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Complete Form, Scheme, Loan, and Online Application of PMRY

admin — Wed, 12 Jul 2023 05:39:00 +0000

Everything You Need to Know About Pradhan Mantri Rozgar Yojana

Meta title: Learn all about Pradhan Mantri Rozgar Yojana

Meta description: Pradhan Mantri Rozgar Yojana (PMRY) has been supporting India’s economic growth for decades. Read on to learn about the scheme and its benefits.

India is home to one of the youngest populations in the world, but the rising unemployment figures are an alarming factor. The right schemes and interventions from the government can help create more jobs for people, which is why the creation of new policies is important.

With an evergrowing population, India has been struggling with prevalent unemployment, especially among its educated youth. To harness its most valuable asset for economic growth, the government launched a historic scheme in 1993 to promote skill-based self-employment generation – Pradhan Mantri Rozgar Yojana or PMRY.

What is PMRY?

The full form of PMRY is Pradhan Mantri Rozgar Yojana, and it focuses on helping unemployed youth start small businesses. The Indian government launched the scheme to provide subsidised financial assistance to unemployed youth and women that can help them start their businesses in the manufacturing, service, and trading sectors.

The PMRY programme was originally aimed to benefit more than 1 million trained unemployed youth and women over two years and six months. However, the government decided to turn it into a permanent scheme upon witnessing its successful implementation and favourable outcome.

Over the years, the scheme has undergone many amendments and evolved to complement the changing unemployment landscape in India. Even after all these changes, the objectives remain the same – providing financial assistance for individuals to set up businesses and incentivising employers to generate employment. Read about PMRY’s objectives, benefits, and amendments in detail below.

Objectives of PMRY

The government developed the Pradhan Mantri Rozgar Yojana (PMRY) to combat widespread youth unemployment. However, with the shift in the country’s economic landscape, the scheme’s objectives have evolved. Let’s delve deeper into the specific objectives of this scheme:

Encourage Self-Employment: Pradhan Mantri Rozgar Yojana (PMRY) aims to encourage entrepreneurship and self-sustenance by providing financial support for those looking to set up small businesses. The scheme’s aim is to promote alternative methods of livelihood when jobs in the market remain limited and irregular. By disbursing loans at subsidised rates, this scheme encourages educated youth to transform their small business ideas into sustainable sources of income.

For example, if you are unable to secure a regular job but have a passion for handicrafts, you can apply for assistance as per the PMRY loan limits to start your journey. It will not only be a source of income for yourself but it also creates employment opportunities for others.
Create Job Opportunities: This scheme has the objective of dual employment generation. As per the PMRY loan eligibility criteria, you can gain access to financial assistance and create a job opportunity for yourself. Also by doing so, you can generate employment for the community.

For example, if you have used financial assistance from Pradhan Mantri Rozgar Yojana to start a small handicrafts and artwork business and, in the process, you hire local workers to scale up your operations, you have not only ensured your income flow but also boosted the economy by creating jobs and solving the problem of unemployment at a smaller level.
Boost Income Levels: PMRY aims to improve the economic condition of individuals by promoting self-reliance as a means of earning a livelihood. This boosts the family’s income level, breaking the cycle of unemployment and poverty.

Say your handicrafts business scales up as a result of receiving financial assistance under the scheme; this will ensure your financial stability and improve the standard of living of the people who work for you. This boost in income at an individual level will ultimately contribute to the overall economic growth.
Promote Women’s Entrepreneurship: Pradhan Mantri Rozgar Yojana (PMRY) recognises the need to uplift the status of women in society by involving them in the process of nation-building and economic growth. It offers special assistance to women entrepreneurs in terms of reserved application spots, a simplified selection process, and subsidised rates of assistance.

By fostering and empowering women entrepreneurs, this scheme aims to create a sustainable and inclusive ecosystem to nurture entrepreneurship, promote self-reliance and build an enabling environment to create more jobs and eliminate gender-based discrimination in India.

Features of PMRY

If you are exploring PMRY loan eligibility, let’s first understand the notable features of this relief scheme.

Financial Assistance: Under this scheme, you can avail financial assistance for all economically viable business activities. Assistance is available for all types of industrial, business, and service ventures. Furthermore, an amendment to the scheme has brought agriculture and related activities within the scope of the assistance provided, excluding direct agricultural activities such as arable farming, purchase of fertilisers or soil improvers, and such.
Loan Limit: The central government promotes Pradhan Mantri Rozgar Yojana in both urban and rural areas. According to recent amendments to the scheme, here are the PMRY loan limits.

Sector	Maximum Prescribed Limit
Business	INR 1 lakh
Service	INR 2 lakhs
Industrial	INR 2 lakhs
Partnerships	INR 10 lakhs

Collateral: If your project costs below or up to INR 1 lakh, there is no collateral requirement. The government has extended this exemption to partnership projects where the exemption limit applies per partner in the project. For projects approved in small-scale industries (SSI), the collateral exemption limit is INR 5 lakhs.
Subsidy and Margin Money: The grant is restricted to 15% of the total project cost, with a ceiling of INR 7,500 per entrepreneur. Also, the lending institution can charge a percentage sum of margin money, ranging from 5% to 16.25% of the project cost.
Rate of Interest: No specific interest rate prevails under the scheme, which means that lenders will charge a normal interest rate according to your PMRY loan limit.
Repayment: Once an individual sets up a business and starts commercial operations, they must start repaying the loan and the interest applicable. The repayment period ranges between three and seven years under the scheme. After analysing the project, your PMRY loan eligibility, and other related factors, the lender will determine the repayment period for your specific case.
Skill Development: You will receive 15 to 20 days of training to help you set up your business. The ceiling amount for training and operating costs is INR 2,000 per case.
Implementation and Evaluation: The Development Commissioner for Small-Scale Industries (DCSSI) of the Ministry of Small, Rural and Agricultural Industries heads the PMRY scheme. Implementation occurs at the state level through the Small Industries Service Institute (SISI), which has 30 branches across major Indian cities. DCSSI has set up a special unit to monitor, evaluate and accordingly amend the scheme.

Now that you have understood the features governing the PMRY loan limits, it’s important to understand the qualification standards or PMRY loan eligibility.

What is PMRY Eligibility?

PMRY’s main intention is to bridge the socioeconomic gap and reduce unemployment in the country. To ensure that this scheme reaches its target beneficiaries and to protect the limited resources of the scheme, the government has specified certain conditions. In case you wish to enjoy the benefits under this scheme, consider these parameters to check your PMRY loan eligibility.

Age Limit: The basic PMRY loan eligibility criteria is the age limit, which includes two categories for educated and unemployed people.

Category	Limit
Standard age limit	18-35 years
Women, SC/STs, ex-servicemen, and the physically handicapped	18-45 years

Educational Qualification: Those who have cleared Class 8 from a recognised educational institute are eligible under this scheme. The government gives particular preference to applicants who have completed at least six months of training at a recognised institution.
Family Income: At the time of application, the income of the applicant, along with those of their spouse and parents, should not exceed INR 40,000 per month.
Residence. As a criterion for PMRY loan eligibility, you should be a permanent resident of the area from which you have applied for the scheme for at least the previous three years.
Defaults: You should not have defaulted in the repayment of any credit or scheme benefits to a bank or financial institution. Policy exclusion will occur from this scheme if you have already received support under other subsidy-linked government schemes.
Reservation: PMRY ensures special preference for women as well as the weaker sections of society. There is a 22.5% reservation for Scheduled Castes and Scheduled Tribes (SC/ST), and 27% for Other Backward Classes (OBCs).
Entrepreneurial Talent: One of the key factors in determining PMRY loan eligibility is the individual’s intent to set up a business and create jobs. While interviewing an applicant, the task force will look at their ability to create a sustainable livelihood through self-employment.

Banks and District Industries Centres (DICs), which have been set up by the government to provide the necessary services and support for entrepreneurs looking to set up micro, small and medium enterprises (MSMEs), will analyse your application to ensure you meet all the requirements for PMRY loan eligibility before giving approval. They may provide exceptions on a case-by-case basis.

How to Apply for PMRY

Here’s a quick guide on applying for the scheme:

The first and most important step is to finalise your project idea, based on which you have to prepare a detailed project report. An ideal project report should contain the following:

Value of fixed assets
Raw materials required
Estimated expenditures such as rent, salaries, and more.
Projected sales, profits, breakeven analyses, and profitability ratios
Repayment schedules
A market study of the proposed venture.
1. Applicants can find the application form on the official website of Pradhan Mantri Rozgar Yojana here: https://dcmsme.gov.in/publications/forms/pmryform.html. Download the form, and fill in the details along with the required documents.
2. The applicant must submit the completed application form to the local DIC or the nearest bank. The DIC/bank will review your application and invite you to an interview, which the PMRY task force will conduct.
3. Once you receive approval, you will receive an intimation letter of selection and allotment from the designated lender. You can discuss the viability of your project with the allotted lender and make the necessary alterations to the business plan.
4. As part of the selection process, you will receive training under the scheme’s guidelines. You must submit the certificate of completion to the bank to receive the funds.
5. As a final step, the DIC/bank extends its support in grounding the approved project. Before commencing operations, you may have to take relevant approvals and clearances from bodies like local municipal committees, the panchayat, the pollution control board, or tax authorities. You can check with your local DIC to get assistance with these clearances.

What are the Documents Required for PMRY Application?

You must submit the duly completed application form to the local DIC or bank together with certified copies of the following documents:

Proof of date of birth (state secondary certificate (SSC) or a transfer certificate (TC) from your school)
Certificate of academic and technical qualifications
Ration card or any other proof of residency that states you have been a resident of that area for more than three years
Experience certificate, if any
Income certificate issued by the mandal revenue officer (MRO) of the concerned mandal or administrative division
Caste certificate issued by the MRO, if applicable
Driving licence in case of candidates applying for motor vehicles
Copy of the proposed project report
Passport-size photographs
Training certificate
Any other specific document required by the DIC/lender.

Why PMRY is the Need of the Hour

The government introduced Pradhan Mantri Rozgar Yojana as a pioneering step towards creating a level playing field for educated youth in India. Through features like repayment flexibility, skill development opportunities, and uplifting weaker sections, the scheme helps build a conducive context for able entrepreneurs who find it difficult to secure appropriate jobs.

Depending on the requirements and prevalent conditions, the government keeps modifying PMRY for the benefit of the intended beneficiaries. You will need to stay updated with all the recent developments in the scheme if you wish to apply for the assistance provided. You can reach out to the experts at FlexiLoans to stay updated and understand the technicalities of this incredible scheme.

About FlexiLoans

At FlexiLoans, we understand the importance of financial assistance for fulfilling your dreams especially when it is hard to secure funding. Our flexible solutions and simplified application process make it easy for you to start your MSME journey. We offer , term loan, , and more. Visit our website to learn more about our loan terms and conditions, and take the next step towards self-reliance. Check out our business loan calculator, , and business loan eligibility criteria.

Frequently Asked Questions

Q. 1 When was PMRY started?

Ans: PMRY, or Pradhan Mantri Rozgar Yojana, was set up by the Indian government on 15 August 1993. It was later launched on 2 October 1993 across the entire country.

Q. 2 When can I apply for the PMRY scheme?

Ans: You can apply for PMRY at any time during the year, although it is advisable to apply between the months of April and June. You can download the application form from the scheme’s online portal.

Q. 3 Can I avail of the benefits of PMRY in addition to other subsidies?

Ans: Unfortunately, you cannot apply for the PMRY scheme if you have already availed of any other government-sponsored subsidy or initiative.

Q. 4 Are there any processing charges for a PMRY loan?

Ans: No, there are no processing or hidden charges in a PMRY loan. However, lenders can charge a sum of margin anywhere between 5% to 16.25% of the total project cost.

Q. 5 What are the PMRY loan eligibility criteria?

Ans: The government has specified PMRY loan eligibility criteria to apply for financial assistance. A person aged between 18-35 who has cleared Class 8 (or metric pass) and has a gross total family income of less than INR 40,000 per month can apply for this scheme. Furthermore, such a person should have been a resident of the area from which they are applying for at least three years. However, there are certain exceptions provided for in the scheme’s guidelines on a case-by-case basis.

Q. 6 How does PMRY benefit the weaker sections of society?

Ans: This government scheme has specific reservation levels for women as well as the weaker sections of society. There is a 22.5% reservation for Scheduled Caste/Scheduled Tribes (SC/ST) and 27% for Other Backward Classes (OBCs).

If, in any particular instance, SC/ST/OBC candidates are not available, the state government has the autonomy to consider candidates from other categories.

Q. 7 What are the prerequisites before commencing a project under PMRY?

Ans: Before starting a project under this scheme, you will have to:

Deposit the margin money with the bank
Seek permission from the applicable local body (municipality or the panchayat)
Deposit the applicable collateral security
Seek clearance from the Pollution Control Board for your enterprise, if required
Apply for necessary tax registrations like Goods and Service Tax (GST) and income tax
Check if you need other business registrations like MSME registration, and Shops and Establishment Certificates
Register with a District Industries Centre (DIC) to avail of state government incentives.

Q.8 Since its introduction, what changes has the government made to Pradhan Mantri Rozgar Yojana?

Ans: Here are some of the amendments the government has made to this scheme:

The upper age limit for applicants from the northeastern states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim is now 40 years.
The minimum education qualification requirement has been brought down from Class 10 to Class 8.
The higher limit for the cost of a project is now INR 2 lakhs, which was previously INR 1 lakh.
The government has revised the PMRY loan limits over the years.

Check out more Government Schemes

The post Complete Form, Scheme, Loan, and Online Application of PMRY appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

SIDBI Schemes – Full Form, Functions, and Loan Application Steps

admin — Tue, 11 Jul 2023 09:13:00 +0000

Micro, small, and medium enterprises (MSMEs play a crucial role in the Indian economy. They contribute significantly to employment generation, innovation, and overall economic growth. However, they often face numerous challenges that hinder their sustainability and growth.
Access to funds continues to be a significant challenge for small businesses in the country. A survey by the Ministry of Micro, Small and Medium Enterprises (M/o MSME) revealed that about 56% of MSMEs lack access to formal credit. Limited financial resources make it difficult for these enterprises to invest in technology upgradation, research and development, and market expansion.
Another significant challenge is the lack of skilled workforce. Many MSMEs struggle to attract and retain skilled employees due to competition from larger companies and inadequate training facilities. This affects their productivity and efficiency.
Infrastructure deficiencies also pose challenges for small companies. Furthermore, inadequate transportation facilities, power shortages, and limited access to industrial parks or specialised zones impede their operations and increase costs. SIDBI came into existence to address these challenges and is playing a pivotal role in the economy.

What is SIDBI?

Small Industries Development Bank of India, the full form of SIDBI, is the principal financial institution for developing, promoting, and financing the country’s MSME sector. The government established the bank on April 2 1990 as a wholly-owned subsidiary of Industrial Development Bank of India. SIDBI delinked from IDBI on March 27 2000 and has headquarters in Lucknow and offices all over the country.

SIDBI’s mission is to facilitate and strengthen credit flow to firms as well as address financial and developmental gaps in the MSME ecosystem. One of the key objectives of SIDBI is to establish itself as a unified platform that addresses the developmental and economic requirements of the MSME sector, aiming to strengthen it, foster vitality, and enhance its global competitiveness.

To date, the bank has supported more than 450 lakh enterprises, created more than 1,200 lakh jobs, and contributed more than 7% to the country’s GDP.

SIDBI Functions and Objectives

The bank performs various functions to fulfil its mission. These include:

Promotion and Development: SIDBI promotes and develops the MSME sector by providing non-financial assistance. These include technology upgradation and marketing support, as well as the development of skills, enterprises, and clusters. It also undertakes research and advocacy activities to create a conducive policy environment for MSMEs.
Venture Capital Funds: The bank supports entrepreneurship and innovation by investing in venture capital funds. These funds finance emerging startups in various sectors. It also manages certain government schemes that provide equity support to startups.
Direct Financing: SIDBI directly finances MSMEs by offering innovative and customised lending products. These products address the specific needs and gaps of MSMEs. Some of the direct finance products provided include service sector financing, receivables support, risk capital, and sustainable funding.
Indirect Financing: The bank provides indirect financing to MSMEs by offering refinancing for banks, financial institutions, microfinance institutions, and fintechs that lend to MSMEs. This helps to increase the availability and affordability of credit for MSMEs.
Facilitation: Another SIDBI function involves facilitating the MSME sector by coordinating with various stakeholders such as government ministries, regulators, industry associations, academic institutions, and other financial institutions. The bank also serves as a nodal or implementing agency for various government schemes that benefit MSMEs.
Green Environment: SIDBI aims to support national plans on climate change. The bank contributes to mitigating greenhouse gas emissions and adaptation to climate change impacts by promoting projects based on renewable energy, green financing, waste management, and resource efficiency among MSMEs. It also implements various schemes and projects under the National Action Plan on Climate Change.

