Defect & Zero Effect practices in manufacturing processes, ensuring continuous improvement, and supporting the Make in India initiative. Specifically, the subsidy provided by the Government of India for Micro, Small & Medium Enterprises will be 80%, 60%, and 50%, respectively. Furthermore, there shall be an additional subsidy of 5% for MSMEs owned by SC/ST/women and MSMEs located in NER and J&K for assessment, rating/re-rating, gap analysis, and hand-holding.
To Know More About Scheme, Pl. Click here.
FAQ for Schemes
Who Can Take loan Under PMEGP Scheme ?
The Loan Under PMEGP Scheme can be taken by entrepreneurs, Institutions, co-operative societies & Trust.
What is The subsidy amount amount under PMEGP Schemes ?Â
The subsidy amount depends upon the quantum of funding availed under the scheme. Specifically, the subsidy is contributed by the government to a business. Furthermore, this subsidy is given to the bank and is subject to a lock-in period of 3 years. Consequently, businesses can benefit from this financial support while adhering to the stipulated conditions.
Who can avail fund under the CGTMSE scheme ?
New and Existing MSME entities can avail fund under the CGTMSE scheme
Can the borrower directly approach trust to seek guarantee for the credits sanctioned by lenders ?
CGTMSE gives a guarantee to its MLIs. Therefore, MSME entities have to approach the banks or financial institutions with their proposal and credit requirements. Consequently, this process ensures that MSMEs can access the necessary financial support through the backing of CGTMSE.
what is the quantum of credit facility covered under the schemes ?
credit facilities up to 200 lakh per eligible borrower are covered under the guarantee scheme
What is Credit Linked Capital Subsidy for Technology Upgradation (CLCSS) Scheme ?
It is the Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation or the purchase of new machinery for SME enterprises. Specifically, this scheme aims to support small and medium enterprises in enhancing their technological capabilities and modernizing their equipment. Consequently, SMEs can improve their efficiency and competitiveness in the market.
How Much Subsidy CLCSS provide ?
CLCSS provides 15% subsidy for additional investment up to ₹ 1 cr for technology upgradation by MSEs.