Lok Sabha Question No. 368 (STARRED), answered on 2019-01-07
Subject: Agro-based Industries
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Sunil Kumar Jakhar

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA STARRED QUESTION NO. *368 TO BE ANSWERED ON 07.01.2019

## AGRO-BASED INDUSTRIES

## *368.       SHRI SUNIL JAKHAR:

Will the Minister  of  MICRO,  SMALL  AND MEDIUM ENTERPRISES be pleased to state:

- (a) whether  the  agro-based  industries  have  been  included  in  the  Micro,  Small  and Medium  Enterprises  (MSMEs)  policy  to  develop  the  agriculture  sector  and  if  so,  the details thereof;
- (b) whether the Government proposes to set up agro-based MSMEs in those districts of Punjab which are adjoining the international border and if so, the details thereof; and
- (c) whether the Government proposes to  do  away  with  the  condition  of  an  amount upto  one  crore  rupee  investment  for  inclusion  of  agro-based  industries  in  MSME schemes and if so, the details thereof?

## ANSWER

## MINISTER OF STATE (INDEPENDENT CHARGE) FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI GIRIRAJ SINGH)

- (a) to (c): A statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) to (c) OF THE LOK SABHA STARRED QUESTION No.*368 FOR ANSWER ON 07.01.2019

- (a): Agro-based  industries,  except  farming,  have  been  included  in  the  Micro,  Small and Medium Enterprises (MSMEs) under the following categories:
- I. Agro Based & Food Processing Industry (ABFPI),
- II. Forest Based Industry (FBI)
- III. Handmade Paper & Fibre Industry (HMPFI).
- IV. Coir Industry.

Ministry  of  MSME  is  implementing  the  following  schemes  through  Khadi  and Village  Industries  Commission  (KVIC)  and  Coir  Board  for  promotion  of  Agro-based Industries in the country:

- i)  Prime  Minister's  Employment  Generation  Programme  (PMEGP)  is  a  credit  linked subsidy  scheme,  for  setting  up  of  new  micro-enterprises  and  to  generate  employment opportunities in rural as well as urban areas of the country through KVIC, State Khadi & Village Industries Board (KVIB) and District Industries Centre (DIC).  General category beneficiaries can avail of margin money subsidy of 25% of the project cost in rural areas and  15%  in  urban  areas.  For  beneficiaries  belonging  to  special  categories  such  as SC/ST/Women/PH/Minorities/Ex-Servicemen/NER,  the  margin  money  subsidy  is  35% in rural areas and 25% in urban areas. The maximum cost of projects is Rs.25 lakh in the manufacturing sector and Rs.10 lakh in the service sector.
2. ii)  Scheme  of  Fund  for  Regeneration  of  Traditional  Industries  (SFURTI)from  2005-06 for  making  Traditional  Industries  more  productive  and  competitive  by  organizing  the Traditional Industries and artisans into clusters. The Scheme envisages providing needbased assistance for replacement of production equipment, setting up of common facility centres (CFC), product development, quality improvement, improved marketing, training and capacity building etc.
3. iii) A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE) was launched on 18.3.2015 to promote Innovation and Rural Entrepreneurship through rural  Livelihood  Business  Incubator  (LBI),  Technology  Business  Incubator  (TBI)  and Fund of Funds for start-up creation.

The following Schemes, being implemented by the Development Commissioner of MSME's Office also promote MSMEs including agro-based industries:

- i) Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE):

Credit guarantees are provided for extending collateral free lending to Micro and Small Enterprises  through  banks  and  financial  institutions  (including  Non-Banking  Financial Company (NBFC)). The Scheme covers collateral free credit facility (term loan and/ or working  capital)  extended  by  eligible  lending  institutions  up  to  Rs.  200  lakh  per borrowing unit. The guarantee cover provided is up to 75% of the credit facility upto Rs. 50 lakh (85% for loans up to Rs. 5 lakh provided to micro enterprises, 80% for MSEs owned / operated by women and all loans to NER) with a uniform guarantee at 50% of the credit exposure above Rs. 50 lakh and up to Rs.200 lakh.

- ii)  Credit  Linked  Capital  Subsidy  Scheme  (CLCSS):  provides  for  capital  subsidy  on financial assistance availed by Micro and Small Enterprises for Technology Upgradation. Maximum assistance amount covered for subsidy is Rs. 1.00 crore.
- iii)  Micro  &  Small  Enterprises-Cluster  Development  Programme  (MSE-CDP):  This Scheme  envisages  adoption  of  Cluster Development  approach  for  enhancing  the productivity  and  competitiveness  as  well  as  capacity  building  of  Micro  and  Small Enterprises (MSEs).
- (b): There is no separate Scheme for setting up of agro-based MSMEs in the districts adjoining the international border. However, under PMEGP, micro units set-up in border areas are covered as special category and are entitled for higher rate of subsidy.
- (c): There is no such plan to do away with the condition of an amount upto one crore rupee investment for inclusion of agro-based industries in MSME Schemes. The Credit Linked  Capital  Subsidy  Scheme  (CLCSS)  facilitates  technology  upgradation  in  Micro and  Small  Enterprises  (MSEs)  by  providing  capital  subsidy  of  15  %  (limited  to maximum of Rs. 15.00 lakh) on institutional finance availed by them. Maximum limit of eligible  loan  for  investment  in  approved  plant  &  machinery  is  upto  Rs.1.00  crore  for induction of well-established and improved technologies. This also includes agro-based industries under the following categories:
- I. Industry based on Medicinal and Aromatic plants
- II. Food Processing (including Ice Cream manufacturing)
- III. Agricultural Implements and Post Harvest Equipment
- IV. Khadi and Village Industries
- V. Coir and Coir Products

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