SIDBI Schemes Involving Direct Financing

Under direct financing, the bank offers the following 15 schemes:

1. Express 2.0

This SIDBI scheme aims to offer a swift approval process through an automated platform for MSMEs seeking term loans. It is exclusively for new customers in the manufacturing and service sectors that wish to acquire machinery or equipment. The loan amount is up to Rs. 1 crore, and the tenure is up to five years. The interest rate links to the Marginal Cost of Funds Based Lending Rate (MCLR).

Eligibility Criteria:

You must possess Udyam and GST registrations.
Your business must have a minimum operational history of three years.

2. SAATH

SAATH stands for SIDBI Assistance & Aid for Thematic Support to MSMEs promoted by SC/STs. This scheme offers loan assistance on relatively softer terms for establishing new or greenfield units, or expanding or modernising existing units. The loan amount ranges from Rs. 25 lakhs to Rs. 300 lakhs. Under this scheme, SIDBI bears 50% of the credit guarantee fees. In addition, SAATH has nil prepayment charges and is well-known for quick disbursement.

Eligibility Criteria:

The promoters of the firm must belong to the SC/ST category and must possess a minimum stake of 51% in the company.
The applying firm should not have any default record with banks and financial institutions.
The company must be registered under the provisions of the MSME Act.

3. ARJANA

This SIDBI scheme is for MSMEs operating in the service and manufacturing sectors with women entrepreneurs. This loan’s minimum and maximum disbursement rates are Rs. 25 lakhs and Rs. 300 lakhs respectively.

Eligibility Criteria:

Business registration must be as per the MSME Act.
The woman entrepreneur should have a 51% stake at minimum in the company.
The company must clear a due diligence check conducted by Credit Information Bureau India Limited (CIBIL).
The company must not have any default record with banks and financial institutions.

4. STEP

STEP stands for SIDBI Term Loan to Enhance Production of MSMEs. This facility assists in helping a company meet its working capital requirements and ensuring it can easily execute confirmed orders. This scheme is also designed to help augment the net working capital (NWC) of such firms. STEP offers loans of up to Rs. 200 lakhs to new customers and up to Rs. 300 lakhs to existing customers.

STEP is well-known for its quick sanctioning, usually completed within two days, as well as its zero processing fees. The repayment tenure is three years, which includes a six-month moratorium period.

Eligibility Criteria:

New applicants must have been operating their business for at least three years while existing customers must have a minimum operational history of two years.
Micro enterprises applying for the loan must demonstrate a profit in the last two financial years. On the other hand, existing customers should have maintained a profitable business for at least one year.
There must be no records of debt default.

5. Ubharte Sitaare

This SIDBI scheme targets MSMEs that have the potential to become export champions. The sanctioned funds are accessible for land, building, and advanced machinery investments, ultimately facilitating modernisation, capacity upgrades, and diversification. Under this scheme, the maximum funding available is up to 80% of the original project cost, which means you can classify it as need-based funding. The repayment tenure generally lasts up to six years, which is extendable up to 10 years and includes a moratorium of up to two years.

SIDBI offers this loan without requiring a joint partnership with Export-Import Bank of India (India Exim Bank). Some of the sectors eligible under the Ubharte Sitaare scheme are:

Chemicals
Aerospace and defence
Pharmaceuticals
Automobiles
Food processing
Precision engineering
IT and Information Technology Enabled Services (ITES)
Textiles and allied sectors.
Eligibility Criteria:
- For new units, the company’s promoters must have sufficient experience in the relevant industry as well as demonstrate major projected revenue from exports. However, for units co-funded by entrepreneurs from reputed institutions such as IIT, IIM, IISc and NIT, sufficient industry experience is not a requirement.
- For existing units, the scheme requires fundamentally strong export-oriented MSMEs with satisfactory financial performances.
- The company should clear a due diligence check conducted by CIBIL.
- The promoters’ stake in the company needs to be 20%, which increases to 30% for greenfield units.

6. STHAPAN

STHAPAN stands for SIDBI Thematic Assistance for Purchase of Capital Assets in New Enterprises. It offers monetary support to greenfield units to assist them in establishing and expanding new units. The funds are available for investment in land and equipment, as well as the construction of new factory buildings.

STHAPAN provides maximum funding of up to Rs. 2,000 lakhs or 75% of the project cost, whichever is lower. The applicable interest rate for the first year is 2.20%-3.50% and links to the repurchase (repo) rate. Subsequently, the rates adjust based on the internal rating. The repayment tenure is seven years, including a moratorium of up to two years.

Eligibility Criteria:

The MSME should have been in operation for at least five years.
The firm must have a consistent history of generating profits and maintaining stable sales. The promoters’ contribution to the company should be a minimum of 25%.
The company must successfully pass the standard diligence check norms by CIBIL, such as the CIBIL MSME Rank (CMR).

7. ARISE

ARISE, which stands for Assistance to Re-Energize Capital Investments by SMEs, offers two types of facilities: foreign currency and regular-term loans. This SIDBI scheme’s maximum loan amount is Rs. 700 lakhs or 80% of the project, whichever is lower. The applicable interest rate ranges from 1.70%-3.00% plus the repo rate from the first year. From the following year onwards, the internal rating system adjusts the rates. The repayment period for ARISE loans is seven years, which includes a two-year moratorium.

Eligibility Criteria:

The firm must have been operational for at least two years.
The company’s audited financials must display its cash profits.
The contribution from the promoter should be at least 25%.

8. STAR

STAR, which stands for SIDBI Term Loan Assistance for Rooftop Solar PV Plants, assists MSMEs in reducing their electricity bills. The minimum and maximum funding available under this SIDBI scheme is Rs. 10 lakhs and Rs. 350 lakhs respectively. STAR offers attractive features such as 100% financing, direct payment to the supplier, and an interest-bearing fixed deposit of 15%-25% of the loan amount. The repayment term for the STAR scheme is 60 months, which includes a moratorium period of 6-12 months.

Eligibility Criteria:

For new customers, the firm must have a minimum of three years of operational history. However, existing customers only need a minimum of two years of operational history.
The business must demonstrate a profit for at least two years.
The proposed capacity should not exceed the connected load level.
The maximum funding available will be 25% of the company’s net sales.

9. TULIP

TULIP, which stands for Top Up Loan for Immediate Purposes, is a scheme that aims to assist companies in meeting their urgent financial needs. TULIP offers 100% financing, but its availability depends on a 10% fixed deposit (FD) and the extension of this charge. One noteworthy aspect of this product is that it does not require collateral other than the FD. The repayment tenure of this SIDBI scheme is five years, which includes a moratorium of six months.

Eligibility Criteria:

Since this is a top-up loan, at least 1 year of association with SIDBI is necessary.
The loan purpose should relate to the same business line.
The company must demonstrate at least one year of profitability.

10. Speed

SPEED, which is an abbreviation for SIDBI Loan for Purchase of Equipment for Enterprise’s Development, allows new units to purchase machinery from original equipment manufacturers (OEMs) that have signed a memorandum of understanding (MoU) with SIDBI. Existing customers of the bank have the flexibility to make purchases from any OEM.

For new units, the funding assistance provided is 100% of the machinery cost or Rs. 1 crore, whichever amount is lower. On the other hand, existing customers have a higher ceiling of Rs. 2 crores. The repayment tenure for SPEED ranges from two to five years, which includes a moratorium period of up to six months.

Eligibility Criteria:

The company must have been operational for at least three years.
The firm must demonstrate cash profits for the previous two years.

11. Speed Plus

This SIDBI scheme aims to assist MSMEs in purchasing machinery directly from OEMs. The funding assistance for new borrowers is set at 100% loan-to-value of the machinery cost as long as the purchase amount is up to Rs. 2 crores. For existing customers, this amount increases to Rs. 3 crores. However, the actual disbursements may be lower if the applying company has a lower repayment capacity.

The interest rate for Speed Plus depends on the MCLR. The repayment tenure is seven years, including a 6-12 month moratorium.

Eligibility Criteria:

The applying unit must have been in operation for at least five years.
The firm must be able to demonstrate cash profits for the past three years.
The firm’s minimum net sales for the past two years should amount to Rs. 5 crores, without any operating loss.

12. PRATHAM

PRATHAM stands for Priority Assistance to MSMEs Based on Hybrid or Alternate Security Model. MSMEs can choose to opt for this SIDBI scheme to purchase machinery, buy ancillary equipment, and refurbish machines. Additionally, ineligible machines under the Speed Plus and Speed schemes also qualify under the PRATHAM scheme.

The maximum funding available is 10% of the machinery cost or Rs. 300 lakhs, whichever is lower. However, this funding amount depends on 30-40% of the FD provided. The interest rate is MCLR-linked and the repayment tenure is five years, including a moratorium period of 6-12 months.

Eligibility Criteria:

The MSME must have been operational for at least three years.
The firm should have recorded cash or net profits in the previous three years.

13. Working Capital

This SIDBI scheme is exclusively available to MSMEs with an outstanding term loan with the bank or who have submitted a proposal to obtain a term loan. The loan offers firms an immediate cash infusion to support their business operations, enabling them to fulfil their day-to-day expenses.

Eligibility Criteria:

The firm must have a current ratio of 1.25.
The overall asset coverage ratio requirement is set at 1.3 for existing units and 1.4 for new projects.
There should be a minimum interest coverage ratio of 1.5.

14. SMILE

SMILE stands for SIDBI Make in India Soft Loan Fund for Micro, Small and Medium Enterprises. This scheme provides financial assistance to 25 target sectors, enabling them to invest in growth opportunities. These sectors include aviation, construction, railways, pharmaceuticals, textiles and garments, and roads and highways.

Under the SMILE scheme, funds are available in two types; the first is a soft loan, provided in the form of quasi-equity. The second type is a term loan, which is available on relatively soft terms.

The minimum funding available under the soft loan is Rs. 10 lakhs for equipment purchase and Rs. 25 lakhs for other purposes. In contrast, for the term loan, the minimum funding for new customers is Rs. 50 lakhs, while for existing customers, it is Rs. 25 lakhs.

The repayment tenure for the SMILE scheme is 10 years, which includes a 36-month moratorium period. Furthermore, for the soft loan, the interest rate for the first three years ranges from 9.15% to 9.35%, and for term loans, it ranges from 9.45% to 9.95%. However, starting from the fourth year, the interest rate ranges from 11.70% to 12.70%, which can be a floating or fixed rate.

Eligibility Criteria:

The firm must have a minimum promoter contribution of 15% subject to a maximum debt-to-equity ratio (D/E ratio) of 3:1.

15. Partnership with OEMs

This SIDBI scheme serves as a comprehensive solution for MSMEs seeking to purchase plants and machinery directly from OEMs, and is well-known for its simplified credit disbursement process. Typically, the scheme offers loans of up to Rs. 100 lakhs but this amount can increase under special circumstances and specific guidelines from the bank.

The repayment tenure for such loans extends up to 60 months, including the moratorium period. The interest rate applied to the funding follows the guidelines of the SIDBI SMILE scheme.

Eligibility Criteria:

The firm must have been in operation for at least three years.
The company must have satisfactory financial statements.

SIDBI Schemes Involving Indirect Financing

Under indirect financing, the bank offers the following schemes:

1. Refinance Scheme for Micro and Small Enterprises (RMSE XII)

This SIDBI scheme provides refinance assistance to prime lending institutions (PLIs) for lending to micro and small enterprises (MSEs) at a rate linked to the 10-year Indian government bond yield. The scheme has two variants: RMSE XII-Regular and RMSE XII-ICDD.

Under RMSE XII, the loan amount depends on the applying company’s repayment capacity, and the repayment period can be up to five years. The scheme covers various activities such as manufacturing, services and trading. The eligibility criteria for MSEs are three years of operational history and demonstrated profitability in the past two years.

2. SIDBI Revolving Fund for TIFAC

This fund provides refinancing assistance to PLIs when lending to MSMEs for technology upgradation under the Technology Information Forecasting and Assessment Council (TIFAC) programme. Under this, the government aims to promote innovation and research in MSMEs by facilitating their access to technology from diverse sources such as research institutions, universities, and more.

The funding can go up to Rs. 100 lakhs per unit and the repayment period is six years (including a moratorium) starting from the project completion date. The interest rate on the funding has a cap of 5% per annum.

3. Receivable Finance Scheme

This SIDBI scheme provides refinancing assistance to PLIs for the discounting or factoring of receivables for MSMEs. It aims to enhance MSMEs’ liquidity and cash flow by enabling them to sell their invoices or bills at a discounted rate to PLIs.
The scheme’s funding criteria depend on the needs of the MSMEs. In the case of large purchase corporations, the funding limit can be Rs. 50 crores at most. The approved limits are valid for one year.

4. Refinance Assistance to MSMEs for the Purpose of Export (RAMPE)

This SIDBI scheme provides refinancing assistance to PLIs for lending at attractive interest rates to MSMEs engaged in export activities. The funding is subject to an exposure limit set by SIDBI for each bank and various other parameters. The repayment period can extend up to five years. The scheme covers both pre-shipment and post-shipment finance for exports.

Disclaimer: The interest rates for both direct and indirect SIDBI financing products are subject to change. Please refer to the bank’s website before applying for any of these schemes.

How to Apply for a SIDBI Loan

Here are the steps involved in the SIDBI loan application process:

Visit the bank’s official website at https://sidbi.in/en/
Under the ‘Direct Loans’ option, you can find various SIDBI schemes
Click on ‘’ under the Preferred Loan Product box
Click on ‘Registration Form’
Enter your enterprise’s name, email address, and the mobile number registered with Udyam, and create a password
again on the SIDBI portal, choose the relevant scheme, and enter the required loan amount
Share basic details such as the business address, district, and pin code
SIDBI officials will then send a confirmation mail to the email address provided. Once the applicant agrees, the next steps will involve application evaluation and disbursement.

Documents Required for SIDBI Schemes

The list of documents necessary for SIDBI loan processing varies for each scheme. However, the following are the most common documents required:

Application form; this must be duly filled and signed by the applicant
KYC documents of the applicant and co-applicants
Business profile and project report
Audited financial statements for the past three years
Provisional financial statements for the current year
Bank statements for the past six months
Copy of the Udyog Aadhaar Memorandum (UAM)
Copy of the GST registration certificate (if applicable)
Copy of consent for establishment from the Pollution Control Board (if applicable)
Copy of sanction letters from other lenders (if any)
Proforma invoice or quotation of items to MSMEs that wish to purchase
Any other document as required by SIDBI.

