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  • 1. Annual Report 2007-2008 Chapter X PRIME MINISTER’S ROZGAR YOJANA (PMRY) AND SCHEME OF FUND FOR REGENERATION OFTRADITIONAL INDUSTRIES (SFURTI)10.1 INTRODUCTION youth in setting up micro level self-employ- ment ventures. Initially, the PMRY was im-10.1.1 In addition to the schemes/ pro- plemented only in urban areas of the coun-grammes being implemented by the Khadi try. Since 1994-95, it is being implementedand Village Industries Commission (KVIC) in both urban and rural areas. The target ofand Coir Board for the development of agro the Yojana for 2007-08 is setting up 2.75 lakhand rural industries based on local raw units thus generating an estimated 4.125 lakhmaterials and skills and for creation of in- additional employment opportunities.creased employment opportunities in ruralnon-farm sector, the Ministry is administer- 10.2.2 An educated (up to VIII standard)ing two national level schemes viz; Prime unemployed person living in any part of theMinister’s Rozgar Yojana (PMRY), a credit country is eligible under the Scheme and canlinked subsidy scheme to provide financial apply for assistance to the General Manag-assistance to less educated and poor unem- er, DIC in the district to which he belongs.ployed youth in the country; and Scheme of In cases where the applicant belongs to theFund for Regeneration of Traditional Indus- cities of Kolkata, Chennai and Mumbai, thetries (SFURTI) for development of clusters application has to be filed directly with thein khadi, village and coir sectors with a view Office of the Director of Industries and in theto make the traditional industries more pro- Office of the Deputy Commissioner of the re-ductive and competitive and increase the spective zones in case of Delhi.employment opportunities in both the ruraland semi-urban areas of the country. 10.2.3 The Task Force Committees set up at district level or the Task Force constituted10.2 PRIME MINISTER’S ROZGAR under the Scheme at Sub-divisional level/ YOJANA (PMRY) block level, have been entrusted with the job of scrutinizing the applications and in-10.2.1 The Prime Minister’s Rozgar Yojana terviewing the applicants. The names of ap-(PMRY) was launched on 02 October, 1993 plicants approved by Task Force Committeeto assist less educated and poor unemployed are sponsored by District Industries Centres 107
  • 2. MSME(DICs) to the concerned bank branches for lecting the viable projects and Training &sanction of loans. Trainers Manuals have been developed by the Ministry through Rural Development and10.2.4 In addition to sponsoring of appli- Self Employment Training Institute (RUDSE-cations by Task Force Committees(s), bank TI), Karnataka.branches themselves may also receive ap-plications directly from the eligible persons 10.2.7 Assistance from States/UTsunder the Scheme. However, such applica-tions should be sent to sponsoring agencies State/UT Governments may pro-with their observations on the viability and vide necessary infrastructure support likebankability of the projects. The sponsoring provision of industrial sites, shops and wateragencies would then formally sponsor such supply on preferential basis to the entrepre-applications back to the bank branches neurs availing benefit under the Yojana. Thefor sanction of loan. The details of eligibil- provision of sites and sheds at concessionality norms/ parameters (revised) under this rate to service ventures in urban areas willYojana are given at Annexure - 10.1 be essential for their success. Priority in electric connections and general tax con-10.2.5 Contingency Funds for Scheme cessions/incentives may also be provided to Administration the beneficiaries. Funds for contingency @ Rs. 250/-per case sanctioned, under the Scheme, are 10.2.8 Monitoring & Guidance forreleased to the concerned States/UTs from PMRY1996-97 onwards. The contingency fundsare meant for utilisation towards meeting ex- The District, being a well-estab-penditure in administering and supervising lished geographical unit for many State/PMRY at the DIC level, which includes, in- Central promotional programmes, is theter-alia, publicity, organization of workshops, basic unit for implementation of the Primemotivational and familiarization programmes Minister’s Rozgar Yojana. In all the districts,for eligible youth. District Industries Centre (DIC) is the imple- menting agency except in the metropoli- In order to provide greater flexibility tan cities of Kolkata, Mumbai and Chennaito the States/UTs in utilisation of contingen- where the Directorate of Industries is thecy funds, the expenditure norms have been implementing agency under the scheme.modified to include expenditure on training In Delhi, the applications are received inequipment/models, trainer’s fees, training the Office of the Deputy Commissioner ofcourse materials, hiring of transport, strength- the respective zones. The field agencies, inening the existing infrastructure, etc. consultation with the banks of the respec- tive areas, are responsible for formulation of10.2.6 Project Profiles self-employment plans, their implementation and monitoring under the overall guidance10.2.6.1 Project Profiles have been pre- of the District PMRY Committee. Thesepared for guidance of entrepreneurs in se- agencies are required to formulate location 108
