Second Financial Assistance under PMEGP for Expansion of the Existing Successful PMEGP/MUDRA Units:
Considering the success of the scheme, and as requested
by the entrepreneurs/unit holders and also as recommended by Management
Development Institute (MDI), Gurgaon, in its Evaluation Study Report, the
Government approved continuation of PMEGP beyond 12th five-year Plan for a
period of 3 years from 2017-18 to 2019-20 with a financial outlay of Rs. 5,500
Crores. While giving such approval, a provision has also been made for
sanctioning a 2nd loan with Subsidy for upgrading the existing units, which are
performing well in terms of turnover, profit making and loan repayment.
Accordingly,
Maximum cost of the project/unit admissible under manufacturing sector for
up-gradation is Rs.1.00 Crore, and the maximum subsidy would be Rs.15
lakhs (Rs.20 lakhs for NER and Hill States).
The maximum cost of the project/unit admissible under Service/Trading
sector for up-gradation is Rs.25 lakhs, and the maximum subsidy would be
Rs. 3.75 lakhs (Rs. 5 lakhs for NER and Hill States)
For all categories , rate of subsidy (of project cost) is 15% (20% in NER and
Hill States). Beneficiary’s contribution will be 10% for all categories.
Objectives of this second financial assistance :
1. To fulfill the need of additional financial assistance for upgrading and
expansion to the successful / well-performing units .
2. To cater to the need of the entrepreneurs for bringing new technology/
automation so as to modernize the existing unit.
3. To enhance the productivity of the existing units with the inclusion of
additional dose of funding.
4. To enhance the capacity of the existing unit with the additional financial
assistance assuring additional wage employment.
Eligibility conditions for the beneficiaries:
1. All existing units financed under PMEGP/MUDRA Scheme whose margin
money claim has been adjusted and the first loan availed should have
been repaid in stipulated time are eligible to avail the benefits.
2. The unit should have been making profit for the last three years
3. Beneficiary may apply to the same financing bank, which provided first
loan, or to any other bank, which is willing to extend credit facility for
second loan.
4. Registration of Udyog Aadhaar Memorandum (UAM) is mandatory.
5. The 2nd loan should lead to additional employment generation
Other important points :
*Under the term loan component (construction of building/industrial shed,
machinery & equipment etc.), the construction of own building may be
included and ceiling of construction should not usually exceed 25% of the
total sanctioned project cost.
*The capital expenditure component including cost of construction should be
upto 60% of the total project cost. The working capital cost would be upto
Categories of
beneficiaries
Beneficiary’s contribution Rate of Subsidy (of
project cost)
All Categories 10%
(of proposed expansion/
up-gradation cost)
15% (20% in NER and
Hill States).
40%.However, the financing bank can decide the criteria at the time of
sanction of loan based on the nature of the project.
*On PMEGP e-portal, a separate application link will be given for
submitting application by the existing units for up-gradation.
* in this second finance scheme The margin money will be
kept as Term Deposit Receipt (TDR) for 18 months at finance institution/bank.
*The main objective of the scheme is to assist the well-performing units for
upgrading the units. The other points, which are already covered in the ongoing
existing PMEGP scheme, related to eligibility of the beneficiary units, negative
list, procedure for claiming the margin money by the banks and release of the
margin money subsidy through existing e-portal and retaining the subsidy in TDR
shall also be applicable for 2nd financial assistance. It should be ensured that the
second financial assistance would be applicable only for expansion/upgradation
in the existing/related activities of well-performing PMEGP/MUDRA units.
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