Benefits of SIDBI Schemes

SIDBI schemes offer several benefits. These include:

Customised Products: SIDBI understands that different MSMEs have varying needs and challenges. Thus, the bank offers customised loans that suit your business requirements. You can choose from various loan products that cater to your specific purpose, such as purchasing equipment, expanding production, upgrading technology, developing new products, and more. You can also avail of loans for working capital or receivables financing.
Attractive Interest Rates: SIDBI offers loans at attractive interest rates that are lower than market rates. This is because the bank has tie-ups with various lenders and foreign financial institutions that provide funds at discounted rates. SIDBI also passes on the benefits of government subsidies and schemes to MSMEs.
Collateral-Free Loans: Some SIDBI loans are available without collateral or security, and provide funding of up to Rs. 1 crore. This makes it easier for MSMEs to access finance without worrying about pledging their assets. SIDBI also covers some of its loan products under the Credit Guarantee Scheme.
No Tempering of Company Ownership: SIDBI does not interfere with the ownership or management of your company when you take a loan. You retain full control over your business decisions and operations and the bank only monitors the performance and repayment of your loan.
Transparent Procedures: SIDBI follows a transparent and simple procedure for loan application and sanction. You can apply online through its portal or mobile app and upload the required documents. The bank evaluates your loan proposal based on factors such as your credit score, business profile, and financial statements. You can enjoy the convenience of monitoring your loan application status online.
Special Assistance: This SIDBI function includes mentoring, capacity building, and advisory services to enhance business skills, technology adoption, and market access. The non-financial aid supports project preparation, feasibility studies, market research, and skill development programmes. These initiatives empower small businesses with the knowledge, tools, and expertise to navigate challenges.
Flexible/Customised MSME Business Loans: Startups and small-scale enterprises sometimes struggle to get adequate financing for their operations. SIDBI provides numerous lending programmes to their consumers. If a person has a specific need, the institution can issue customised MSME loans for businesses based on the needs of the business. This personalised strategy assists small firms in obtaining loans for business and financing as needed.
Favourable Interest Rates: The MSME industry is hampered by high lending rates. SIDBI makes it simple for businesses to obtain working capital loans by offering low-interest rates. SIDBI is able to maintain low-interest rates because of partnerships with a range of international financial organisations.
SIDBI Loan Without Collateral: Banks typically provide business loans in exchange for collateral. SIDBI, on the other hand, offers business loans without collateral to its borrowers, and MSMEs can borrow up to Rs. 1 crore without having to present collateral.
Subsidies from the government: Whenever the government chooses to subsidise MSMEs, SIDBI provides such business loans and working capital business loan programmes to entrepreneurs at a lower rate of interest than typical and with simple terms and conditions. You can use the business loan EMI calculator online to check the monthly interests/EMIs you need to pay on your business loans.
Procedure Transparency: SIDBI’s loan application and approval processes are straightforward, with no added charges. Interest rates and other costs are disclosed to lenders in advance to ensure a high degree of transparency in the lending process.
Particular Assistance: SIDBI bank offers loans to MSMEs through several SIDBI programs and aids fledgling enterprises and entrepreneurs by giving essential business insights and coaching. During the MSME business loan application process, their managers assist company owners in making the best selections.
There is no tampering with company ownership: To get financing for their firm, business owners may have to give up a portion of their shareholding. SIDBI protects business owners’ interests by providing financing and loans without impacting the ownership of the company.

Conclusion

Consumers can request business loans and financial help on SIDBI’s website. A business owner may ask for a loan via the online application procedure with only a few clicks. A person must first enroll on the SIDBI official site with login details and then pick the plan and loan amount required. Finally, personal information must be entered to finish the online application. SIDBI personnel give business loans to MSMEs after assessing the application and fulfilling the requirements. This monetary institution’s loans and credit play a significant part in the nation’s progress and development of this industry.

FAQs

Q 1 What is the full form of SIDBI and when it was Established?

The full form of SIDBI is Small Industries Development Bank of India. It is a financial institution established in 1990 under an act of parliament, and its primary aim is to promote, finance, and develop the micro, small, and medium enterprise (MSME) sector in the country.

Q 2: Does SIDBI evaluate a micro business’s credit record when providing an MSME loan?

Ans: The SIDBI institution does not accept loans based on the credit record of the small businessmen. Its principal goal is to provide financial assistance to small company units so that they may expand their operations without limits.

Q 3: What papers do I need to apply for a business loan with SIDBI?

Ans: Entrepreneurs must produce address proof, identification evidence, an Aadhaar card, a pan card, and other business-related documentation.

Q 4: Who is eligible to apply for a SIDBI loan?

Ans: A micro, small, or medium firm in India can apply for a direct loan from SIDBI. The agency offers a variety of appealing financing packages to both new and experienced business owners.

Q. 5 Does SIDBI provide MUDRA loans?

Ans: The Micro Units Development and Refinance Agency (MUDRA) is a SIDBI subsidiary that funds banks and NBFCs to lend to micro units under the Pradhan Mantri Mudra Yojana (PMMY) scheme. The primary objective of MUDRA is to offer loans of up to Rs. 10 lakhs to micro-enterprises operating in the manufacturing, trading, and service sectors. The scheme is further categorised into three loans: Shishu, Kishore, and Tarun.

Q. 6 What types of loans does SIDBI provide?

Ans: SIDBI offers a range of loan products tailored to the specific needs of MSMEs. This includes term loans for fixed asset acquisition, working capital finance, equipment finance, technology upgradation loans, and loans for export-oriented units. The bank also provides loans for startups and innovative ventures.

Q. 7 What are the subsidiaries of SIDBI?

Ans. SIDBI’s most important subsidiaries are:

Micro Units Development and Refinance Agency (MUDRA Bank)
India SME Technology Services Limited (ISTSL)
India SME Asset Reconstruction Company (ISARC)
Acuité Ratings and Research Limited
Receivables Exchange of India Limited (RXIL)
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Q. 8 Is SIDBI regulated?

Ans. The Reserve Bank of India (RBI) regulates SIDBI to ensure it complies with the regulatory guidelines and norms in the financial sector.

Q. 9 Can SIDBI help MSMEs with debt restructuring or rehabilitation?

Ans. Yes, SIDBI provides support for debt restructuring and rehabilitation of MSMEs. It offers schemes and initiatives to help such firms overcome financial difficulties and revive their businesses.

Q. 10 What is the interest rate charged by SIDBI for its financial products?

Ans. The interest rates offered by SIDBI may vary based on the scheme and prevailing market conditions. These rates are typically competitive and conducive to the needs of small businesses.

Q. 11 How do I get more information about SIDBI loan schemes?

Ans. For more information about SIDBI loan schemes, you can visit the bank’s official website, which provides detailed information about various loan schemes, eligibility criteria, and application procedures. You can also get information through your local SIDBI office.

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RoDTEP Scheme – Benefits and Eligibility

admin — Fri, 07 Jul 2023 09:27:00 +0000

What is RoDTEP?

RoDTEP, full form Remission of Duties and Taxes on Export Products, is an export promotion scheme by the government of India. The scheme became effective from January 1 2021 and aims to offset taxes and duties incurred on exported goods. It helps in reducing the input cost of exported goods, thereby ensuring goods made in India are competitive.

The RoDTEP scheme offers rebates on all central, state, and local duties/taxes/levies on exported goods. This covers both direct and indirect costs borne by the exporters and cumulative indirect taxes at prior stages of production. The objective is to compensate for the duties/taxes/levies on goods and services used in the production and distribution of exported goods.

Objectives of RoDTEP

The objectives of the RoDTEP scheme are as follows:

Neutralise taxes and duties on exported goods
Provide relief to exporters by reimbursing the costs of hidden taxes and duties
Reduce the burden of input costs on exporters, thereby making India-made products and services more competitive internationally
Promote, support, and encourage export activities in India by reducing the cost of exports
Facilitate economic growth by reducing the tax burden on exporters.

Features of the RoDTEP Scheme

The features of the RoDTEP scheme are as follows:

Refund of Embedded Duties and Taxes
The scheme actively promotes the export of goods and services exclusively. Earlier, exporters included taxes and duties as input costs and passed them on to their international buyers. Through RoDTEP, exporters can claim refunds and lower their selling prices. Some of the common taxes and duties for which rebates are available are:
1. Duties on the purchase of electricity
2. VAT and excise duty on fuel used on transportation cost for diesel generator (DG) sets and power plants
3. Stamp duty on export documents
4. Property tax/municipal tax/mandi tax.
WTO Compliance
RoDTEP is a policy compliant with World Trade Organization (WTO) guidelines and is designed to assist exporters in meeting international standards. The scheme enables exporters to enhance their goods’ cost competitiveness in the global market. By providing assured duty benefits, it supports exporters in offsetting taxes and making their products more attractive to international buyers.
Multi-Sector Strategy
The scheme ensures uniformity across all sectors. However, certain sectors like steel, pharmaceuticals, and organic and inorganic chemicals are excluded at present from the benefits provided.
Digitalisation and Transparency
The RoDTEP scheme emphasises digitalisation and transparency in the application and processing of rebates. It aims to simplify the procedures by leveraging technology and ensuring quick disbursal of benefits to exporters.
Complementary to Other Schemes
The scheme is complementary to existing export promotion schemes such as the Merchandise Exports from India Scheme (MEIS). It provides an additional benefit by covering taxes and duties not addressed by other schemes.

These features collectively make the RoDTEP scheme a comprehensive mechanism for compensating exporters for the taxes and duties incurred on exported goods, thereby supporting and encouraging export activities in India.

Eligibility for the RoDTEP Scheme

Here are the key eligibility criteria for the scheme:

Most sectors, including textiles, can enjoy the benefits provided, with the exception of certain industries such as steel, pharmaceuticals, and organic and inorganic chemicals.
The scheme will give priority to labour-intensive sectors that already receive benefits under the MEIS.
Both manufacturer exporters and merchant exporters (traders) are eligible for the scheme.
There is no specific turnover threshold required to claim the RoDTEP scheme benefits.
Re-exported products are not eligible for benefits under the scheme; only products of Indian origin are eligible.
Special economic zone (SEZ) units and export-oriented units (EOUs) are eligible for the benefits.
The scheme also applies to goods exported via courier through e-commerce platforms.

Exporters need to meet these eligibility criteria and adhere to the guidelines provided by the government and the relevant authorities to enjoy the benefits of this scheme.

Sectors Ineligible for RoDTEP

The following categories of exports/exporters are not eligible for rebate under this export promotion scheme:

Export of imported goods meant for re-export
Trans-shipment exports, where the goods originate in a third country but pass through India
Export products that are subject to a minimum export price or export duty
Supplies of products from domestic tariff area (DTA) units to SEZ and free trade warehousing zone (FTWZ) units
Products manufactured in electronic hardware technology parks (EHTPs) and biotechnology parks (BTP)
Products manufactured or exported by units licenced as 100% EOUs
Goods that have been put to use after manufacture.

Importance of the RoDTEP Scheme in India

The government introduced this scheme to address various needs and challenges faced by exporters in the country. The key needs for implementing this scheme are as follows:

Boost Export Competitiveness: The scheme aims to enhance the competitiveness of Indian exports in the global market. Reducing the embedded taxes and duties on exported goods helps exporters offer their products at more competitive prices.
Neutralise Unrefunded Taxes: Previously, various taxes and duties applied on exported goods, which led to an increase in costs for exporters. The RoDTEP scheme neutralises these unrefunded taxes and levies, thus ensuring a level playing field for Indian exporters.
Address Hidden Taxes and Duties: The previous embedded taxes and duties in exported goods stemmed from various central, state, and local bodies, which led to hikes in costs. This scheme targets these hidden taxes and aims to provide relief to exporters by refunding or remitting them.
Support Cash Flow for Exporters: In the past, exporters often faced challenges in terms of blocked working capital due to the unavailability of timely refunds on taxes and duties. The RoDTEP scheme helps in addressing this issue by providing assured duty benefits and improving cash flow for exporters.
Promote Export-led Growth: The government’s objective is to promote export-led growth as a driver of the economy. By reducing the burden of taxes and levies, this scheme incentivises exporters and encourages them to expand their export activities, contributing to economic growth and employment generation.
Align with International Trade Standards: RoDTEP helps Indian exporters meet international trade standards by making their goods cost-competitive in the global market. It aims to align India’s export policies with international norms, enhancing the country’s export performance.

Overall, the RoDTEP scheme addresses the needs of exporters, promotes export competitiveness, supports cash flow, and contributes to the growth of India’s export sector while aligning with global trade standards.

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Conclusion

The RoDTEP scheme has emerged as a significant policy initiative in India, aiming to boost export competitiveness and provide much-needed relief to exporters. By refunding or remitting unrefunded taxes and duties on exported goods, the scheme promotes a level playing field and enhances the country’s export potential. Its inclusive nature, covering a wide range of various sectors and industries, reflects the government’s commitment to supporting a variety of exporters.

However, it is essential for exporters to understand the eligibility criteria and comply with the scheme’s guidelines to fully benefit from it.

Frequently Asked Questions (FAQs)

Q. 1 What is the full form of RoDTEP?
Ans: The full form of RoDTEP is the Remission of Duties and Taxes on Export Products.

Q. 2 Which goods and services are eligible for benefits under RoDTEP?
Ans: This scheme actively extends its benefits to most goods and services exported from India, except in certain ineligible sectors.

Q. 3 Which sectors are currently excluded from the benefits of the RoDTEP scheme?
Ans: Sectors such as steel, pharmaceuticals, and organic and inorganic chemicals, are currently excluded from the benefits of this scheme.

Q. 4 Are re-exported products eligible for benefits under the RoDTEP scheme?
Ans: No, re-exported products are not eligible for benefits under this scheme. All of the applicable exported products and services must originate in India.

Q. 5 Does the RoDTEP scheme comply with WTO regulations?
Ans: Yes, this scheme is compliant with World Trade Organization (WTO) regulations.

Q. 6 How does the RoDTEP scheme support exporters?
Ans: This scheme supports exporters by providing assured duty benefits, neutralising unrefunded taxes, and improving cash flow.

Q. 7 What is the RoDTEP scheme?
Ans: RoDTEP (full form: Remission of Duties or Taxes on Export Products) is an Indian government initiative that aims to refund unrefunded taxes and duties on exported goods, thus enhancing the country’s export competitiveness.

Q. 8 When was the RoDTEP scheme introduced?
Ans: The government of India introduced this scheme in 2021. It became effective on January 1 2021 and is valid until 2025.

Q. 9 Can RoDTEP and MEIS benefits be claimed simultaneously?
Ans: No, it is not possible to claim RoDTEP and Merchandise Exports from India Scheme (MEIS) benefits simultaneously.

Q. 10 Can there be a remission of arrears from one financial year to the other under RoDTEP?
Ans: This scheme actively prohibits the carrying over of remission of arrears or contingent liabilities to the next financial year.

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PLI Scheme in the Textile Industry – A Guide

admin — Mon, 03 Jul 2023 08:44:00 +0000

Introduction

Food, shelter, and clothing are the basic needs of human beings in society. In India, with the second-largest population globally, employment opportunities for the masses are paramount. The textile sector is one such sector that can provide employment opportunities to both skilled and unskilled workforce.

This is because the textile sector is labour-intensive. Presently, it provides employment opportunities to about four crores, fifty lakh people. It is the second-largest sector in employment creation, with the agriculture sector being the first one. In addition, India has a rich heritage with regard to textiles, fabrics, and apparel from ancient times.

Hence, to promote the textiles sector and other sectors, the Union government has started the Production Linked Incentive (PLI) scheme for textiles. This scheme would be operational for nine and half years (24/09/2021 to 3/03/2030), and incentives would be payable to selected companies for five years.

PLI Incentive Updates

In recent updates, production-linked incentive (PLI) schemes have demonstrated remarkable outcomes in India, including increased production, job creation, and exports. These schemes have attracted a whopping 76% rise in foreign direct investment (FDI) in the manufacturing sector, reaching $21.34bn in 2021-22. With an incentive outlay of around $26bn (Rs. 1.97 lakh crores), PLI schemes are here to stay to boost production capabilities and create global champions in 14 sectors.

With 733 approved applications in these 14 sectors and an expected investment of Rs. 3.65 lakh crores, PLI schemes have already realised an actual investment of Rs. 62,500 crores. This has led to a remarkable boost in production and sales, exceeding Rs. 6.75 lakh crores, as well as the creation of around 325,000 jobs by March 2023.

For example, one PLI scheme has successfully convinced major smartphone companies to relocate their suppliers to India. Within a mere three years, India has achieved a significant value addition of 20% in mobile manufacturing, outperforming Vietnam’s 18% achieved over 15 years and China’s 49% achieved over 25 years.

November 2020

PLI schemes rolled out in the following sectors in November 2020:

Sector	Overseeing Department
Prescription Medications	Department of Pharmaceuticals
Technology or Electronic Products	Ministry of Information and Electronics Technology
Networking and Telecom Products	Department of Telecommunications
Food Products	Ministry of Food Processing Industries
ACS and LED (White Goods)	Department for Promotion of Industry and Internal Trade
Energy-Efficient Solar PV Modules	Ministry of New and Renewable Energy
Auto Components and Automobiles	Department of Heavy Industry
ACC (Advance Chemistry Cell) Battery	Department of Heavy Industry
Specialty Steel	Ministry of Steel
MMF Segment and Technical Textiles	Ministry of Textiles

PLI schemes rolled out in the following sectors in March 2020:

March 2020

Sectors	Overseeing Departments
Drug Intermediates (DIs), Key Starting Materials (KSM) and Active Pharmaceutical Ingredients (APIs)	Department of Pharmaceuticals
Electronics Manufacturing on a Large Scale	Ministry of Electronics and Information Technology
Medicinal Devices Manufacturing	Department of Pharmaceuticals

Read on to discover the incredible benefits and potential of PLI incentives as well as their significance.

