Question : Setting up of MSME Units

(a) whether the Government has any proposal to set up Micro, Small and Medium Enterprises (MSMEs) units in most backward areas in the country and specially in Bihar State to provide permanent employment to the local youths;

(b) if so, the details thereof and if not, the reasons therefor;

(c) whether the Government has decided to set up more MSME Units for overall development of the country and if so, the details thereof, State/UT-wise;

(d) the details of the incentives being provided to enthusiastic entrepreneurs to set up MSMEs in the country; and

(e) whether the MSME units have been provided with adequate capital investment and funds for their operations as per their demand and if so, the details thereof and if not, the reasons therefor?

MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES
(SHRI NITIN GADKARI)

(a) to (c): Ministry of Micro, Small and Medium Enterprises (MSME) is implementing Prime Minister’s Employment Generation Programme (PMEGP), which is a major credit-linked subsidy programme aimed at generating self-employment opportunities through establishment of micro-enterprises/units in the non-farm sector by helping traditional artisans and unemployed youth.

State/UT-wise target and achievement under the PMEGP Scheme including Bihar during the year 2019-20 (as on 21.01.2020) are given at Annexure-I.

(d) & (e): Under the scheme, loan is being provided by all Public Sector Banks, selected Private Sector Banks and Co-operative Banks with margin money subsidy by Ministry of MSME through KVIC.

Margin Money subsidy to various categories of beneficiaries is detailed below:
<pre>
Categories of beneficiaries under PMEGP. Beneficiaries contributions (of the project cost) Rate of subsidy.
(of the project cost)
Area
(location of the project/ unit) Urban Rural
General category. 10% 15% 25%
Special (including SC/ST/ OBC/ Minorities/Women, Ex-servicemen, Physically Handicapped, NER, Hill & Border Areas. 05% 25% 35%
</pre>

Project upto Rs. 25 lakhs in the manufacturing sector and Rs. 10 lakhs in the service sector are supported under PMEGP. Further, Ministry of MSME has also introduced a component of second financial assistance for expansion/upgrading existing PMEGP/MUDRA units with assistance up to Rs.1 crore for manufacturing unit and up to Rs. 25 lakhs for service/ trading unit with 15% subsidy (20% for NER and hilly state) from the year 2018-19.

In addition, incentives are provided to entrepreneurs under the following schemes:

(i) Under Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE), collateral free credit facility (term loan and/or working capital) is extended by lending institutions to new and existing micro and small enterprises. The guarantee cover provided is from 75% to 85% for credit up to Rs. 2 crore.
(ii) Under Credit linked Capital Subsidy Scheme (CLCSS), 15% up front capital subsidy (limited to maximum Rs. 15 lakhs) is provided on finance availed by entrepreneurs for technology upgradation of micro and small enterprises.
(iii) Under Interest Subvention Scheme, 2% interest subvention on fresh or incremental loans maximum up to Rs. 1 crore are given to MSMEs who have valid GSTN number and Udyog Aadhar number.