  • 3. Annual Report 2007-2008specific plans of action, based upon realistic 10.2.11 Monitoring and Guidance atdemand assessment for various activities. Government of India Level10.2.9 Monitoring and Guidance at The Prime Minister’s Rozgar Yo- District Level jana is being monitored at the Central Gov- ernment level by the High Powered Commit- The Yojana is being monitored and tee on PMRY under the Chairmanship of theguided at district level by the District PMRY Secretary (MSME). The last review meetingCommittee under the Chairmanship of Dis- was held on 16 July 2007, besides subse-trict Collector/Deputy Commissioner. The quent review(s) by the Secretary (MSME) inCommittee is required to meet at least once different States during the a month and send monthly progress reportin the prescribed proforma to the Directorate 10.2.12 CUMULATIVE STATUS OF PROG-of Industries of the concerned State/UT . RESS UNDER PMRY DURING X PLAN AND 2007-0810.2.10 Monitoring and Guidance at State/UT Level The details of applications sanc- tioned for financial assistance and loans10.2.10.1 The monitoring and guidance for disbursed and credit flow under PMRYthe Prime Minister’s Rozgar Yojana at State/ during X Plan and for the year 2007-UT level is undertaken by the State/UT 08 (up to September 2007) are given inPMRY Committee under the Chairmanship Table 10.1of the Chief Secretary. TABLE - 10.1: Details of Targets, Applications Received, Cases Sanctioned/Disbursed: PMRY (As reported by RBI) Year Target (No.) Applica- Cases Sanctioned Cases Disbursed tions No. Amount No. Amount Received (Rs. crore) (Rs. crore) (No.) 2002-03 220000 414001 228031 1497 190521 1198 2003-04 220000 436679 264012 1679 219444 1368 2004-05 250000 491324 298003 1923 248264 1543 2005-06 250000 498751 318095 2055 273066 1701 2006-07* 255000 494257 313791 2036 261236 1632 Total 1195000 2335012 1421932 9190 1192531 7442 2007-08 275000 182664 82118 393 47061 224 (up to Sept. 2007)*Provisional 109
  • 4. MSME10.2.12.2 The State-wise estimated employ- of some of the important findings of thesement opportunities generated under PMRY three rounds of evaluation indicates:during X Plan are given at Annexure –10.2 l The share of SC/STs as well as10.2.13 BUDGETARY ASSISTANCE OBCs in the Scheme has steadily improved. The proportion of SC/STs10.2.13.1 The Central Government assists improved from about 12 per cent inthe entrepreneurs through capital subsidy the first round to 13 per cent in theand provides funds to States for entrepre- second and further to 21 per cent inneurial development, contingencies, etc. The the third round. Similar improvementdetails of budget allocations and expenditure has also been observed in respect ofincurred under the Scheme during X Plan and the share of OBCs. However, thereduring the year 2007-08 are given in Table has not been much improvement in10.2 the share of women beneficiariesTABLR - 10.2: Budget Allocation and Funds under the Scheme. Released : PMRY l The average amount of loan dis- ( Rs. crore) bursed has been increasing. It was Year Budget Funds Released Alloca- Rs. 57,000 in the second round and For Sub- For EDPs Total tion sidy Rs. 64,000 in the third round. 2002-03 169.00 152.55 15.55 168.10 l The employment generation was 2003-04 169.00 147.63 20.20 167.83 higher in the first round at 2.5 per 2004-05 218.90 190.48 27.69 218.17 unit. In the second and third rounds, 2005-06 273.46 251.36 21.11 272.47 it is found to be around 1.95 per 2006-07 252.60 228.82 19.69 248.51 functioning unit. Total 1082.96 970.84 104.24 1075.08 2007- 320.00 265.60 29.40 295.00 l The proportion of rural beneficiaries 08* has come down from 49.9 per cent*Up to December 2007 in the second round to 39.1 per cent10.2.14 EVALUATION STUDIES OF in the third round. PMRY l Assets have been created in 89.7 per cent of the cases where loans10.2.14.1 Three rounds of evaluation (first were disbursed.round conducted in 1996-97 for the pro-gramme years 1993-94 and 1994-95, sec- l About 36.4 per cent of the beneficia-ond round conducted in 2000-01 for the ries were repaying the loan install-programme years 1995-96 to 1997-98 and ment on time.the third round conducted during 2005-06for the programme years 1998-99 to 2001- l The average rate of recovery of02) of the PMRY have been undertaken by loans was 29 per cent in the secondthe Institute of Applied Manpower Research round. It improved somewhat at 38(IAMR), New Delhi. A comparative position per cent in the third round. 110