Objectives of PLI Schemes

PLI schemes are transformative and work towards enhancing India’s compliance with World Trade Organization (WTO) commitments and promoting a non-discriminatory and neutral environment for domestic sales and exports.
The schemes provide active support to food manufacturing companies that meet the eligibility criteria, enabling them to expand their processing capacities, establish strong brands abroad, and become global champions in their industry.
By strengthening Indian food product brands, PLI schemes aim to enhance their global visibility and acceptance, resulting in increased employment opportunities beyond farming.
These schemes safeguard farmers’ income by ensuring fair and lucrative prices for agricultural products.

Salient Features of PLI Schemes

These initiatives help bring back ancient designs and customs, empowering neglected traditions in the country.
Increased production under PLI schemes drives growth and development in various sectors.
Focus on manpower and creativity fosters adaptable building systems that help combat climate change and potentially reverse its effects.
Through PLI schemes, the government encourages investment in plants and machinery to meet specified requirements during the first two years of operation.
A significant allocation of Rs. 10,900 crores in the central sector is available for investment.
The schemes provide incentives for production in essential food categories such as ready-to-eat foods, millet-based products, processed fruits and vegetables, seafood products, and mozzarella cheese.
The duration of the PLI schemes spans six years, from 2021-22 to 2026-27, revolutionising industries and creating opportunities for all.
These schemes cover small businesses that create innovative and organic products like free-range eggs, poultry meat, and egg products.
Entities specialising in innovative and organic products are exempt from the minimum sales and mandatory investment requirements.
PLI initiatives provide support for branding, marketing, and grants for signage, shelf space, and international marketing, with the overarching aim of promoting the development of strong Indian brands globally.

Targets and Strategies for Implementation Under PLI Schemes

PLI schemes are implemented nationwide, incorporating specific goals and strategies.
Specific project management agencies (PMAs) are responsible for implementing these initiatives. They will evaluate applications, verify eligibility, and process incentive payments.
PLI incentives will be available over six years, ending in 2026-27. The following year will see incentive payments being made annually.
A set fund limit ensures controlled costs for these schemes. Each beneficiary will have a maximum incentive predetermined, which they cannot exceed regardless of their performance.
The PLI programme aims to expand processing capacity by 2026-27, resulting in the production of processed foods worth a total of Rs. 33,494 crores and creating job opportunities for around 2.5 lakh people.

Methodology and Mechanisms Associated with PLI Administration and Implementation

To enjoy the maximum benefits of PLI, there is some important information that you should keep in mind:

The cabinet secretary chairs the Empowered Group of Secretaries at the Centre, ensuring effective monitoring of these schemes.
An Inter-Ministerial Approval Committee (IMAC) will assess the eligibility of applicants and determine their approval for the schemes. IMAC will also decide on the sanction and release of PLI incentive funds.
The ministry will diligently develop an annual action plan encompassing a wide range of activities to propel these initiatives forward.
There is a comprehensive third-party evaluation process and a mid-term evaluation mechanism to ensure transparency and accountability in PLI schemes.

What is the PLI Roadmap to boost Indian manufacturing?

The Central Government has sanctioned an ambitious PLI scheme for fourteen key sectors of the economy. These sectors include pharmaceuticals, electronics, food products, textiles, etc. This scheme offers a type of subsidy to the concerned sector so that it can overcome any disadvantage faced by it. Here, incentives are offered to the Indian manufacturers when they achieve incremental sales. Incremental sales boost manufacturing in the country and create employment opportunities. It also promotes the Atma Nirbhar Bharat mission of the government. Under the PLI scheme, the government sanctions a given amount of money directly from the Union budget to a given sector.

Purpose of PLI Scheme

The PLI scheme was started to increase the scale of the domestic manufacturing industry so that imports are reduced and employment opportunities are promoted. With the PLI scheme, the government intends to bring about women’s empowerment and enhance the contribution of women to the general economy of the workforce.

Who launched the PLI scheme for textiles and other sectors?

NITI Aayog started working on developing a set of objective criteria. It involved determining value addition done by the companies which benefited from the financial rewards announced under PLI schemes. Union Finance Minister, Smt. Nirmala Sitharaman announced allocating Rs. 1.97 lakh crores for the PLI Scheme, covering fourteen key sectors. The aim is to make India a manufacturing hub, increase production to 30 lakh crore in the next five years, and generate employment opportunities.

Who can apply for the PLI scheme for the textile sector?

This scheme can be availed by any person (including company/firm/limited liability partnership/trust) who intends to start a separate manufacturing company and make a minimum investment of Rs. 300 crore for producing notified products. Incentives would be provided to companies that achieve a minimum turnover of Rs. 600 crore through manufacturing and selling such notified products in the first performance year. Before investing the required amount, each participant needs to incorporate a new company under the Companies Act, 2013.

Incentives Under PLI Scheme for Textile Sector

Incentives would be provided to the participants who achieve minimum investment and incremental turnover as specified in the scheme. The participants need to achieve the prescribed turnover target for the year and a 25% increase in turnover over the immediately preceding year’s turnover in the succeeding years. The formula for computing the incentives is as follows:

“Net Incremental Sales within the cap of Notified Product(s) excluding taxes multiplied by the Rate of Incentive in percentage for the Performance Year.”

What is the PLI Roadmap for the Textiles Industry?

Under the PLI roadmap for the textile sector, the Union government has approved 61 applications from companies. The selected applicants may bring in an investment of Rs. 19,000 crores. Out of 61 applications approved, seven are foreign companies. This potential investment under the PLI roadmap is expected to generate a turnover of Rs. 184,917 crore and employment for 2,40,134 people. The financial outlay of the government under this scheme is Rs. 10,683 crores for five years. This outlay would be applicable to give a boost to textile products such as Man Made Fabric (MMF) apparel, MMF fabrics (14 categories), and products related to technical textiles (10 categories).

The items covered under MMF fabrics include woven fabrics with nylon, polyester, and others. Technical textiles included under the scheme are defence textiles (bulletproof vests, clothing, and tents used in submarine and fighter aircraft, safety airbags, tyre cords, protective clothing such as personal protective equipment, and fabrics and clothing used against fire accidents).

Investment, Turnover, and Incentives

The applicants selected under the PLI scheme need to demonstrate the following in Part I and Part II of the scheme’s implementation:

In Part I, they are expected to invest a minimum of Rs. 300 crore and generate a minimum turnover of Rs. 600 crore. The investment would be in the plant, machinery, R&D activities, and civil works but exclude investment in land and administrative buildings.
In Part II, a minimum investment of Rs. 100 crore is required, and a minimum turnover of Rs. 200 crores. The investments would go to inspirational districts, rural areas, and Tier 2 and Tier 3 towns.

For Part I, the available incentives start from 15% for the first year, decreasing by one percentage point every year for the next four years. For Part II, the incentives start from 11% for the first year, decreasing by one percentage point every year for the next four years. For both Part I and Part II, the incentives are available only on the incremental turnover of 25%. Let us understand by an example. Let in the first year the prescribed turnover be Rs. 600 crore. Then in the second year, the prescribed turnover should be Rs. 750 crore (i.e.Rs. 600 crore + 25% of Rs. 600 crore). In the first year, the incentive is computed on Rs. 600 crores, and in the second year, the incentive is credited only on Rs. 150 crores (i.e., 25% increment on the first year’s turnover of Rs. 600 crores). This procedure continues for the five-year period.

Aims of Textile PLI Scheme

Following are the aims of this PLI scheme for the textile sector:

Through the incentives given by this scheme, textile companies operating in India and also textile workers can compete with the Chinese textile mills and undertake productive ancillary activities.
According to the commerce ministry, there is a huge demand for Indian textiles in the international markets. This PLI scheme for the textile sector intends to grab the demand by acquiring skills related to the design of MMF and garments.
Government support through this PLI scheme for the textile sector and the artisans working in this domain would create a ripple effect in other areas of the economy.
This specific textile PLI scheme is expected to increase textile parks in India. Thus, in 10 years, India may become the textile hub of the world.
The textile company management can use the grants received under the PLI for the textile sector to automate the textile factories. This would bring in economies of scale.

Sector-Wise PLI Eligibility Criteria

PLI eligibility varies based on the approved industry. Here are some of the criteria:

Telecom units need to meet investment growth and manufacturing sales requirements.
MSME companies can receive investments of up to Rs. 10 crores, while other companies can receive investments of up to Rs.100 crores.
SMEs and other companies must have at least 50% of their subsidiaries compliant with food processing regulations.
SME selection considers factors such as the firm’s proposal, product innovation, and level of product development.
Pharmaceutical businesses must undertake greenfield projects and maintain a net worth of at least 30% of total investments.
Domestic value addition (DVA) requirements stand at about 90% for fermentation-based products and at least 70% for chemical syntheses.

PLI Scheme Contribution towards Employment Generation

Since the creation of these schemes, India’s processing capacity has continued to expand, resulting in a substantial processed/ready-to-eat food output of Rs. 33,494 crores. Furthermore, these initiatives will pave the way for the creation of employment opportunities for nearly 2.5 lakh individuals by the year 2026-27.

PLI Schemes and Custom Duty

These schemes actively reduce customs duty, to the benefit of certain industries including raw material importers in the textile industry, as well as the shipping sector. The reduction in customs duty positively impacts shipping costs and ensures the long-term viability of central public sector industries. The PLI schemes also improve logistics and infrastructure related to railways, shipping, and highways. In this regard, the government has allocated Rs. 15,700 crores for the establishment of new shipping lines.

PLI schemes have also resulted in the re-evaluation of 400 customs duty exemptions and concessions. In addition, the announcement of Manufacturing and Other Operations in Warehouse Regulations (MOOWR) enables considerable duty savings for eligible companies.

India’s Textile and Apparel Exports from 2018 to 2022

Here is the data on India’s textile and apparel exports from fiscal year (FY) 2018 to FY 2022:

Commodity	2017-18	2018-19	2019-20	2020-21	2021-22
Textile and apparel (including handicrafts)	$37.55bn	$38.40bn	$35.18bn	$31.59bn	$44.44bn

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Conclusions

The Textile and garment sector is the backbone of the fashion industry. With its wide variety of clothing and fabrics, India can become the global leader in this sector. This PLI scheme for textiles and other related areas can go a long way in helping this sector. It has laid out a unique PLI roadmap to achieve its true potential in terms of exports. In a nutshell, the textile sector can carve out a niche in international trade and commerce.

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PM SVANidhi Scheme’s Key Features and Benefits

admin — Sat, 01 Jul 2023 16:05:00 +0000

Latest news updates about PM SVANidhi Yojana

June 29, 2023: The PM SVANidhi Yojana, which the government of India launched in 2020, has now been extended until December 2024. The Brihanmumbai Municipal Corporation (BMC) has urged street vendors who have not yet taken advantage of the scheme to get in touch with their local ward office. As of now, the civic body has provided loans of Rs. 10,000 each to 90,000 hawkers as part of this initiative.
June 28, 2023: During a review of the PM SVANidhi scheme, Prime Minister Narendra Modi called upon the state governments to actively identify and include all eligible street vendors in urban areas, particularly in Tier II and Tier III cities. He emphasised the need for a focused and comprehensive drive to promote digital transactions among these vendors under the PM Street Vendor scheme.
The prime minister also directed the chief secretaries of various states to ensure that the family members of the scheme’s beneficiaries receive the benefits of other government schemes through the SVANidhi se Samriddhi campaign.
June 12, 2023: According to data provided by the Union Ministry of Housing and Urban Affairs, out of the total beneficiaries (36.33 lakhs) under the PM SVANidhi Yojana, 21.31 lakh vendors are men, 15.02 lakh are women, and 219 beneficiaries are from the ‘others’ gender category.
Notably, in 10 states and Union territories, predominantly in the Southern and Northeast regions, women represent the majority of the beneficiaries. Andhra Pradesh has 70% women beneficiaries, Telangana has 66%, Tamil Nadu has 64%, and Karnataka has 50%. The cumulative number of women beneficiaries in Andhra Pradesh, Telangana, Tamil Nadu, and Karnataka amounts to 5,80,956, which is nearly 39% of the total 15,02,597 women beneficiaries of the scheme nationwide.
June 02, 2023: Minister for Housing and Urban Affairs Hardeep Singh Puri recently commended the PM Street Vendor’s AtmaNirbhar Nidhi scheme for reaching a significant milestone of three years. Within this short span, the scheme has successfully provided microcredit to over 3.6 million street vendors across the nation.
By June 30, 2023, AtmaNirbhar Nidhi had disbursed more than 4.64 million loans, totaling a cumulative amount of Rs. 5,795 crores. This noteworthy accomplishment highlights the substantial impact of the scheme in empowering the livelihoods of these vendors.
June 01, 2023: Minister for Housing and Urban Affairs Hardeep Singh Puri has launched a mobile app for the PM SVANidhi Yojana, aimed at simplifying the loan application process and providing street vendors with information about the scheme.
During an event in New Delhi, the minister praised the street vendor scheme on its completion of three years and highlighted that it has been one of the fastest-implemented government initiatives, leading to remarkable financial inclusion and digital literacy in the country’s cities and towns. Puri added that the scheme is playing a crucial role in providing street vendors with dignity, stability, and economic opportunities.

Introduction to PM SVANidhi Yojana

Through the foundation of the ‘Make in India’ movement in 2014, the Indian government firmly set out on a journey to promote business, entrepreneurship, and self-sufficiency among the country’s public. Since then, the authorities have taken several steps to provide the public with financial as well as technical resources to help them realise this vision.

Schemes like the Pradhan Mantri Employment Generation Programme (PMEGP), Pradhan Mantri MUDRA Yojana (PMMY), and several others are making business and trade easier for India’s young, budding economy.

The PM SVANidhi Yojana is another such step in the direction of empowering the economy by providing finances for one of its most integral components: street vendors, also known as vendors or hawkers, and colloquially as thelewalas, rehriwalas, and theliphadwalas. Despite their apparent insignificance and hard working conditions, street vendors make up a massive part of almost any Indian market.

These individuals play a crucial role in ensuring that essential goods and services are readily available to urban residents at affordable prices, and conveniently accessible right at their doorsteps. Through SVANidhi Yojana, the government aims to help them grow and develop by offering suitable credit facilities.

What is PM SVANidhi Yojana?

The PM SVANidhi scheme, also known as the PM Street Vendor’s Atma Nirbhar Nidhi (SVANidhi) Scheme, is an initiative launched by the government of India. The primary objective of this initiative is to formalise the business structure for street vendors and provide them with access to financial resources to enhance their livelihoods.

The government aims to empower these individuals by offering them working capital loans and promoting their economic independence. The PM SVANidhi Yojana also encourages timely loan repayments by offering enhanced loan limits for eligible vendors in subsequent loan cycles.

Features of PM SVANidhi Yojana

The PM Street Vendor scheme has several notable features:

Collateral-free loans: Street vendors can avail of collateral-free working capital loans of up to Rs. 10,000. These loans allow them to meet their immediate business needs without having to pledge assets as security.
Digital payments: The scheme promotes digital transactions by incentivising street vendors to adopt digital payment systems. It provides eligible individuals with a monthly cashback of ₹100 on making digital transactions using prescribed digital payment platforms. Vendors can also complete the registration and application for the PM SVANidhi Yojana online, which further promotes digitisation.
Interest subsidies: Vendors who repay their loans on time are eligible for an interest subsidy of 7%. This reduces the financial burden and incentivises timely repayments.
Loan tenure: Street vendor loans provided under the scheme have a tenure of one year and vendors have the flexibility to repay the amount in monthly instalments or as a single payment at the end of the tenure.
ID cards: The PM SVANidhi Yojana facilitates the issuance of physical or digital identification cards for street vendors. This helps in formalising their status as recognised vendors and provides them with various benefits and protections.
Insurance coverage: The scheme provides hawkers with access to affordable accident insurance coverage of Rs. 10,000. This offers them a safety net in case of unforeseen accidents or mishaps.
Skill development: The PM SVANidhi Yojana focuses on empowering street vendors by providing skill development and capacity-building training. This enhances their entrepreneurial abilities, financial literacy, and business management skills.
Integration with other schemes: The scheme aims to integrate street vendors with other government initiatives. This includes linking them to social security schemes, health insurance programmes, and other welfare benefits.
Nodal agencies: Various nodal agencies implement the PM SVANidhi Yojana at the national, state, and municipal levels. These agencies are responsible for facilitating the loan application process, conducting surveys, and providing support to street vendors.

