Lok Sabha Question No. 232 (STARRED), answered on 2016-03-14
Subject: Promotion of Cottage Industries
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: B. SREERAMULU, BHAGWANTH KHUBA

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

## LOK SABHA STARRED QUESTION NO.*232

TO BE ANSWERED ON 14.03.2016

## PROMOTION OF COTTAGE INDUSTRIES

*232.

SHRI B. SRIRAMULU:

SHRI BHAGWANTH KHUBA:

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

(a)   the details of schemes/programmes including credit-linked programmes being presently implemented by the Government for promotion of cottage and agro-based rural industries and the number of beneficiaries benefited therefrom;

(b)   whether the Government has set up any panel to study the status of cottage and agrobased rural industries in the country;

- (c) if so, the details and the outcome thereof; and

(d) the steps taken by the Government to promote and make the said industries competitive in the global market?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI KALRAJ MISHRA)

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

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF THE LOK SABHA STARRED QUESTION No.* 232  FOR ANSWER ON 14.03.2016

(a): Ministry  of  Micro,  Small  and  Medium  Enterprises  (MSME)  through  Khadi  and Village  Industries  Commission  (KVIC)  and  Coir  Board  is  implementing  the  following schemes to promote cottage and agro-based rural industries:

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.  Since inception and up to January 2016, 3.50 lakh micro enterprises  have  been  set  up  by  utilizing  margin  money  amounting  to  Rs.7004.40  crore. 29.82 lakh jobs have been created from these units.

Coir  Udyami  Yojana  (formerly  known  as  REMOT  Scheme)  is  a  credit  linked  subsidy scheme, which provides assistance for setting up of coir units with a maximum cost of project upto Rs.10 lakhs plus working capital, which shall not exceed 25% of the project cost. The pattern of assistance is 40% as Govt. subsidy, 55% as loan from Banks and 5% as beneficiary contribution.  Scheme  is  open  to  all  individuals,  companies,  SHGs,  NGOs,  Institutes,  etc. Upto January 2016, 6166 units have been set up by utilizing subsidy amounting to around Rs.77.22 crore.

Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was launched in 2005-06  for  making  Traditional  Industries  more  productive  and  competitive  by  organizing the Traditional Industries and artisans into clusters. During 2015-16, 26 clusters have been granted  final  approval  with  a  total  project  cost  of  Rs.72  crore  benefiting  around  25000 artisans.

A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE) was launched on 18.3.2015 to promote Innovation & Rural Entrepreneurship through rural Livelihood  Business  Incubator  (LBI),  Technology  Business  Incubator  (TBI)  and  Fund  of Funds for start-up creation. During 2015-16, 22 LBIs & 2 TBIs have been approved and two LBI Centres have been operationalized at Deoria (U.P.) and Rajkot (Gujarat).

Mahila  Coir  Yojana  (a  component  of  Coir  Vikas  Yojana-CVY)  is  an  exclusive  skill development  programme  for  rural  women  artisans  in  coir  sector.    Training  is  provided  in spinning of coir yarn/various coir processing activities. The scheme envisages distribution of motorized  ratts/motorized  traditional  ratts  and  other  coir  processing  equipments  at  75% subsidy subject to a maximum amount of Rs.7500/- on successful completion of the training programme.  During the training period, the women artisans are given a stipend amounting to Rs.1000/-  per  month.    Coir  Vikas  Yojana  also  includes  Skill  Development  &  Training Programme  in  coir  sector,  Domestic  &  Export  Market  Promotion  and  Development  of Production Infrastructure.  Rs.15.69 crore has been released under CVY during 2015-16.

Market Development Assistance (MDA) Scheme was introduced w.e.f 01.04.2010 in which financial assistance is provided to institutions @ 20% of the value of production of khadi and polyvastra, to be shared among artisans, producing institutions and selling institutions in the ratio 25:30:45. Rs.147.48 crore under MDA (Khadi & Polyvastra) has been released during 2015-16.

Interest Subsidy Eligibility Certificate (ISEC) Scheme provides credit at concessional rate of interest through Banks as per the requirement of the Khadi institutions. The institutions are required to pay interest of only 4%, any interest charged by banks over 4% will be paid by Central Government through KVIC.  Rs.38.16 crore under ISEC (Khadi & Polyvastra) has been released during 2015-16.

Workshed  Scheme  for  Khadi  Artisans  was  introduced  in  2008-09  to  provide  financial assistance for construction of workshed to khadi artisans belonging to BPL category through the  khadi  institutions  with  which  the  khadi  artisans  are  associated.    This  empowers  khadi spinners and weavers to chart out a sustainable path for growth, income generation and better work  environment.  During  2015-16,  Rs.6.60  crore  has  been  released,  benefiting  1100 artisans.

Khadi Reform & Development Programme (with ADB Assistance): This scheme proposes to revitalize the Khadi sector with enhanced sustainability of Khadi and to enable KVIC to stand on its own with gradually decreasing dependence on Government Grants. M/o Finance has tied up financial aid from Asian Development Bank (ADB) amounting to US$150 million over a period of three  years for implementing a  comprehensive Khadi Reform Programme worked out in consultation with ADB and KVIC. Rs.14.85 crore has been released during 2015-16.

Strengthening infrastructure of weak Khadi institutions and assistance for marketing infrastructure:    This  scheme  provides  need-based  support  towards  the  Khadi  sector  for nursing the sick/problematic institutions elevated from 'D' to 'C' category as well as those whose production, sales and employment have been declining while they have potential to attain normalcy and to support creation of marketing infrastructure in other identified outlets. Under this scheme, financial assistance is provided to existing weak Khadi institutions for strengthening of their infrastructure and for renovation of selected khadi sales outlets. Rs.2.12 crore has been released during 2015-16.

Coir S&T  Scheme promotes scientific, technological and economic research and development  activities,  developing  new  products  &  designs,  marketing  of  coir  and  coir products in India and abroad.  It also promotes co-operative organisations among producers and manufacturers of coir sector.  Two research institutes viz; Central Coir Research Institute (CCRI),  Alleppey, and Central Institute of Coir  Technology  (CICT),  Bengaluru  are undertaking research activities on different aspects of coir industry.  Rs.3.00 crore has been released during 2015-16.

- (b): No Madam.
- (c): Does not arise.

(d): KVIC has been  granted  Deemed  Export  Promotion  Council  status  since  December 2006.    1018  Khadi  and  Village  Industries  (KVI)  Institutions  are  registered  as  members. However,  most  of  the  exports  are  through  merchant  exporters  and  not  directly  by  KVI units.5% of the Free On Board (FOB) value or Rs.10 lakh, whichever is less, is provided as incentive for KVI units which undertake Direct Exports.  In addition, KVIC and Coir Board encourages Khadi, Village Industries and Coir enterprises to participate in International Trade Fair/ Exhibitions by subsidizing 75% of the Air fare and 50% of stall rent to augment export of  their  products  in  general  subject  to  maximum  limit  of  Rs.1.25  lakh  each.    In  case  of Women entrepreneurs & institutions/ST/SC/NE States, air fare and stall rent extended to the extent of 100% subject to maximum limit of Rs.1.25 lakh each.

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