With a little over a year to go for the Assembly elections in the state, the Akhilesh Yadav government has come up with one of its major schemes – Chief Minister Employment Generation Programme (CMEGP) — targetting the trader community.
The scheme, which seems heavily inspired by the Prime Minister Employment Generation Programme launched by the UPA government in 2008, aims to promote small scale industries where any person holding Rs 1 lakh can start a business worth Rs 25 lakh, with major financial assistance to be arranged by the state government.
This will become the first instance of a ‘direct financial assistance’ from the government to the entrepreneurs in the state.
CMEGP will be launched by the department of micro, small and medium entrepreneur (MSME) & export promotion. The government has instructed the state finance department to include the scheme in its preparation of the annual budget for 2016-2017, which will be tabled next year, and which, significantly, will be the final financial paper presented by the Akhilesh Yadav government before the state goes to polls.
“The proposal has been accepted and CMEGP will be launched soon. It will be more liberal than the PMEGP and, for the first time, benefit the state entrepreneurs directly,” Nitin Agarwal, minister of state (Independent charge) MSME and export promotion, told The Indian Express.
Under the scheme, the government will provide 90 per cent of the margin money (or borrowed money), which it has fixed at 35 per cent (Rs 8.75 lakh) of the total project cost (Rs 25 lakh). Therefore, a person with Rs 87,500 in his possession can start a business whose value could be up to Rs 25 lakh as the government will directly fund Rs 7,87,500.
For the remaining amount, the government will help arrange a loan from the bank, if required. The margin money will be directly transferred to the bank account.
State MSME department hopes that projects taken up under CMEGP will raise employment opportunities as well, with the government expecting at least five such job creation through these new units. The department plans to set up at least 10 units in every district, which would mean 750 units across the state. “There is possibility of expansion in these units and most of these will be based on rural economy. Once successful, they will also become role model for others,” Agarwal said.
The UPA government had launched the PMEGP in 2008 to provide financial assistance for setting up of micro enterprises each costing upto Rs10 lakh in service sector and Rs 25 lakh in manufacturing sector.
The assistance is provided in the form of subsidy upto 25 per cent (35 per cent for special category including weaker sections) of the project cost in rural areas while it is 15 per cent (25 per cent for special category) for urban areas.