The Hindu : National : Two schemes merged, new programme in place

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National

Two schemes merged, new programme in place

Special Correspondent

It is expected to create 37.37 lakh jobs

Projects can be set up in manufacturing, business, services sectors
No ceiling on annual income of beneficiaries

NEW DELHI: The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved introduction of the Prime Minister’s Employment Generation Programme (PMEGP) by merging the Prime Minister’s Rozgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP).

The new credit-linked subsidy programme will generate employment opportunities through establishment of micro enterprises in rural and urban areas.

It is expected to create 37.37 lakh jobs. The estimated budgetary outgo is Rs. 4,485 crore for the next four years and Rs. 740 crore for the current fiscal.

Panchayats to help in selection

Finance Minister P. Chidambaram said the upper limit on the cost of the project that could be set up in the manufacturing sector was Rs. 25 lakh and in the business/services sector Rs. 10 lakh. There was no ceiling on the annual income of the beneficiaries. However, they should have a minimum qualification of standard VII for projects costing more than Rs 10 lakh in the manufacturing sector and more than Rs 5 lakh in the business/services sector.

The beneficiaries would be identified, inter alia, with the help of panchayats and at special awareness camps, and provided a mandatory Entrepreneurship Development Programme training for two-three weeks.

Special categories

In urban areas, the subsidy for the general category would be 15 per cent and 25 per cent for special categories such as the Scheduled Castes, the Scheduled Tribes, the Other Backward Classes, minorities, women, ex-servicemen, the physically handicapped, the northeast, and hill and border areas.

In rural areas, the subsidy would be 25 per cent for the general category and 35 per cent for the special categories.

The owner’s contribution would be 10 per cent in the general category and five per cent in the special category.

More attractive

The subsidy levels and the limit on the cost of projects or units that could be established under the PMRY, which was extended to rural areas as well in 1994-95, were quite low and unattractive compared to the REGP.

While the maximum subsidy admissible was Rs. 12,500 and the maximum cost of project that could be established was Rs. 5 lakh under the PMRY, these were Rs. 4 lakh and Rs. 25 lakh under the REGP in the general category.

The scheme would be implemented at the national level through the Khadi and Village Industries Commission under the Ministry of Micro, Small and Medium Enterprises.

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