Credit and Finance for MSMEs: The Modi government’s pro entrepreneurship scheme Prime Minister’s Employment Generation Programme (PMEGP) has disbursed a margin money (subsidy) of Rs 1,279.72 crore as of January 31, 2021, according to the data from the Ministry of MSME. The amount will help set-up 41,053 micro enterprises creating employment for 3,28424 people. According to the real-time data published by the Khadi and Village Industries Commission (KVIC), the margin money claimed as of February 22, 2021, stood at Rs 1,621 crore in 53,580 micro enterprise projects. The margin money disbursed till the end of January 2021 was up from 18,455 applications involving Rs 551.65 crore disbursed till September-end in the current financial year.
As of February 22, 2021, Bank of Baroda had disbursed the highest subsidy amount of Rs 143 crore across 3,402 projects followed by Rs 129 crore in 4,695 projects disbursed by Punjab National Bank, Rs 119 crore disbursed in 3,576 projects by Canara Bank, Rs 105.9 crore disbursed by State Bank of India in 4,309 projects, etc. 276 projects involving Rs 14.92 crore margin money claim were under process for disbursement, at the time of filing this report.
The credit-linked subsidy programme PMEGP offered financial support up to Rs 25 lakh for micro enterprises to be launched in the manufacturing sector and up to Rs 10 lakh for businesses in the service sector, as per the scheme’s details on the MSME Ministry portal. The scheme also supported self-help groups, institutions registered with Societies Registration Act,1860, production co-operative societies, and charitable trusts. However, existing enterprises backed by multiple schemes viz., Pradhan Mantri Rozgar Yojana, Rural Employment Generation Programme, or other central and state government schemes along with businesses that have already availed government subsidy under any other central or state governments’ schemes were not eligible to secure credit under the PMEGP.
Importantly, micro sector with 630.52 lakh estimated enterprises accounted for over 99 per cent of 633.58 lakh enterprises in the overall MSME sector, according to the MSME Ministry’s 2019-20 annual report. The gross bank credit to micro and small enterprises (MSEs) year-on-year continued to scale up steadily in September, as per the Reserve Bank of India’s January 2021 bulletin. The deployment increased 6.7 per cent from Rs 10.56 lakh crore as of September 27, 2019, to Rs 11.27 lakh crore as of September 25, 2020.