Objectives of PM SVANidhi Yojana

The PM SVANidhi scheme aims to bring about positive change in the lives of street vendors, promote their economic growth, and integrate them into the formal economy. It does so through these objectives:

Financial inclusion: The scheme aims to provide access to formal credit facilities for street vendors who are typically excluded from the formal financial system. It enables them to avail of street vendor loans to meet their business needs.
Poverty alleviation: By extending financial support to street vendors, PM SVANidhi Yojana aims to uplift their economic status and contribute to poverty reduction. It empowers them to enhance their income and improve their standard of living.
Formalisation: The scheme aims to formalise the street vending sector by providing vendor identification cards and promoting compliance with regulations. This helps in recognising street vendors as legitimate businesses and provides them with access to various government schemes and services.
Skill development: PM SVANidhi Yojana focuses on providing skill development and capacity-building training to the country’s hawkers. It aims to enhance their entrepreneurial abilities, financial literacy, and business management skills, enabling them to operate more effectively.
Digitalisation: The scheme encourages vendors to adopt digital payment systems, promoting a cashless economy and facilitating transparent transactions. It aims to create awareness and facilitate the use of digital platforms for financial transactions among street vendors and their customers.
Social security: PM SVANidhi Yojana aims to provide social security coverage to street vendors by offering access to affordable healthcare, pension schemes, and other welfare benefits. This helps in improving their overall wellbeing and providing a safety net in times of need.
Empowerment of women: The scheme gives special emphasis to women street vendors and aims to empower them by providing equal opportunities and support for their entrepreneurial endeavours.

Eligibility criteria for the PM SVANidhi Yojana

Vendors will need to meet the following eligibility criteria to qualify for this scheme:

Date: PM SVANidhi Yojana is specifically designed for street vendors – including hawkers, small shop owners, cart vendors, and mobile vendors – engaged in vending activities as of or before March 24, 2020.
Vendor certification: Hawkers should possess valid identification proof issued by the concerned urban local body (ULB) or town vending committee (TVC). This certification serves as proof of their vending activity and is a prerequisite for availing of the benefits of the scheme.
Age limit: There is no specific age limit for availing of the benefits of the PM Street Vendor scheme. Hawkers of all age groups can apply provided they meet the other eligibility criteria.
Aadhaar number: Vendors need to possess a valid Aadhaar card for identification purposes and to establish their identity during the application process.
Business Location: Vendors should have a permanent vending stall or cart in a designated vending zone or area identified by the respective ULB or TVC. The scheme primarily targets vendors operating in urban and semi-urban areas.
Loan default: Vendors who have not previously defaulted on funding provided by banks or financial institutions can apply for the scheme’s street vendor loan.

Subsidies provided by the PM SVANidhi Yojana

The subsidy rates are as follows:

Interest subsidy: The PM Street Vendor scheme provides an interest subsidy at a rate of 7% per annum on working capital loans given to vendors. The subsidy operates on a reducing balance basis.
Digital literacy: Street vendors who repay their loans on time are eligible for an additional subsidy of 1% per annum. This encourages and incentivises digital transactions, thereby promoting financial inclusion among street vendors.

It is important to note that the subsidy rates mentioned above are subject to change as per the guidelines and updates provided by the Ministry of Housing and Urban Affairs, which oversees the implementation of the scheme.

Interest rate on street vendor loans

Under the PM SVANidhi Yojana, the lending institutions involved determine the rates of interest on the loans provided to street vendors. These institutions may include banks, microfinance institutions, cooperative credit societies, and more. The guidelines for the interest rate are as follows:

Banks: Scheduled commercial banks, regional rural banks (RRBs), small finance banks (SFBs), cooperative banks, and self-help group (SHG) lenders will follow their prevailing interest rates.
Other institutions: Non-banking financial companies (NBFCs), NBFC microfinance institutions (MFIs), and other lender categories not covered under Reserve Bank of India (RBI) guidelines will adhere to RBI guidelines for NBFC-MFIs.

PM SVANidhi Yojana Pre-Application Procedure

The procedures outlined here will guarantee that you are prepared to begin the registration procedure on the site.

1. Look for your name on the vendor survey list and make a note of your Survey Reference Number (SRN).
2. Carry a copy of the coefficient of variation (COV) or identification card on hand for uploading throughout the application procedure.
3. The system will generate a Preliminary COV for you when you submit an online form.
4. Save a copy of the Letter of Recommendation (LOR) for filing.
5. The Vendor must state at least one of the following:
During the pandemic shutdown, the seller got One-Time Assistance. The seller must be a member of a hawkers/vendors organisation.

Pm Svanidhi Yojana Online Registration

Post completion of the aforementioned procedure, you must be able to access the login using your account utilising the PM SVANidhi login method described above. Candidates need to use their cellphone number to begin the PM SVANidhi registration procedure. Other organisations, on the other hand, will have to commence and complete the PM SVANidhi login procedure using a username and password generated for them on the website.

Pm Sannidhi Yojana Apply Online

Step one: Open http://pmsvanidhi.mohua.gov.in/ the official webpage.
Step two: After that, you must obtain the PM SVANidhi Scheme Financing Registration Form.
Step three: Choose the merchant category for which you are eligible.
Step four: Completing the Loan Application Form (LAF). Your Aadhaar must be connected to your cell phone number.
Step five: After completing all of the required information, submit the application form.

How to Check Your PM SVANidhi Application Status

Follow these procedures to verify the status of your application:

Visit the PM SVANidhi webpage at https://pmsvanidhi.mohua.gov.in/.
Select the ‘Street Vendor Survey Search’ tab.
Enter the required information such as State, Certificate of Vending No., Vendor-Id Card Number, Name of Street Vendor, ULB Name, Mobile Number, and Father’s Name/Spouse Name.
Once completed, you may check the progress of your survey by clicking ‘Search.’

Login Procedure for PM SVANidhi

One may only begin the PM SVANidhi authentication and authorization if they have previously applied for the scheme’s incentives as either a creditor or as a beneficiary. After that, the user can proceed with the steps outlined to begin the PM SVANidhi login process:

When you go on the legitimate PM SVANidhi website, click the “Login” icon to begin the PM SVANidhi login procedure.
The next stage in the PM SVANidhi login procedure will ask you to provide the login details you provided when you applied. You can start the procedure as a creditor or as a beneficiary.
Then you will be asked to create an OTP. Press the link that enables you to do that.
You will receive an OTP within moments. Enter it into the empty fields on your laptop screen to complete the PM SVANidhi login procedure. After you’ve gotten over that, you will be able to view the prospects for your part in the policy.

Promotion of digital transactions under the PM SVANidhi Yojana

The PM SVANidhi scheme promotes digital transactions by encouraging street vendors to adopt digital payment methods for their business transactions. The loans and financial assistance the scheme provides can be easily disbursed and repaid through digital platforms.

PM SVANidhi Yojana also offers training and guidance to hawkers on how to use various digital payment systems such as mobile wallets, UPI, and QR codes. By embracing such systems, vendors can attract a wider customer base, including those who prefer cashless payments.

Another benefit of digital transactions is that they enable street vendors to keep track of their sales, expenses, and financial records more efficiently, improving their overall business management. The PM street vendor scheme also encourages vendors to integrate with online marketplaces, expanding their reach and visibility to customers.

All in all, the promotion of digital transactions under this initiative contributes to the government’s vision of a cashless economy and fosters a more efficient and secure business environment for street vendors.

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FAQs

Q. 1 What is PM SVANidhi Yojana?

Ans: The PM SVANidhi Yojana, also known as the PM Street Vendor’s Atma Nirbhar Nidhi (SVANidhi) Scheme, is a government initiative that aims to ensure finance is easily available to street vendors so they can manage and grow their business organically. The scheme also encourages timely repayment habits by offering enhanced loan limits for eligible vendors in subsequent loan cycles.

Q. 2 Who can apply for the PM SVANidhi scheme?

Ans: Street vendors and hawkers engaged in vending articles, goods, wares, food items or merchandise of daily use, or who offer services to the public on a street, footpath or pavement from a temporary built-up structure or by moving from place to place can apply for a street vendor loan under the PM SVANidhi scheme.

Q. 3 Who provides loans under the PM SVANidhi scheme?

Ans: Cooperative banks, non-banking financial corporations, microfinance institutions, scheduled commercial banks, regional rural banks, small finance banks, and self-help groups can offer small credit loans under the PM SVANidhi Yojana.

Q. 4 Is collateral needed for a PM SVANidhi street vendor loan?

Ans: PM SVANidhi street vendor loans are collateral-free, which means you do not need to pledge assets in return for the funding.

Q. 5 How long will loan approval take under the PM Street Vendor scheme?

Ans: Under the PM Street Vendor scheme, loan approval may take up to 30 days depending on the accuracy of the documents. The automated process carried out through the mobile app or website helps vendors check the status of their loan applications in real time.

Q. 6 What amount can I get through an initial working capital loan under the PM street vendor scheme?

Ans: Under the PM street vendor scheme, you can get up to Rs. 10,000 through an initial working capital loan.

Q. 7 What is the rate of interest on a PM SVANidhi street vendor loan?

Ans: The PM SVANidhi scheme has varying interest rates applicable on street vendor loans:

Banks: Scheduled commercial banks, regional rural banks (RRBs), small finance banks (SFBs), cooperative banks, and self-help group (SHG) lenders will follow their prevailing interest rates.

Other institutions: Non-banking financial companies (NBFCs), NBFC microfinance institutions (MFIs), and other lender categories not covered under Reserve Bank of India (RBI) guidelines will adhere to RBI guidelines for NBFC-MFIs.

Q. 8 How can I apply for a PM SVANidhi street vendor loan?

Ans: You can apply for a PM SVANidhi street vendor loan online through the official government website or through the scheme’s mobile app.

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A Guide to the PMEGP Loan Scheme

admin — Sat, 13 May 2023 07:51:00 +0000

What is the PMEGP loan scheme?

The Ministry of Micro, Small and Medium Enterprises (MSMEs) has introduced the Prime Minister’s Employment Generation Programme (PMEGP), a credit-linked subsidy initiative. This programme began on March 31 2008, combining the previous Prime Minister Rozgar Yojana (PMRY) and Rural Employment Generation Programme (REGP).

The programme aims to provide financial assistance to entrepreneurs to set up new micro-enterprises and small businesses or expand existing ones. The Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Board (KVIB), and District Industries Center (DIC) work together to carry out the programme.

The PMEGP strives to create openings for employment in rural and urban areas by supporting entrepreneurship and the expansion of the micro, small, and medium enterprise sector. The programme’s goal is to promote chances for independent work.

If you are an entrepreneur, a PMEGP loan can provide the funding you need to launch a new project.

Features of the PMEGP loan scheme

The key features of the PMEGP scheme are as follows:

Credit-Linked Subsidy: PMEGP is a credit-linked subsidy programme, which implies that beneficiaries receive financial support through loans and subsidies to start new small businesses or grow existing ones.
Subsidy Component: Depending on the project cost and beneficiary type, the PMEGP scheme’s subsidy component might range from 15% to 35%. The government offers the subsidy to reduce the burden of business loan repayment on the recipients.
Eligibility Requirement: People over 18 from economically disadvantaged social groups can apply for the PMEGP scheme. The scheme is open to both rural as well as urban areas.
Priority Sectors: PMEGP prioritises several industries, including those focused on agriculture, food processing, textiles, handicrafts, and other traditional industries. However, the programme includes the service, manufacturing, and trading industries.
Loan Amount: Depending on the project cost, the loan amount offered under the PMEGP scheme ranges from ₹50,000 to ₹25 lakhs. You must provide margin funding equal to at least 10% of the project’s total cost.
Implementation: The scheme operates through various financial organisations like banks and non-banking financial firms (NBFCs), which provide loans to qualifying recipients.
PMEGP Online Application: Prospective beneficiaries can apply online for the PMEGP through the PMEGP portal. The PMEGP application process is simple and can be done through the official website of the Ministry of MSME.
Monitoring: A state-level task force committee and a district-level implementation committee monitor the programme to ensure proper implementation and prompt delivery of loans and subsidies.

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How much subsidy can you get through the PMEGP loan scheme?

Based on the project cost and the recipient category, the PMEGP offers different subsidy amounts. The PMEGP scheme details about the subsidy amount are as follows:

Beneficiary Category	Category Share	Urban Subsidy rate	Rural Subsidy rate
General	10%	15%	25%
Special	5%	25%	35%

You should know that the subsidy only covers a portion of the project’s overall cost; you must make arrangements for the balance through contributions or business loans from financial institutions. Here at FlexiLoans, we can help you gather the necessary funds at competitive interest rates in just a few clicks.

What is a credit-linked subsidy programme for MSMEs?

The programme aims to financially support Micro, Small, and Medium Enterprises (MSMEs) nationwide. The government offers a subsidy on the margin money needed for an entrepreneur to start a project under the PMEGP plan.

The margin money subsidies may make up between 15% and 35% of the total project cost depending on the project’s category and location. You can use an additional MSME loan or such to pay for the remaining cost.

The PMEGP scheme includes all practical economic activities, including agricultural and related activities, manufacturing, the service sector, and informal sector activities. The project’s maximum cost for manufacturing projects is ₹25 lakhs, while for projects in the service industry, it is ₹10 lakhs.

The entrepreneur has two options for applying the PMEGP scheme: either online through the PMEGP e-portal or in person at the district office of the State Khadi and Village Industries Board (KVIB) or KVIC.

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Objectives of PMEGP

The primary goals of PMEGP are:

Promote independent employment initiatives in the country’s urban and rural areas to create employment opportunities.
To provide unemployed youth and educated individuals with long-term and consistent employment.
To improve domestic production of goods and services to support the expansion of the country’s economy.
To promote a spirit of invention and entrepreneurship in the nation’s youth.
To encourage the development of microbusinesses, which will aid in the fair distribution of wealth and income.
To improve the technology and abilities of existing micro-enterprises and small firms to increase their competitiveness.
To support cluster-based business models to promote local and regional development.
To raise the proportion of micro and small-scale businesses in the nation’s overall industrial output and exports.

Overall, the PMEGP aims to foster a culture of entrepreneurship and self-employment among the people of India and provide them with a sustainable source of income and livelihood.

Procedure for PMEGP application

Applying for PMEGP online

The PMEGP loan online application process is as follows:

Before beginning, you must choose a project qualifying for PMEGP financing. On the PMEGP website, you may find a list of eligible industries and activities.
You must prepare a detailed project report (DPR) outlining the proposed business, market potential, financial projections, and other relevant data.
You can then go to the PMEGP online portal / official website at https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp#.
Select ‘online application form for individual’ or ‘online application form for non-individuals’ from the home page.
Fill out the application form with the following information:

Aadhaar number of the applicant
Name of Applicant: exactly as it appears in the Aadhaar Card
To submit the application form (per the streamlined approach), select Agency – KVIC, KVIB, DIC.
Choose State & District from the drop-down menu.
Choose District from the drop-down menu.
Choose Sponsoring Office from the drop-down menu.
Select the Legal Type
Choose your gender and date of birth.
Choose the applicant’s Social Category and Special Category from the drop-down menus.
Qualifications and Contact Information
Select Unit Location (i.e. Rural OR Urban)
Address of the Proposed Unit
Select the type of activity from the drop-down list (i.e. Service or Manufacturing)
Choose an industry from the list and provide the product description.
Details of EDP Training and If EDP Training Undergone enters Training Institute Name in detail.
Required Loan Information
Details of Bank

When you’ve filled out all the required fields, click the Save Applicant Data button to save the details.
After selecting “Save Applicant Data” to complete the application, you must upload the aforementioned files.
After the final submission, your listed phone number will receive an email with the applicant ID and password.

