1.) Objective

With a view to discourage the migration of rural educated youth to the urban areas and to solve the problem of unemployment rappidley increasing the captioned scheme has been formulated to provide financial assistance to the rural individual entrepreneurs to the tune of Rs. 10-00 lacs by the Banks, under this scheme over and above rate of interest of 4%, which is subject to 10% will be borne as the Interest Subsidy for general candidates and for reserved categories (SC/ST,OBC,Women,ex-serviceman,PH/VH) rate of interest will be fully exempted and borned by the government of U.P. as interest subsidy. The commercial banks and Regional Rural Banks under which service area approach the villages or rural areas fall will provide bank loan as per rules. In Districts, the scheme will be implemented by Khadi & Village Industry board under direct control of District Magistrate.

2.) Period of Scheme

This scheme will remain in operation for a period of five years from the date of issue of notification as state sponsored scheme.

3.) Area Of Operation

Rural areas as defined under the U.P. Panchayat Raj Adhiniyam by the State Govt. and rural areas as defined by Khadi Village Industries commission/Reserve Bank of India from time to time.

4.) Eligible Entrepreneurs

Under this scheme entrepreneurs will be benefited mainly on the following merits

• Preference will be given to the candidates trained by Industrial Training Institute/Ploytechnic.
• Educated unemployed youth whose age for Govt. service has expired.
• A candidate trained under TRYSEM and any other Govt. scheme.
• Traditional artisan
• Women interested in self employment.
• Candidate passed commercial education [10+2 with village industry as a subject.
• Who has registered himself in Employment Exchange of the concerned district.

5.) Identification Of Beneficiary

The District Level Committee, headed by DM/CDO/SDM as constituted for other State Sponsored Schemes will identify the borrowers or by the committee as constituted by U.P. Khadi Village Industry Board. Before sanctioning loan, it is to be ensured that the borrowers have acquired training and should be the bonafide resident of the village & permanently residing there. He should have required margin money for establishment of unit.

6.) Eligibility Criteria For Selection

• Borrowers should not be below the age of 18 years and not more than 50 years.
• 50% of the borrowers should be from SC/ST /O.B.C. category.
• Gramodyog units should be identified based upon the availability of raw materials locally for identified beneficiaries.
• Preferences will be given to such units which would be engaged in production of commodities to meet out the daily necessities of local cousumers.

7.) Quantom Of Loan

Under the scheme in first phase the eligible beneficiary will get interest subsidy for the loan upto Rs.10.00 lakhs for Term Loan/Working Capital. Self contribution of the Bank Loan for general category will be 10% and for SC/ST/Women/PH/OBC/Ex-serviceman 5% of the total project cost.

8.) Margin Money/Security And Guarantee

Margin money/Security and guarantee will be taken as according to the guidelines issued by Reserve Band Of India time to time.Up to Rs. 5.00 lacs loan gurantee is exempted by the Reserve Bank of India.

9.) Refinance

Under the scheme refinance will be made available by SIDBI/NABARD.

10.) Payment Of Interest Subsidy Claims

After sanction of the loan, District Village Industry Officer will issue Interest Subsidy eligibility certificate and will renew it on a prescribed format [Annexure-A]

11.) Payment Of Interest Subsidy Claims

This scheme is being sponsored by U.P. Govt., for which a provision will be made in Distt. Plan for the year 1994-95 under the Code No. 2851-40100 and the head will be continued code no. for the successive years. Lateron available money under the prescribed code will be kept in any branch of SBI/Sponsor Bank/Major implementing Banks and these accounts will be operated by Khadi & Village Industries
Officer/Manager, (Gramodyog.) The concerning branch will file KVIB & DVIO will make payment after scrutiny to the branch through cheque/Draft. DVIO will prepare full particulars unitwise/Industrywise in a register a will supply the same to U.P. Khadi Village Industry Board had office every month and it will be monitored by Bank finance Section of KVIB. That will be followed b

• District Village Industry Officer will place demand for 1/10 part of total bank loan as allotted in District Credit Plan.
  NOTE:- It is also necessary to clarify that the amount so demanded under District Credit Plan will also include the amount eligible for last year’s working units as will as for current year
• The amount so allotted in District Credit Plan will be drawn by CDO & will be made available to DVIO/Manager, Village Industry who will deposit the same according to para 11- under the head “Mukhya Mantri Gramodyog Rojgaar Yojna” Intrest subsidy amount for year by opening an account in the bank.
• 3- when the Branch Manager will claim the amount, payment will be made through cheque of draft by DVIO to the concerned bank branches and will record these entries in a register and the full details will be sent to the head office monthly.

12.) Related Industry

In this scheme, industries as identified time to time by KVIC. Mumbai/Commissioner, Khadi & Village Industsries, Govt. of India and projects pertaining to service actvities opprated by NABARD according to local availability will be taken for financing with the cast up to Rs. 10.00 lakhs. At present list of identified industries/Service activities is encloseds to annexure ‘D’.

