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To get back soft loans,govt plans hard move of seizing entrepreneurs’ property

The state government is considering the option of seizing assets of entrepreneurs in Pune district who have defaulted on loan repayment to the Industries department.

Written by Ishfaq Naseem | Pune | Published: April 13, 2012 2:02 am

The state government is considering the option of seizing assets of entrepreneurs in Pune district who have defaulted on loan repayment to the Industries department. There are around 1,700 entrepreneurs who have availed themselves of the soft loans totalling around Rs 17 crore. Most of the defaulters are engaged in the service and manufacturing industry.

This comes after a recovery notice issued last year by the District Industries Centre (DIC),Pune,to some 600 entrepreneurs across a range of businesses including computer and mobile reparing services and manufacturing utilities in food processing,plastic and autocomponents. Some 423 of them started making the payments after the notice and recovery under the state government’s Seed Money Scheme improved with realisation reaching Rs 1.17 crore against Rs 10-15 lakh per year earlier.

Officials,however,said it was not enough as the money to be repaid was significantly higher than recovery being made,which is why they are considering seizure of properties under the Revenue Recovery Code of 1967.

“We are contemplating seizure of properties of those not repaying the loan. We have also approached the Regional Transport Office (RTO) to prevent renewal of vehicle permits of such defaulters. We will begin seizure of property under the recovery code after involving the district collectorate in the process,” said General Manager DIC Pune,S S Survase. He added that the seizure move is being considered following heavy defaults.

On the matter of not renewing vehicle permits of defaulters,RTO Pune,Arun Yeola,said his office will only do it after they get a government directive.

Joint Director of Industries,Pune Region,M V Bhagat,however,said that recovery has been satisfactory for over a year now,owing to consistent efforts of the government to initiate recovery drives.

In spite of the loan default,the government is continuing the Seed Money Scheme to help entrepreneurs set up ventures,Survase said. Under the scheme,people domiciled in the state and aged between 18 and 50 years are eligible for the 15 percent soft loan on a project cost upto Rs 25 lakh. The soft loan incurs simple interest of only 6 percent for a period of 3 years as a concession for promotion of industrial activity.

“The state government,under the Seed Money Scheme,had specified that those who repay the loan regularly will get an additional incentive of 3 percent interest waiver annually. This was to ensure better recoveries but despite that there are defaults,” said an official.

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