Applying for PMEGP offline

If you wish to apply for the PMEGP loan scheme, follow the steps mentioned below:

Before beginning, you must choose a project qualifying for PMEGP financing. On the PMEGP online portal, you may find a list of eligible industries and activities.
You must prepare a detailed project report (DPR) outlining the proposed business, market potential, financial projections, and other relevant data.
Visit https://mpmsme.gov.in:8080/mpmsmecms/Uploaded%20Document/Documents/1_Application_Form_PMEGP.pdf to get the PMEGP scheme application form.
Provide all the information required, as outlined above.
Next, you must submit the completed full PMEGP application form to the nearest network bank with the DPR and other necessary papers, including identification, proof of address, and documentation of your education.
To determine the viability of the proposed plan, the authorities will examine your PMEGP application and conduct a feasibility study.
If the authorities approve your application, you will receive the training and counselling required to launch your business.
After completing the programme, you can approach the banks to apply for a PMEGP loan.
After obtaining the loan, you will need to start your business and follow the PMEGP scheme guidelines and regulations.

The PMEGP application process consists of several steps, so it’s important to ensure you complete all the requirements and provide all the required paperwork to boost your chances of receiving money for your company.

Subsidy and funding under PMEGP

The Khadi and Village Industries Commission (KVIC) and the District Industries Centre (DIC) are two organisations that the Ministry of Micro, Small, and Medium Enterprises (MSME) uses to carry out the programme. The PMEGP loan scheme offers eligible beneficiaries subsidies and funding to launch their own micro or small businesses.

The subsidy component of the PMEGP scheme forms part of a capital subsidy, which is a percentage of the project cost, depending on the category and location of the project. The subsidy rates in urban areas are 15% for general category beneficiaries and 25% for special category beneficiaries.

Special categories include Scheduled Caste (SC), Scheduled Tribe (ST), Other Backward Class (OBC), Women, Ex-servicemen, and Physically challenged. The subsidy rate in rural areas for all categories of beneficiaries is 25%.

PMEGP loan scheme provides funding in the form of a bank loan granted by the member banks. The loan amount can be up to 90% of the project cost, with the beneficiary contributing a minimum of 10% in the general category and 5% in the special category.

The PMEGP loan interest rate is concessional, less than the going rate in the market. You must be 18 years old and have completed eighth grade to be eligible for a PMEGP loan.

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Eligibility criteria for PMEGP loans

You must fulfil the below criteria to be eligible for a PMEGP loan:

You must be above 18 years of age.
You must have completed eighth grade in school.
The programme is for unemployed people who desire to launch their businesses. Therefore, you must not work in any government or private sector organisation when applying for a loan.
You must be a permanent resident of India.
Your project cost must not exceed ₹25 lakhs in the manufacturing sector and ₹10 lakhs in the service sector.
Self-help groups are eligible for this loan.
- Institutions registered under Societies Registration Act,1860
- Production Co-operative Societies
- Charitable Trusts
Existing units (under PMRY, REGP, or any other plan of the Government of India or State Government) and units that have already received government subsidies under other such programmes are not eligible.

The PMEGP loan is available for setting up new projects in the manufacturing or service sectors or expanding existing ones.

Financial assistance provided by PMEGP loans

The PMEGP loan is a term loan provided to businesses under the PMEGP scheme at a fixed rate and discounts on their overall project cost. Many variables affect the exact details of a PMEGP loan.

The following are some of the more significant specifics about the level of financial help a PMEGP loan provides:

Loan Amount: Based on the industry and total project cost, the Indian government provides the details of PMEGP loan amounts. PMEGP Loan amounts are available for projects in the commercial or service sectors in quantities up to ₹10 lakhs. This loan’s maximum size for manufacturing-related projects is ₹25 lakhs.
Self-investment: A portion of the entrepreneur’s investment is also required under the PMEGP financing programme. This share has a 10% mark for the General category and a 5% mark for the Special category. Thus, if your project falls within the upper limit, the government may approve up to 90% to 95%.
Subsidy (Rural): The programme offers a portion of subsidy or margin money for your project in addition to the PMEGP loan. This subsidy proportion for rural businesses is 35% for the Special category and 25% for the General category.
Subsidy (Urban): Urban businesses receive a 15% general category subsidy and a 25% special category subsidy. Aside from these various factors, all PMEGP loans have standard interest rates of 11% and 12% annually.
Additionally, this loan has a 3 to 7 years repayment period with a six-month moratorium. All PMEGP loans up to ₹10 lakhs are exempt from the requirement for collateral under Reserve Bank of India standards.

You must note that businesses have rising funding and credit needs. You can consider availing of additional credit by applying for loans through other channels and platforms.

Documents required for PMEGP loans

Certain documents must be part of the PMEGP loan application process under the PMEGP Scheme. The following documents are necessary when applying for a loan:

A detailed report on the project highlights financial projections, market analysis, business details, etc.
Completed application form
Passport size photos
Proof of Identity, for, e.g. Aadhar card, PAN card, driving licence, Voter ID, etc.
Address proof, e.g., your electricity bill, telephone bill, property tax receipt, etc.
Proof of educational qualification of the applicant, e.g. mark sheet or degree certificate
Rural Area certificate, if applicable
Cost of project and means of finance.
Scheduled Caste (SC) / Scheduled Tribe (ST) / Other Backward Class (OBC) / Women / Ex-servicemen / Physically challenged certificate, if applicable
Partnership deed, if applicable
Bank account statement for the last six months
Any other documents requested by the lending institution.

You must note that the specific requirements may differ based on the financing institution and the nature of the project.

Ways to apply for a PMEGP loan

The following are the methods for applying for a PMEGP loan:

Online application: You can apply to the PMEGP loan scheme online by logging into the PMEGP e-portal. First, you must create an account on the e-portal and fill in the application form as required. Secondly, you must upload the required documents and apply online. Your PMEGP loan status can also be checked through the online portal.
Offline application: You can also apply to the PMEGP loan scheme offline by downloading the full PMEGP application form from the official website or obtaining it from the District Industries Centre (DIC) or Khadi and Village Industries Commission (KVIC) offices.
Afterwards, you must submit the filled-in application form and the required PMEGP loan documents to the respective DIC or KVIC office.
Common Service Centres (CSC): Additionally, applicants may apply for a PMEGP loan through Common Service Centres (CSC), which are permitted to offer digital services to residents of rural areas.
Khadi and Village Industries Commission (KVIC) website: Applicants can apply for a PMEGP loan through the KVIC website by creating an account and filling out the application form online.

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How to check the status of your PMEGP application

You can follow the instructions below to find out the status of your PMEGP loan application:

Go to https://www.kviconline.gov.in/pmegpeportal/jsp/pmegponline.jsp to access the official PMEGP e-portal.
Click on the “Applicant Track” option from the homepage.
Choose the correct option: “Application status” or “Loan disbursement status”.
Enter the relevant information, such as the application number or acknowledgement number, date of birth or cellphone number, and the security code displayed on the page.
Click on the “Submit” button to get your PMEGP loan status.

It is advisable to monitor the status of your application and follow up with the relevant officials if there are any updates or questions about your PMEGP loan application.

Banks that provide funding through PMEGP

PMEGP enables you to start your own business providing funding. With the help of the PMEGP scheme, many banks and financial institutions in India offer funding. Some of the banks that provide funding through PMEGP as of 2023 are as follows:

IDFC First
Indian Bank
Bank of Baroda
Bank of India
Kotak Mahindra Bank
Canara Bank
Punjab National Bank
Central Bank of India
State Bank of India
HDFC Bank Ltd.
United Commercial Bank (UCO)
ICICI Bank Ltd.
Union Bank of India
Axis Bank

Loan limit under the PMEGP loan scheme

The PMEGP scheme has a loan ceiling that ranges from ₹9.5 lakhs to ₹23.75 lakhs. The upper limit for project costs in the manufacturing industry has been fixed at ₹25 lakhs.

This upper limit has been restricted to ₹10 lakhs in the business or service sector. In all situations, the programme’s beneficiary must contribute 5% to 10% of the total, with the bank covering the remaining 90% to 95%.

However, government subsidies, known as Margin money, range from 15% to 30% of the loan amount. Ultimately, the bank provides a term loan for 60% to 75% of the overall project cost.

Sectors that can avail of a PMEGP loan

The PMEGP scheme offers loans to the following businesses or sectors:

Services and textiles
Handmade fibres and paper
Mineral based products
Agro-based food processing
Forest-based products
Rural engineering
Rural biotech
Polymer-based products
Chemical based products

List of activities allowed under PMEGP

The following possible projects may be eligible for funding through the PMEGP programme:

Cement and allied products
Cold storage
Cold chain solutions
Electronics and electrical equipment
Forest Industry
Paper and allied products
Service sector
Textile and apparel
Agro-based food processing
Chemical, polymers and minerals
Dairy and milk products
Food processing
Horticulture
Organic farming
Plastic and allied products
Small business models
Waste management

List of activities not allowed under PMEGP

The following businesses are among those prohibited under the PMEGP scheme:

Manufacturing or sale of items like beedis, cigars and cigarettes
Tapping of toddy for sale
Cultivation of crops
Floriculture, sericulture or horticulture
Manufacture of polythene bags thinner than 20 microns
Manufacture of containers made from plastic
Canning, processing or serving meat
Hotel, shop or dhaba that serves alcohol
Production or preparation of tobacco as raw materials
Rubber, coffee or tea plantations
Animal husbandry like fish and poultry farming

Latest updates on the PMEGP loan scheme

In February 2023, the government reported that a total of 3,083 recipients had received loans totalling 296.19 crores from the central government through the PMEGP scheme.

A margin subsidy of 100.63 crores was distributed to 3,083 beneficiaries under the PMEGP scheme by Manoj Kumar, the chairman of KVIC (Khadi and Village Industries Commission).

According to a statement made public by Ministry of Micro, Small and Medium Enterprises experts, 25,000 individuals would be able to find new jobs as a result of the distribution of this subsidy.

The PMEGP scheme made establishing 1.03 lakh new manufacturing and services units easier, giving rise to 8.25 lakh jobs in FY 2022. This was the highest point ever in the last 14 years of this programme.

In Jammu & Kashmir, the PMEGP scheme developed more manufacturing units than in Maharashtra, Gujarat, and Karnataka combined.

Key highlights of the PMEGP scheme

The PMEGP scheme is being implemented by the Khadi and Village Industries Commission (KVIC) at the nodal level and the Khadi and Village Industries Board (KVIB) and District Industries Centre (DIC) at the state level.
The Ministry of Micro, Small, and Medium Enterprises (MoMSME) manages the PMEGP, a central sector programme.
This scheme requires you to be above 18 years with no income ceiling as an eligibility criterion.
According to RBI norms, banks would not require collateral security for loans up to ₹10 lakhs.
The interest rate on loans can vary between 11% and 12%.
The repayment tenure on the PMEGP loans is 3 to 7 years after the preliminary moratorium period.
Individuals and institutional beneficiaries must submit a one-page online application form on the e-portal. The PMEGP MIS portal and application form are both mobile-friendly. At each stage of the application process, the system or the relevant officials will automatically send you SMS or email alerts.
The Indian government has established an online system for applying for and distributing Margin Money to financing branches.
Subsidies are available for various activities, including Agriculture and related activities, manufacturing, Service sector enterprises, repair and maintenance services, and Transport and environmental-related projects.
You must note that the PMEGP loan scheme is not an option for individuals who have not completed the 8th standard.
According to the project’s viability, the bank will evaluate it and make its judgement for an appraisal.
Existing units under the PMEGP scheme whose margin money claim has been adjusted and the initial loan has been repaid on time without any defaults are eligible to avail of the benefits of a 2nd loan under the PMEGP scheme.
The project’s maximum cost for upgrading in the manufacturing sector is ₹1 crore; in the service/trade sector, it is ₹25 lakhs.
For a 2nd loan, banks require the beneficiary to contribute 10% of the total project cost for all categories.
The subsidy rate on 2nd loan is 15% for all except individuals in Hill states and North Eastern Regions (NER).
For individuals in Hill states and North Eastern Regions (NER), the subsidy rate will be 20% of the project cost.
Only new projects officially sanctioned under the PMEGP are eligible for assistance under the scheme.
For the benefit of potential beneficiaries, model projects for various KVI activities have been posted on the PMEGP e-portal. Projects created by NSIC for Model Village Industries are also accessible on the website (www.kviconline.gov.in).
The respective financing bank will receive the Margin Money subsidy claim from the Nodal Bank.
The term deposit should hold the margin money subsidy for three years. No interest will be paid on TDR or added to loans up to the same amount as TDR. Margin Money will refund the advance if it becomes “bad” before three years.
Existing units (under PMRY, REGP, or any other plan of the Government of India or State Government) and units that have already received government subsidies under any other such programme are not eligible.

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FAQs

Q. 1 What are the components of a project’s cost?

Ans: The components of a project’s cost are included under 4 categories:

Material costs: Costs incurred on equipment, machinery, tools, raw materials, etc.
Human resources: The manual labour costs or the staff costs fall under this category. Managers, team members, wage workers, cleaners, security, etc.
Pre-planning costs: The expenses made on budgeting, market surveys, needs analysis, vendor payments, etc. Costs of licences, certificates and permits may also be included in this.
Operating costs: The expenses you will face in the day-to-day functioning of the business. Rental costs, energy costs, travelling, pickup and delivery costs, insurance, maintenance, etc.

Q.2 What does “village industry” mean?

Ans: Any village industry, excluding those on the “negative list”, that is situated in a rural area, that produces any goods or provides any services, whether or not they require the use of electricity, and where the fixed capital investment for the head of a full-time craftsperson or worker does not exceed ₹1 lakh in a flat area, ₹1.5 lakhs in a hilly area, and ₹4.5 lakhs in the case of Andaman and Nicobar Island and Lakshwadeep.

Q.3 Can I submit more than one project for my PMEGP loan application?

Ans: You will not be allowed to submit multiple projects for an application.

Q.4 Can I jointly finance a project from two different financial institutions or banks?

Ans: You are not eligible to finance a project jointly from a bank / financial institution and the PMEGP loan. If you apply for the PMEGP loan, you can only utilise it and not borrow from another institution.

Q.5 What is an EDP training centre?

EDP stands for Entrepreneurship Development Programme (EDP). This online training initiative has been undertaken by the Khadi and Village Industries Commission (KVIC), the nodal agency for PMEGP and other related Ministry of Micro, Small and Medium Enterprise programmes. It aims to educate and inform the Implementing Agencies on various managerial and operational functions, including finance, production, marketing, taxation, business management, banking procedures, bookkeeping, etc.

Q. 6 Is collateral mandatory for the security of a PMEGP loan?

Ans: Projects costing up to ₹10 lakhs are exempt from collateral security under PMEGP loans, according to RBI standards. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTSME) granted collateral guarantees for projects under the PMEGP scheme that cost more than 5 lakh rupees and up to 25 lakh rupees.

Q. 7 How is a capital expenditure loan/cash credit limit used?

Ans: Within the three-year lock-in period of the Margin Money (subsidiary), the working capital should touch the 100% limit of the cash credit sanctioned amount at least once. Even otherwise, the utilisation of the sanctioned amount should not be below 75% of the amount.

Q. 8 What is the PMEGP subsidy?

Ans: The government of India provides the PMEGP subsidy, which is a credit-linked subsidy. Beneficiaries receive a subsidy on the project’s overall cost ranging from 15% to 35% as part of the subsidy. People and MSMEs throughout the nation are eligible for the subsidy.

Q. 9 What are the main criteria for a project seeking PMEGP funding?

Ans: Projects seeking PMEGP funding should meet the requirements for rural areas (for Rural Area projects), per capita investment, own contribution, and negative list. In addition, the unit should be new.

Q. 10 How are the unit’s land and rent/lease costs treated as parts of the project cost?

Ans: If it is less than three years old, the rent or lease cost is considered a component of the project cost. However, it is not considered part of the project cost to include the land cost.

Q. 11 What is Udyami Portal and is it an accredited institution?

Ans: KVIC administers the EDP portal, which serves as the Nodal Agency for the MoMSME by Samadhan. As part of a public-private partnership (PPP) with the government, “Samadhan,” a renowned name in entrepreneurship development and skill development, has been granted authorisation to offer online PMEGP EDP courses through the portals at http://www.kvic.udyami.org.in and http://www.udyami.org.in.

The EDP training materials are according to the KVIC’s criteria. This training occurs on a mobile device by downloading the “Udyami” app from the Google Play store.

