The Government of Maharashtra has approved the introduction of a new credit linked subsidy programme called Chief Minister Employment Generation Programme (CMEGP) for generation of employment opportunities through establishment of Micro & Small Enterprises (project cost limited to Rs. 50 lacs) in rural as well as urban areas in the state.
Quantum and Nature of Financial Assistance and funding under CMEGP:
Categories of beneficiaries under CMEGP
Beneficiary’s Contribution (of project cost)
Rate of subsidy (of project cost)
Area (location of project/unit)
1) General Category
2) Special Category (includes SC / ST /Women/ Ex-servicemen/ differently abled)
(1) The maximum cost of the project/unit admissible under manufacturing sector is Rs.50 lakh.
However, if the actual project cost is higher than the prescribed limit and the applicant seeks to become eligible under the scheme by manipulation (by reducing the cost of project) then such projects/units will not be considered.
(2) The maximum cost of the project/unit admissible under service, Agro-based/Primary Agro processing sector, E-vehicle based goods transport and other businesses, single brand service ventures (single brand-based chains, mobile service ventures) is Rs.10 lakhs.
(3) Beneficiary’s Contribution in the project cost will be 5% to 10 % as per the Categories of Beneficiaries under CMEGP scheme and balance amount of the total project cost will be provided by Banks as term loan.
1) The Bank will sanction loan of 90% of the project cost in case of General Category of beneficiary/institution and 95% in case of special category of the beneficiary/institution and disburse full amount suitably for setting up of the project. The term loan disbursement shall either be one-time or phase wise depending upon the nature of the project.
2) Bank will finance Capital Expenditure in the form of Term Loan and Working Capital in the form of cash credit. Project can also be financed by the Bank in the form of Composite Loan consisting of Capital Expenditure and Working Capital.
3) Though Banks will claim Margin Money (subsidy) based on sanction of Capital & working capital expenditure of the project, the Margin Money (subsidy) if claimed in excess, must be refunded immediately to DOI, after the final disbursement.
4) Working Capital component should be utilized in such a way that at one point of stage it touches 100% limit of Cash Credit within three years of lock in period of Margin Money and not less than 75% utilization of the sanctioned limit. If it does not touch aforesaid limit, proportionate amount of the Margin Money (subsidy) is to be recovered by the Bank/Financial Institution and refunded to the DOI at the end of the third year.
5) Rate of interest and repayment schedule – Normal prevailing rate of interest shall be charged. Repayment schedule may range between 3 to 7 years after an initial moratorium as may be prescribed by the concerned bank/financial institution. It has been observed that banks have been routinely insisting on credit guarantee coverage irrespective of the merits of the proposal. The proposal financed under the scheme has to be covered under Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) of Govt. Of India and the State Government has collaborated with CGTMSE for the necessary coverage under the scheme.
The scheme includes few important points which must be kept in mind viz:
1) For project/units cost between Rs.10 lakh to Rs.25 lakhs, the required educational criteria for the applicant is minimum 7th standard pass and for project/units above Rs.25 lakh the required educational criteria for the applicant is minimum 10th standard pass. The applicants should also preferably possess respective / relevant skills required for the project.
2) Assistance under the Scheme is available only for new projects/ventures.
3) Existing Units and units that have availed benefit under PMRY, REGP, PMEGP or any other subsidy linked scheme of Government of India or State Government and also units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible under the scheme
4) Only one person from the family is eligible for obtaining financial assistance for setting up of projects under CMEGP. The “family” includes self and spouse.
5) Any individual between 18 to 45 years of age. For Special category (including SC/ST/Women/Ex-servicemen/Differently abled) age is relaxed by 5 years.
1) Cost of the land should not be included in the Project cost. Cost of the ready built-up workshed/gala/workshop is admissible subject to maximum 20% of the total project cost.
2) Project cost will include Capital Expenditure (except cost of land) and one cycle of Working Capital. Projects without Capital Expenditure are not eligible for financing under the Scheme. Projects costing more than Rs.5 lakh, which do not require working capital, need clearance from the Regional Office or Controller of the Bank’s Branch and the claims are required to be submitted with such certified copy of approval from Regional Office or Controller, as the case may be.
3) For Service sector & Agro based activities as specified above, new projects Work-shed/shop the maximum cost eligible is limited to 20% of total project cost whereas maximum working capital for such projects will be limited to a maximum of 30% of the total project cost.
The objective of the scheme is to establish 1,00,000 Micro and Small Enterprises in the next five years and achieve employment opportunities to 8-10 lakh youth in the State. The target for the first financial year 2019-20 is to establish 10,000 enterprises in the State.