  • 5. Annual Report 2007-200810.2.15 Initiatives Taken For l Seminars to be held at the level of Strengthening PMRY each district for creating awareness of PMRY in the area in the form of10.2.15.1 Based on the recommendations pre-selection motivational cam-of the Group (June 2006) constituted un- paign. A resolution be adopted byder the Chairmanship of the Adviser (VSE), each and every Gram PanchayatPlanning Commission to review the design for giving wide publicity and spread-and implementation of the Yojana, some im- ing awareness about the Scheme inportant components, viz; enhancement in their respective jurisdictions.the family income ceiling, project cost, sub- l All the members of the Task Forcesidy, training cost reimbursement, etc. have Committee would be collectivelybeen revised in the guidelines of the PMRY responsible for selection of benefi-with effect from 2007-08. ciaries. This would ensure that the Bank Manager alone is not held re- In the quarterly schedule fixed for sponsible for the non-performing as-the year 2007-08, applications to the extent sets if any, that could arise out of theof 125 per cent of the target are targeted to loans extended under PMRY to thebe sponsored by the end of the third quar- beneficiaries.ter (100 per cent by the end of the secondquarter), so that loans could be sanctioned l No collateral shall be insisted forin 90 per cent of the sponsored cases by the PMRY loans upto Rs. 5 lakh.end of the third quarter (100 per cent by theend of 4th quarter). The quarterly schedule l SC/ST and beneficiaries from minor-further prescribes that loans would be dis- ity communities should be targetedbursed in 75 per cent cases by the end of in such a manner that they are ben-the third quarter and the loan disbursement efited, at least, in proportion to theirof the entire target of 100 per cent cases population in each District/State.would be achieved by the end of 4th quar- l Of the total target for each State/UT,ter. The RBI has also issued instructions to women beneficiaries should consti-all implementing banks reiterating the above tute at least 30 per cent.decision of the Government. l Preference may be given to devel- To improve the success rate of op clusters specializing in specificeligible applicants, a new concept of pre- products at the time of selection ofmotivational campaign has been introduced PMRY beneficiaries.w.e.f. 2007-08. Under this programme, State/ l According to the findings of the eval-UTs are allowed reimbursement of cost ofcounseling and guiding the applicants @ uation studies of PMRY, the ratio ofRs.200/- per applicant, for 125 per cent of applications received to the targetsthe allocated target. Besides, a number of was low owing to inadequate public-operational guidelines have been issued to ity of the scheme. As such aggres-make this Yojana more effective which inter- sive publicity campaigns have beenalia include: asked to be undertaken through 111
  • 6. MSME media like radio, television, cinema clusters, with the active participation slides and distribution of pamphlets, by the local stakeholders that can in addition to pre-selection motiva- help continuous undertaking of de- tional campaigns. velopment initiatives by themselves; and10.3 SCHEME OF FUND FOR RE- GENERATION OF TRADITION- Ø building up innovative and tradi- tional skills, improved technologies, AL INDUSTRIES (SFURTI) advanced processes, market intelli- gence and new models of public-pri-10.3.1 In pursuance of the declaration in the vate partnerships, so as to graduallyNational Common Minimum Programme of replicate elsewhere similar modelsthe present Government and that of the Fi- of cluster-based regenerated tradi-nance Minister in his Budget Speech of 2004- tional industries.05, announcing the setting up of a Fund for 10.3.3 SFURTI is a Central Scheme, and isRegeneration of Traditional Industries with being implemented by the Ministry (erstwhilean initial allocation of Rs. 100 crore, the Min- Ministry of Agro & Rural Industries) withoutistry launched a scheme titled “Scheme of any share of financial contribution by theFund for Regeneration of Traditional Indus- State/UTs.tries (SFURTI)” for development of around100 clusters in khadi, village and coir sec- 10.3.4 The following support measures aretors with a total cost of Rs. 97.25 crore over planned to be taken up in the selected clus-a period of 5 years (beginning 2005-06) with ters:a view to make these industries more pro-ductive and competitive and increase the l Replacement of charkhas and loomsemployment opportunities in both the rural in khadi sector.and semi-urban areas of the country. TheScheme covers an estimated 50,000 benefi- l Setting up of Common Facility Cen-ciary families. tres (CFCs). l Development of new products, new10.3.2 The objective of SFURTI is to estab- designs for various khadi and vil-lish a regenerated, holistic, sustainable and lage industry (VI) products, new/im-replicable model of integrated cluster-based proved packaging, etc.development of traditional industries in KVI l Market promotion activities.and coir sectors. This will primarily mean: l Capacity building activities, such asØ more competitive traditional in- exposure visits to other clusters and institutions, need-based training, dustries which are market-driven, support for establishment of cluster productive, profitable and provide level networks (industry associa- sustained employment for the par- tions) and other need based sup- ticipants; port.Ø strengthened local socio-economic l Other activities identified by the Im- governance system of the industry plementing Agency (IA) as may be 112