Loan Disbursement Interest Subsiby Redated Process

• The district Village Industry Officer will collect the applications through personal contest with various institutions/ entrepreneurs/different Govt. Deptts. or through press release. The applications will be collected on a format as prescribed by Bank as possible. If application forms are not available easily, then the Board may use individual entrepreneurs application form, lateron the aplplication may be obtained on bank’s form.
• Thus the list of applications received by the District Village Industry Officer will be incorporated in a register and then made available to the all members of the constituted selection committee. In the meeting of selection committee selected application form will be sent to selected bank branches proposed by the entrepreneur.
• For identification of the entrepreneurs directives given in para 4, 5 & 6 will be followed.
• Concerned bank officer will incorporate the applications sent by the District Village Industry Officer in a register under the head of “Mukhya Mantri Gramodyog Rojgar Yojna” and will ensure the completion of sanction of loan and other formalities as time to time schedule fixed by RBI {Maximum 6 weeks} for the disposal of applications.
• The Branch Manager will give the information of sanction of loan to the District Village Industry Officer and to the beneficiary.
• If any application is to be rejected by the bank, the branch manager will inform its controlling officer with detailed information.
• The controlling officer of the branch will exmine such applications and if the application is rejected, the District Village Industry Officer will be informed alongewith sufficient cause of rejection by the controlling officer/branch manager. The power of rejection of application will be vested with the controlling officer of the branch. Bank branch will keep the record of rejection and sanction of each and every application.
• The loan amount will be disbursed by the banks after completion of sanction formalities and Bank branch will intimate the District Gramodyog Officer about the completion of present/loan disbursement.
• The interest will be charged in the account of entrepreneurs on six monthly basis according to rules, the details of bill will be submitted in due/copy to the District Village Industry Officer by the bank branch concerned on Annexure-B and C. After scrutiny of the bill the District Village Industry Officer will make payment to the branch through cheque/draft and will incorporate it in the register mentioned in para-11.
• Bank branch will adjust the cheque/draft in the account of entrepreneurs account. This process will be followed in every quarter/Half yearly after calculation of interest.
• The benefit of interest subsidy will not be given to the entrepreneurs under following conditions:
• 1.) If loan has been misutilised by the entrepreneur.
• 2.) If the entrepreneur has not completed the project and willingly commit mistake.
• 3.) If the account is declared default by the bank.
• 4.) If the unit is not making any production/service or closed.

NOTE:- If the Industry is affected due to natural calamity or any accident the branch manager and District Village Industry Officer will conduct joint survey and on their recommendations the Head Office of the Board will decide about the providing of interest subsidy to the entrepreneur.

Additional Working Capital

If any unit is getting any large supply order or order for export and to fullfil this it needs additional working capital, in that case the bank will be considering to increase additional working capital/C.C.limit.

Awareness Traning Camp

To attract the beneficiaries towards the Mukhyamantri Gramodyog Rojgar yojna and with the objective to provide information about the scheme in the rural areas to the public, 01 percent of the interest subsidy amount sanctiond by the Government will be available and allocated for organizing awareness training camp.

Publicity

For publicity of the scheme, putting hordings of the public places, printing of the phamphlates/handbills, advertising from radio and television etc. 01 percent of the interest subsidy amounts approved by the Government will be used for the publicity of the scheme.

Renovation Revival Of Units

Any unit established and financed earlier had been defunct or dead die to any natural disaster/ untimely accident or by any unavioidable reasons, then by the committee established at district level will trying to find out the causes and to renovate or revive the unit further decision regarding refinanceing to the unit will be considered and Interest subsidy will also be admisable as per the rules.

Monitoring And Evluation of Scheme

For successful running of the scheme and to judge the difficuluties faced by the units, hundred percent physical verification of the units will be done by the D.V.I.O., 20 percent by the Regional officers and 5 percent by the head quarter officials. Dispite this state monitoring and evaluation cell of Planning Department will also condut random survey and evaluation of the scheme from time-to-time. For monitoring and evaluation of the scheme, 01 percent of the total interest subsidy’s budget will be allocated and utilised.

Relisation

If any unit missutilised the loan amount knowingly or as per the project of the unit, nither establishing nor and running successfully, in that conditions the whole amount of loan will be realize by the bank from the unit including the interest subsidy amount given by the Government. Realised amount of the interest subsidy will be kept on U.P.K.V.I.B. Head Office by opening an account and later re-utilised fully as per the requirement in this perview.10 percent of the amount realized by the bank or the amount of interest subsidy which ever is less will be given by the bank to the U.P. Khadi & Village Industries of Board.

The progress of the past years is as follows .