Q. 12 Where can I submit my business plan for application to the Prime Minister Employment Generation Programme (PMEGP)?

Ans: You can submit your business plan and apply to the Prime Minister Employment Generation Programme (PMEGP) simply by logging on to the official website of KVIC- www.kvic.org.in / kviconline.gov.in/pmegpeportal. You can then follow the steps mentioned in this blog post to apply online successfully. You can also visit the nearest KVIC / KVIB / DIC office.

Frequently Asked Questions:

Q1. Which bank is best for the PMEGP loan?

State Bank of India (SBI) is the most popular bank for PMEGP loans. Due to the widespread of this bank, PMEGP Loan in SBI is easily accessible by both rural & urban populations.

Q2. How long does it take to process the PMEGP loan?

The PMEGP Loan process time is approximately two months.

Q3. What collateral is acceptable for availing PMEGP Loan?

There is no prescribed collateral limit or type for availing PMEGP Loan.

Check out more Government Schemes

The post A Guide to the PMEGP Loan Scheme appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

ICEGATE – Guide on What is ICEGATE, How Does it Works, Bill of Entry, Shipping Bill

admin — Fri, 12 May 2023 05:00:00 +0000

What is ICEGATE?

The ICEGATE stands for “Indian Customs and Central Excise Electronic Commerce/Electronic Data Interchange (EC/EDI) Gateway.” It is a government-created internet platform that makes e-commerce trading possible.

It also helps share electronic data related to customs clearance, import, and export processes. It is a single-window platform that allows shareholders to access information 24 hours a day, seven days a week.

Meaning and Scope of ICEGATE:

ICEGATE aims to help importers, exporters, and customs brokers gain easy access to various e-services. These include e-payment of customs duty, shipment tracking, import/export report filing, and customs clearance.

Tariff and duty calculators, risk management systems, and electronic message exchange services are also a part of the services provided by the ICEGATE portal. These ensure that traders obey customs needs.

This software has greatly reduced the time and expenses related to customs clearance functions. It has also improved the general efficiency of India’s international trade. This has also promoted more traders to aim to go global. ICEGATE makes it easier for you to take your business to the next level.

ICEGATE supports a wide range of customs-related processes and services. ICEGATE’s primary services include:

You can file customs paperwork such as bills of entry, shipping bills, export declarations, and import/export permits electronically.
You can pay customs duties and any applicable charges online.
It updates the status of shipments in real time.
It involves a variety of parties in the trade process. Importers, exporters, customs brokers, shipping companies, and other government organisations are a part of it.
Stakeholders can share information among themselves using an online chat system.
Importers and exporters can register online.
Customs officers and other shareholders can exchange documents and information online.
It connects with many more government organisations, such as the Central Board of Excise and Customs, the Directorate General of Foreign Trade, and the Reserve Bank of India.

The overall goal of ICEGATE is to improve customs clearance processes, decrease the time and expenses of international trade, and increase the ease of the trade process overall.

Registering for ICEGATE

The Indian Customs Department operates the e-commerce platform ICEGATE (Indian Customs Electronic Commerce/Electronic Data Interchange Gateway). It offers an exclusive online window to submit business-related documents and pay customs duties and taxes.

To submit paperwork related to customs over the Internet, importers and exporters in India must use ICEGATE. The ICEGATE registration process is easy and the software provides you with information on each step.

Steps to follow to register on ICEGATE:

You can follow the below steps to register with ICEGATE:

Step 1: Start by visiting the official ICEGATE website (www.icegate.gov.in)

Step 2: Then click on the “Signup” link. Sign up on this site to register.

Step 3: Enter an ICEGATE ID and your email ID. You can also check the availability of ICEGATE IDs. These follow the criteria of the portal.

Step 4: To sign up as a CHA Licence / F Card Holder, select “Custom Broker or CHA” from the “User Role drop” down.

Step 5: Select the “Licence Holder/F Card Holder” from the “User Type” dropdown. Enter the “CHA PAN No.” and click the verify button.

Step 6: Confirm your details by clicking the “Confirm” button.

Step 7: Select the “Photo ID Type” from the dropdown. Click the “upload DS” link to upload Digital Signature. Select the “Certificate Name” and click the “OK” button. Click “OK” again for validation status.

Step 8: You will get a pop-up that says, “Digital certificate has been verified successfully”- Click the “OK” button.

Step 9: Check the “Terms and Conditions” check box and click the “Confirm” button.

Step 10: On the next page, enter the “OTP” and click the “Submit” button. You will then receive a new page with the registration confirmation message.

In the same way, you can register as a CHA G card holder, IEC holder, IEC Authorised Person, Air Line/Console Agent/Shipping Line/Shipping Agent, and Custodians.

Documents Required to Register on ICEGATE

You must submit the following documents, depending on your user type, to register on ICEGATE (Indian Customs Electronic Commerce/Electronic Data Interchange Gateway):

PAN (Permanent Account Number) card
Bank details (Cancelled cheques or statements)
Digital signature certificate (DSC) and class-3 certificate
Import Export Code (IEC) certificate
Proof of a business or trade, such as a trade license, registration document, or GST registration document.
Identity proof and address proof of the authorised person (if the importer is not an individual)
Authorised signatory details and a copy of their photo ID (such as PAN card, Aadhar card, passport, or driving license).
CHA License issued by Customs
Bank certificate of the CHA firm
Authorisation letter (if the Customs House Agent represents the exporter)

Benefits of Using ICEG

Trade and cargo carriers may benefit from using ICEGATE (Indian Customs Electronic Commerce/Electronic Data Interchange Gateway) in several ways. Here are a few of the main advantages of using ICEGATE:

Faster clearance: Officials can paperlessly check customs documents via ICEGATE, reducing the time it takes to clear imports and exports. The system also offers an option for online payment of duty, tax, and fee payments.
24/7 access: Users of ICEGATE can submit their customs documents and check the status of their shipments whenever they want from anywhere because it is accessible 24 hours a day, seven days a week.
Cost savings: Using ICEGATE, users can save money because they no longer need to submit physical customs documents, and managerial work reduces.
Improved accuracy: Users can file customs paperwork on ICEGATE digitally, which reduces input mistakes and mismatches that manual data entry may cause. It produces accurate and consistent data.
Transparency and accountability: With the help of ICEGATE, there are fewer chances of corruption and fraud in the customs clearance process.
Real-time information: ICEGATE allows consumers to follow their shipments at every stage and offers real-time data on the progress of customs clearance.

Using ICEGATE helps ease and simplify the customs clearance process, cutting down on time and expense while sticking to customs laws.

ICEGATE Bill of Entry

Indian Customs Electronic Commerce Gateway, or ICEGATE, is an internet gateway created by the Indian Customs. It makes it easier to file customs-related paperwork online and conduct online deals. ICEGATE helps submit the Bill of Entry, which is one of the important documents.

To get their imported goods cleared through customs, an importer or a customs clearance agent must present a legal document known as the Bill of Entry to the customs authorities. It is possible to track a Bill of Entry (BOE) through ICEGATE.

It includes information like the importer’s name and address, the description and cost of the items being imported, the country of origin, the number of goods, the value of goods, the amount of customs duty, and other relevant details.

The following information forms a part of the ICEGATE Bill of Entry:

Port Code
Licence Number
Customs House Agent Code (CHA)
Importer’s name
Importer’s address

You must have a working ICEGATE login ID and password to submit a Bill of Entry using the platform. Next, you can choose the ‘File Bill of Entry’ option from the menu and enter the necessary information.

The system generates a unique ICEGATE Bill of Entry number, which will be printed and given to customs authorities with other required papers. Once you submit, the ICEGATE Bill of Entry goes through several processing steps, including duty calculation, product inspection, and verification of documents. You can also download a soft copy of the bill of entry from the ICEGATE portal.

You can use the unique Bill of Entry number to track the ICEGATE Bill of Entry status through the ICEGATE site. You must ensure that the Bill of Entry is correctly and precisely filled out, as any errors or omissions could delay the clearance of the goods and result in fines. This Bill of Entry can be tracked by customs as well as traders through ICEGATE.

ICEGATE Shipping Bill

The most important document for receiving clearance from customs officials is the ICEGATE shipping bill. A shipping bill is a document that includes details of the products leaving India. It contains information like:

Exporter’s name and address
The receiver’s name and address
Mode of transport
Description of the products
Their number and value
The port of destination.

The shipping bill must also include all of the sender’s tax details. As a result, it is simpler to claim duty-related fines, additional charges, and duties.

Shipping bills form part into categories such as:

Free Shipping Bills
Dutiable Shipping Bills
Drawback Shipping Bills
Shipping Bills for Shipment Ex-Bond
Coastal Shipping Bills

These are based on the duty drawback and customs duty. With the help of shipping bill tracking, exporters and merchants can monitor the clearance status for various goods via the ICEGATE website.

You can track a shipping bill on the website by selecting the destination and entering the required information, including the date and shipping bill number.

Shipping Bill Tracking

To get customs clearance, the exporter must present a special bill called a shipping bill tracking. You must note that a person needs a shipping bill to load the items. Therefore the exporter needs to provide one.

On the ICEGATE portal, the exporter must submit the shipping bill online. The exporter may, however, also submit a physical shipment bill, but before that, he must get permission from the Principal Commissioner or commissioner first.

Export Shipping Bills

Export shipping bills come in varieties; you can tell them apart by their colours. The following are the several types of shipping bills, as well as the colours that show them:

Sr. No.	Name of the form of the bill	Colour
1.	Goods that are subject to customs duty	Yellow
2.	Goods that are not subject to customs duty	White
3.	Goods with drawback claims	Green
4.	Goods included in the DEPB (Duty Entitlement Pass Book) Scheme	Blue
5.	Goods that one can export duty-free and out of bond	Pink

ICEGATE Shipping Bill Procedure

A shipping bill must be provided once the officials grant the vessel, ship, etc., permission to leave the country. After submitting the bill, the customs officials inspect it to determine the value of the goods. Customs authorities clear the copy of this shipping bill with the words “let export order” and “let ship order” after they verify it.

Procedure to Generate ICEGATE Shipping Bills

Here’s the process to generate a shipping bill and how you can download the shipping bill from ICEGATE:

To create a shipping bill number format, the exporter must have the items below.

IEC Code No. or Customs House Agents (CHA) license number
Bank account number, which will transfer the export revenues using the Authorised Dealer Code.

Along with the invoice and a copy of the packing list, the exporter or his customs house agents must sign the declaration and bring it to the service centre.
When data entry is complete, the exporter must validate the data using the checklist and then report the results to the service centre. If the data is accurate, the centre processes it automatically.
If applicable, the Assistant Export Commissioner will evaluate the processed data,

If the value of such shipment exceeds 10 lakh Indian rupees, or
If the cost of free samples exceeds 20,000 Indian rupees or
If the drawback amount is more than 1 lakh Indian rupees

After completing the steps mentioned above, the exporter can use the service to check the status of the shipping bill.
If a question arises, the exporter must respond as soon as possible by giving the service centre his information.
Before exporting the goods, the exporter must provide a checklist and all original paperwork, including the invoice and packing list.
Exporters may produce the shipping bill if they obtain a “Let Export Order.”

Through ICEGATE, a trader can search the status of their shipping bill. Through FlexiLoans’ advanced technology system, you can track the progress status of your loan. Our team is always eager to help you with more information or any step in the application process.

What is IGM in Shipping?

In shipping, IGM stands for “Import General Manifest”. An IGM is a legal document that the carrier of the goods fills out at the destination customs facility. Import General Manifest (IGM) is an essential document that the trader must show to the customs officers at the destination port when importing goods.

It includes information about each shipment of cargo or merchandise arriving in a country on a certain vessel. The following information forms part of the Import General Manifest:

IGM Number
Line Number
Importer’s name
Importer’s address
Description of goods
Port of loading
Other relevant details about the goods

How Does IGM Work?

The customs officers will verify the data listed in the documents mentioned above. The IGM declares that the cargo has arrived at its destination. Since you must fill out this form whenever goods arrive at a destination, there is no way for you not to do it.

As soon as imports arrive at the customs station, each nation’s government requires carriers to complete the Import General Manifest (IGM).

Each line of the bill of lading or airway bill containing import information comes with a serial number that forms a part of the Import General Manifest (IGM).
Once done, the importer must submit the required Bill of Entry based on the Import General Manifest. This takes place to ensure that the carrier meets all the rules and protocols for import customs clearance.
After that, officials manually enter data into the system because there aren’t any electronic filling machines at customs facilities. And to do this, you will see a customs agent filling out the questionnaire and ensuring they record every piece of data needed for the Import General Manifest (IGM).
If they find any mistakes when completing the Import General Manifest, you must know that the import customs facility will not accept clearance papers. All the information in the Import General Manifest’s details must match that in the Import Customs Clearance paperwork.

Attachments to be Sent with IGM

You must present to the IGM the following supporting documents according to governmental regulations:

Deck Cargo certificate / Declaration
Income tax certificate (for export cargo)
The last copy of the port clearance document
Amendment application (if any)
A ‘No Demand’ certificate from the Port Trust
Certificate for nil export cargo
Crew baggage checking application
Sign on/off application for the crew (according to relevancy)

What is EGM?

An important counterpart of IGM is EGM. In the context of shipping, EGM stands for “Export General Manifest”. It is a document that lists every cargo item being exported on a specific vessel. The person in command of the ship or the aircraft is responsible for filing the EGM.

The agent of the person in charge may also carry out this function, according to Section 148 of the Customs Act. These people should identify themselves as agents and have the proper authorities confirm their status as such. They will then be responsible for carrying out the duties of the person in charge and for any legal outcomes, such as fines and seizures.

The Customs Act of 1962 places various obligations on carriers to ensure efficient control over exports and imports. One such duty that falls to the carrier is the Export General Manifest (EGM).

EGM Process:

To complete the customs clearance process, the person in control of the cargo vessel or aircraft must provide information about the shipment loaded onto them in a prescribed format. You must fill out an EGM before the carrier departs.

Details that the EGM includes are:

The name of the ship
Its arrival and departure dates
Exporter’s name
Description of the goods
Number of packages
Weight of packages
Value of the cargo

The customs officials use this information to verify the accuracy of the export declaration and that the exporter has fulfilled all legal needs.

The EGM certifies export reports for customs officials. The exporter can claim the advantages of the exports only based on these certificates. The EGM ensures that every item that leaves India’s territorial waters and borders is properly accounted for.

The EGM appears according to the Export Manifest (Vessels) Regulations of 1976 and the Export Manifest (Aircraft) Regulations of 1976. Duplicate export manifests are necessary, and each must list all the goods transported on the aeroplane or vessel in compliance with these criteria.

There are four EGM forms in total:

Form I contains a general declaration
Form II includes the passenger manifest
Form III, in the case of vessels, contains a list of the private property that the master, officers, and crew own, and in the case of aircraft, Form III provides the cargo manifest.
In the case of aeroplanes, the airline files a separate Form IV with the list of the captain’s and crew members’ private property.

Also, in the case of an aircraft, the cargo manifest will detail (on separate sheets) the cargo that the trader has shipped, transhipped, and is currently in the craft but has not yet landed or transhipped.

Each of these three categories requires you to complete a separate form if you transport items like weapons, ammunition, explosives, narcotics, dangerous drugs, or gold.

Difference between IGM and EGM

Key Difference	IGM	EGM
Meaning	IGM in shipping means Import General Manifest.	EGM in shipping means Export General Manifest.
Purpose	The IGM assists in making sure that a vessel’s import cargo has been reported in full and that the carrier has complied with all legal requirements.	EGM ensures that every item the exporting nation leaves is properly accounted for.
Who should file	The carrier, or their agent, files an IGM with the destination country’s customs authorities.	Whereas EGM forms a report to the origin country’s customs authorities by the carrier or their agent.
Details	IGM forms a part of imports. Hence it contains details about the items entering a country on a certain vessel.	EGM forms a part of exports. Hence it comprises details about the items that are leaving a country on a specific vessel.
Information included	IGM contains information about the importer, the items’ description, the number of packages, the weight, and the cargo’s worth.	Whereas EGM contains information like the exporter’s name, the products’ descriptions, the number of packages, the weight, and the value of the cargo.
Legal responsibility	The accuracy and completeness of the information in IGM are legally the carrier’s or their representative’s responsibility.	While the legal responsibility for the accuracy and completeness of the information in EGM rests with the exporter or their representative.

What is Consol Manifest?