  • 7. Annual Report 2007-2008 necessary for the development of 10.3.8 The Cluster Development Executives the cluster as part of the diagnostic (CDEs) have been appointed exclusively for study and included in the Annual Ac- each cluster and are located in the cluster on tion Plan for the cluster. full time basis and responsible for implemen-10.3.5 KVIC and Coir Board are the Nodal tation of the Scheme in the assigned clus-Agencies (NAs) for implementation of the ter. The CDEs have to undergo prescribedscheme and also responsible for holding training in cluster development methodologyand disbursing funds to the identified Imple- to be organized by the NA through the TA.menting Agencies (IAs) and monitoring of The responsibilities of CDEs include con-the Scheme under the overall supervision ducting the diagnostic study, preparing andof the Scheme Steering Committee (SSC). implementing the annual action plans of theThe Secretary (MSME) is the Chairman of cluster, promoting linkages with institutions,SSC and representatives of the Planning building the local governance framework,Commission, State Bank of India, Indian etc.Bank Association and National Bank for Ag-riculture and Rural Development (NABARD) 10.3.9 By the end of December 2007, 124are the members of SSC. clusters (34 – khadi, 64 - village industries and 26 – coir) covering all the States have10.3.6 Implementing Agencies (IAs) under been approved by the SSC for their develop-SFURTI are non-Government organizations ment under SFURTI. The State wise details(NGOs), institutions of the Central and State of clusters are given at Annexure – 10.4.Governments and semi-Government institu- The other activities for development of clus-tions with suitable expertise which undertake ters like consent of State Government, train-cluster development. Generally, one IA has ing of NAs, IAs, CDEs, etc., diagnostic studybeen assigned only one cluster. The selec- report and annual action plan, etc. in most oftion of IAs, based on their regional reputa- the cases have been completed. It is expect-tion and experience of working at the grass- ed that a good number of clusters approvedroot level, has been done by the NAs, with under SFURTI will be operationalised by theapproval of SSC. end of the current financial year.10.3.7 Under this scheme, 18 reputed na- 10.3.10 The release of funds under thistional level institutions with expertise in clus- scheme will be cluster specific. The fundster development methodology have been are released directly to the Nodal Agencies,appointed as Technical Agencies (TAs) (An- which are also responsible for holding andnexure 10.3) to provide technical support to disbursing the funds, on receipt of utilizationthe NAs and the IAs. The responsibilities certificate and depending on actual physi-of the TAs also include assisting the NAs in cal progress. The funds for development ofidentification of clusters, conducting train- clusters are kept in a separate account bying of the Cluster Development Executives the NAs which will be audited. The details of(CDEs) and other officials of the IAs and the funds released to NAs since inception ofNAs, validation of cluster action plans, moni- this Scheme and funds earmarked for 2007-toring and evaluation, etc. 08, are given in Table 10.3 113
  • 8. MSME TABLE - 10.3: Funds Released: SFURTI sides providing specific professional training (Rs. crore) on cluster development to Nodal Agencies, Year KVIC Coir Board Total IAs and exposure to Technical Agencies on 2005-06 1.12 0.38 1.50 the specific needs of these sectors. Obtaining 2006-07 19.03 6.50 25.53 consent of State Governments and prepara- 2007-08* 3.44 3.25 6.69 tion of diagnostic study reports, thereafter, re- (21.00*) quired some special efforts and time. Almost*RE all the clusters are now in a take off stage and 7 clusters in KVI sector have already been launched. All coir clusters are ready to be op-10.3.11 SFURTI is the first organized and erationalised soon. The benefits are expectedsystematic attempt at introducing cluster to start flowing from 2008-09 with the installa-based development approach in rural and tra- tion of equipment and availability of other en-ditional sectors of KVI and coir. This approach visaged technical/non-technical support. Therequired considerable efforts at identification pace of expenditure under the Scheme is, ac-and short listing of clusters, IAs and CDEs be- cordingly, expected to pick up from 2008-09. 114