Another essential document a trader needs to have alongside the IGM and EGM is the Consol Manifest. The term “consolidated manifest,” often known as a “consol manifest,” refers to a document you use in shipping to detail all of the cargo you transport on a single vessel. It is a summary of each bill of lading, which are individual records that detail the specific goods sent out.

When the items arrive at customs, the freight forwarder co-loading any cargo must have a consol manifest ready to be submitted. Based on such a console manifest, the importer submits import documents to complete the clearing process to receive the products.

The consol manifest is an important document for the shipping company and the customs officials who inspect the cargo at the port of arrival.

Contents of a Consol Manifest

The Consol Manifest contains:

Operator name and details
Consignor Information
Bill of Lading number
Details relevant to the goods (quantity, type, and description of goods)
Consignee Information
Shipping route
Information about freight charges
Costs associated with the shipment.

Usually, the carrier, the agent, the shipper, and its agent sign the consol manifest to confirm that they understand the terms and conditions.

Who Uses the Consol Manifest?

While all parties interested in the cargo carried by the ship need the cargo manifest, it is most important for port customs. They need it so the ship can release its cargo at the port.

The ship’s commanding officer is in charge of giving the port customs the consol manifest.
The chief officer, who is also known as the first mate, is in control of the ship’s cargo. He is responsible for the loading, unloading, stowing, and lashing of the cargo.

Even if the cargo heads to multiple locations, the normal cargo manifest details every item on board. Most of the time, it also shows the price of each item. The list uses the items loaded from each port of call and the bills of lading.

As each shipment arrives at its destination port, the cargo ship’s first mate or chief officer can easily cross items off the list. The shipping firm and the customs inspectors, who examine the cargo at the port of arrival, need the consol manifest.

It helps make sure that everything on board is present and in working order and that all fees and taxes are up to date. It also enables the shipping company to monitor the cargo’s progress and guarantee that its journey is safe and it reaches its destination on schedule and in good shape.

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What is a Bill of Lading in Shipping?

A bill of lading is a crucial document that serves as a contract between the captain, an agent of the carrier firm, or the owner of the carrier issues. It offers a record of the items being sent, their amount, and their delivery conditions. Typically, the importer uses the bill of lading to submit the bill of entry.

A bill of lading works as proof for the carriage contract. It acts as proof of ownership of the commodities and serves for several tasks, including obtaining financing, setting up insurance, and releasing the items at the port of destination.

There are three main types of bills of lading, as mentioned below:

Straight bill of lading: This kind of Bill of Lading is non-negotiable, which means it is non-transferable to another party and only valid for the named consignee.
Order bill of lading: This kind of B/L is negotiable, which indicates that it may be sent to a different party with an endorsement or in other ways.
Bearer bill of lading: This kind of B/L is negotiable and can be sent to a different party to transfer ownership.

The bill of lading is a key document in international trade, and efficient cargo transportation depends on its correct and prompt issuing.

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FAQs

Q. 1 Who can use ICEGATE?

Ans: Authorized importers, exporters, customs brokers, shipping agents, and other organizations involved in trade may use ICEGATE.

Q. 2 Why do I have to sign up for ICEGATE?

Ans: Online document filing is only possible for registered users. Therefore, one must have a registered ICEGATE ID to fill out online shipping bills, bills of entry, and other documents.

Q. 3 Which transaction types does ICEGATE support?

Ans: You can register on ICEGATE for transaction types, including Import, Export, Import General Manifest, Export General Manifest, and Consol Manifest. You can use ICEGATE for other things, like checking for updates or changing your ICEGATE Bill of Entry or Shipping Bill.

Q. 4 How do I find the status of my shipment on ICEGATE?

Ans: You must input the shipping bill number or bill of entry number in the tracking section of the ICEGATE website to track your shipment there. The mobile app also allows you to keep track of the progress of your shipment.

Q. 5 What is a Customs Duty?

Ans: A customs duty is a tax a government imposes on goods brought into a country from outside. It’s also referred to as import duty or tariff. The value of the items a trader transports across international boundaries determines how much officials charge him.

Customs duties have several functions. These include protecting domestic businesses from foreign rivalry, bringing in money for the government, and controlling the movement of products across borders. Sometimes, you don’t have to pay as much tax on the goods you bring in depending on their usage, for example, if it’s for personal use or research.

Customs duties can also be a penalty for breaking the rules by smuggling or misidentifying products.

Q. 6 Can I pay Customs duty online?

Ans: Yes, you can pay the customs duty online. This is possible with the help of the ICEGATE (Indian Customs and Central Excise Electronic Commerce/Electronic Data Interchange) portal.

You must first register on the customs department portal to pay the customs duty online. After you receive the request, give the necessary information about your shipment. This includes the shipping bill number, bill of entry number, and amount of customs duty payable.

After providing your information, you can complete the payment process by selecting a payment method such as credit/debit card, net banking, or e-payment wallet. When your payment is successful, the portal will send you an acknowledgment receipt, which you can use as proof of payment.

Q. 7 How is the Customs Duty calculated?

Ans: To estimate the value of the goods in India, they add the product price, insurance cost, and shipping fee. Depending on the type of items being shipped, officials charge a levy between 5% to 40%.

Q. 8 What is the IEC code?

Ans: An Importer-Exporter Code (IEC) is an essential company identifying number that you require for exporting from or importing into India. Unless specifically exempted, no person may export or import without obtaining an IEC.

Q. 9 What is the difference between a Bill of Entry and a Bill of Lading?

Ans: A bill of lading is a document that a carrier, such as a shipping firm or a shipping company, issues to confirm that they have received the items intended for dispatch. In addition to acting as a receipt for the goods, the bill of lading also proves ownership, which is essential for finance and insurance.

The Bill of Entry, on the other hand, is a record that the destination country’s customs officials need to permit the entry of imported goods. Customs agents use the Bill of Entry to determine the proper customs duties, taxes, and other fees for imported goods.

Q. 10 What types of documents are important for registration on the ICEGATE portal?

Ans: Several documents related to the individual and the business are required to register on the ICEGATE portal. The most common documents include Aadhaar Card, Voter ID, Driver’s Licence, Authorisation Letter, Passport, Authorisation to apply for F / G card, and Trade Permit.

Q. 11 What are G card and F card holders in ICEGATE?

Ans: In ICEGATE, registered users can authenticate their electronic communications with Indian customs authorities using one of two digital signature certificate (DSC) types: the G Card or the F Card.

Government representatives, such as public sector businesses, ministries, and government agencies, have the G Card, a type of DSC. On the other hand, the F Card is a kind of DSC given to those who work for private sector organisations, including importers, exporters, and customs brokers.

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Top 10 Savings Schemes in India With The Highest Interest Rate

admin — Sun, 09 Oct 2022 11:41:00 +0000

Saving money is an essential financial habit that everyone should develop. It helps you in times of need and enables you to reach your financial goals. While there are several ways to save money, investing in a savings plan is one of the most effective methods.

A savings plan or Saving Scheme is a life insurance policy that provides you with financial security in case of an unforeseen event while also helping you grow your wealth over time. The best part about investing in a savings plan is that it offers tax benefits under section 80C of the Income Tax Act.

Several types of saving schemes are available in the market, each with its own features and benefits. To help you choose the right savings plan for yourself, we have compiled a list of India’s top 10 Best Saving Schemes based on their return on investment (ROI).

Here is a list of the top 10 savings plans available in India:

1. Public Provident Fund (PPF):

The Public Provident Fund is a long-term Govt Saving Schemes offered by the government of India. It has a lock-in period of 15 years and provides an interest rate of 7.6% per annum. Investments made in PPF are exempt from taxes.

2. Employees’ Provident Fund (EPF)

The Employees’ Provident Fund is a retirement savings scheme for employees in India. It has a lock-in period of 5 years and offers an interest rate of 8.5% per annum. EPF contributions are eligible for tax benefits under section 80C of the Income Tax Act.

3. National Savings Certificate (NSC)

The National Savings Certificate is Saving Schemes that is offered by the government of India. It has a lock-in period of 5 years and offers an interest rate of 8% per annum. NSC investments are eligible for tax benefits under section 80C of the Income Tax Act.

4. Sukanya Samriddhi Yojana (SSY)

The Sukanya Samriddhi Yojana is a long-term savings scheme for the girl child. It has a lock-in period of 21 years and offers an interest rate of 8.1% per annum. Investments made in SSY are eligible for tax benefits under section 80C of the Income Tax Act.

5. Senior Citizen Savings Scheme (SCSS)

The Senior Citizen Savings Scheme is a long-term saving scheme for senior citizens in India. It has a lock-in period of 5 years and offers an interest rate of 9% per annum. Investments made in SCSS are eligible for tax benefits under section 80C of the Income Tax Act.

6. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Pradhan Mantri Vaya Vandana Yojana is a long-term Saving Schemes In India for senior citizens. It has a lock-in period of 10 years and offers an interest rate of 8% per annum. Investments made in PMVVY are eligible for tax benefits under section 80C of the Income Tax Act.

7. Fixed Deposits (FDs)

Fixed Deposits are a type of savings account where you can earn interest on your deposits. They have a fixed term and offer higher interest rates than regular savings accounts. FDs typically have a lock-in period of 5 years, but some banks offer FDs with shorter terms. Interest earned on FDs is taxable.

8. Recurring Deposits (RDs)

Recurring Deposits are similar to Fixed Deposits, but they allow you to make smaller deposits every month. They have a fixed term and offer higher interest rates than regular savings accounts. RDs typically have a lock-in period of 5 years, but some banks offer RDs with shorter periods. Interest earned on RDs is taxable.

Mutual Funds (MFs)

Mutual Funds are investment products that pool money from investors and invest it in a variety of securities. MFs usually offer superior growth rates compared to your normal fixed deposits and savings. MFs offer different risk and return profiles, so choosing the right MF for your needs is important. However, investment in MFs is subject to market risks, so please consult your financial advisor before investing.

10. Equity-Linked Saving Scheme (ELSS)

ELSS are mutual funds that invest primarily in equity markets. They have a lock-in period of 3 years and offer great potential for high returns. However, ELSS also comes with the risks associated with equity investing, so please consult your financial advisor before investing.

How to choose the best saving scheme?

When it comes to choosing the Best Saving Plan plan for you, there are a few factors you need to take into consideration. First, you need to decide what your investment goals are. Are you looking to save for retirement? For a child’s education? Or for a rainy day? Once you know your goals, you can start looking at different investment options and compare them based on factors such as returns, risk, fees, and tax benefits.

Returns: When comparing investment plans, one of the most critical factors to look at is the potential return on investment. Each type of investment carries a different level of risk, which will affect the possible return you can earn. For example, equity-linked saving schemes (ELSS) offer the potential for high returns, but they also come with the risks associated with equity investing. So, make sure you set your priorities straight when it comes to returns. This means finding out the amount of return you are satisfied with, being clear about your short-term and long-term financial goals, etc.

Risk: Another important factor to consider when choosing an investment plan is your risk tolerance. Some people are willing to take on more risk to potentially earn higher returns, while others prefer to stick with safer investments that offer lower returns. It’s important to know your own risk tolerance before making any investment decisions.

Fees: Another thing you need to look at when comparing investment plans is the fees charged by the provider. Some investment plans have high fees, which can eat into your returns. So, compare the fees charged by different providers before making a decision.

Tax benefits: Some investment plans offer tax benefits, which can help you save money on your taxes. For example, certain tax-saving mutual funds (ELSS) investments are eligible for deductions under section 80C of the Income Tax Act. So, if you are looking for an investment that can help you save on taxes, consider this factor.

These are just some of the factors you need to consider when choosing the Best Money Saving Plans . It’s important to do your research and compare different options before making a decision. You should also consult a financial advisor for professional guidance on how to best save for your future.

Conclusion

There are a lot of different investment options available in India. It is important to research and choose the plan that best suits your needs. You should also consult a financial advisor to get professional guidance on how to best save for your future.

Choosing the correct financing options (such as loans) that offer optimized interest rates according to your earnings and expenses can go a long way in helping you pile up that savings closet. If you’re looking to apply for a business loan that can be approved instantly, FlexiLoans is the right place for you. We offer instant business loans, MSME loans, small business loan and collateral free loans to new businesses at competitive interest rates, with minimal documentation and quick disbursal. Check out business loan eligibility, and business loan emi calculator. and get instant approval on your loan!

Check out more Government Schemes

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The SATAT Scheme

admin — Tue, 09 Aug 2022 16:07:00 +0000

Introduction

The full form of SATAT is Sustainable Alternative Towards Affordable Transportation. It is a government scheme that aims to establish Compressed Biogas (CBG) production plants and make them accessible for use in the automotive industry by issuing Expression of Interest (EOI) to potential investors.

The Ministry of Petroleum and Natural Gas introduced the scheme in October 2018 in partnership with oil-related public sector institutions. To boost the sector’s development, the government has categorized it as a priority sector, enabling them to access MSME loans.

Goals of SATAT

Intentionally use more than 62 million metric tonnes of trash generated in India each year
Control automobile pollution and emissions and residue from burning agricultural/organic waste
Reduce import dependency on fuels
Increase employment opportunities in India

What is Compressed Biogas?

Biogas is a renewable energy source created through a process known as anaerobic digestion.

In this process, microbes break down organic materials such as food, municipal waste, or animal manure in the complete absence of oxygen.
Biogas can be produced artificially or organically as part of industrial processes for fuel.
It is filtered to eliminate Hydrogen Sulphide, Carbon dioxide, and water vapor before being compressed into biogas (CBG), which has more than 90% of methane (CH4) concentration.
CBG may be a sustainable and renewable alternative to gasoline as it can be used instead of CNG in automobiles, industries, and commercial locations.

Advantages of turning waste into CBG

To ensure that waste management is carried out responsibly, along with significant reductions in carbon emissions and pollution
To generate an additional source of income for farmers
To encourage entrepreneurs in the rural economy, thereby leading to more job opportunities
To provide sufficient support for national pledges to meet climate change targets
To reduce imports of natural gas and crude oil
To safeguard the national economy from price fluctuations of crude oil and natural gas

Government Schemes to support SATAT

Government schemes are facilitating SATAT in the following ways:

The 2018 National Biofuels Policy encourages the use of advanced biofuels like CBG.
The Indian government launched the GOBAR-DHAN (Galvanising Organic Bio-Agro Resources) initiative in early 2021 to recycle manure and solid waste into CBG and compost.
The program intended to fund 700 projects across the country in 2018-19.
The initiative was funded under Solid and Liquid Waste Management (SLWM), part of Swachh Bharat Mission-Gramin (SBM-G), to benefit families in defined areas via Gram Panchayats.
The Ministry of Agriculture has included CBG plant by-products such as “Fermented Organic Manure” in the Fertilizer Control Order to ensure the development of organic farming in India and to increase income from the sale of CBG plant by-products such as “Fermented Organic Manure.” This allows for the commercialization of organic manure across the country.
State government plans have been established to promote CBG activities in addition to the efforts of the Government of India. Several states, such as Haryana, Punjab, and Uttar Pradesh, have constituted State Level Committees to oversee the SATAT Yojana implementation and auditing.
Business Loans for the construction of compressed biogas (CBG) facilities have been introduced as new categories eligible for financing under the priority sector, according to the Reserve Bank of India’s (RBI) amended Priority Sector Lending (PSL) guidelines issued on September 4, 2020. As a result, business loan accessibility for CBG plant development has improved.

SATAT Scheme Approach

The scheme’s principal implementation approach is through proposals to entrepreneurs for setting up Compressed Biogas facilities.

The CBG manufactured at these factories will be delivered to petrol stations around the country in cylinders.
To increase entrepreneurs’ returns on investment, they can independently sell the additional by-products of these plants, such as bio-manure, carbon dioxide, etc.
Compressed Biogas (CBG) will also aid in reducing reliance on crude oil imports and achieving the national goals of increasing farmer income, rural employment, and entrepreneurship.
There are plans to build around 5000 CBG plants across the country in different stages by 2025.
These facilities aim to produce approximately 15 million tonnes of compressed biogas annually.
It is projected that establishing these factories would generate employment for around 45,000 people.

Final Thoughts

The SATAT scheme operates on the belief that all biomass can be converted into biogas and bio manure. It will help India become self-sufficient in fuel/energy generation and contribute to reducing climate change to a great extent.

Check out more Government Schemes