The Swarnajayanti Gram Swarojgar Yojna (SGSY) came into effect from 1 April 1999 in the rural areas of the country.
SGSY scheme is funded by the centre and state in the ration of 75:25 and will be implemented by commercial banks.
DRDA (District Rural Development Agencies) provides fund to those self help group who are in existence for 6 months and have demonstrated the potential of a viable group. This fund is aka revolving fund.
In case of group loan, the group is entitled to a subsidy of 50 % of the project cost, subject to per capita subsidy of Rs 10,000 or Rs 1.25 lacs whichever is less.
Loan applications under the SGSY scheme should be disposed of within the prescribed limit of 15 days and at any rate, not later than one month.
Swarojgaris are covered under the group insurance scheme. The maximum age of Swarojgaris at the time of sanction has to be kept at 60 years of age.
Insurance coverage would be for 5 years or till the loan is repaid.
For individual loans up to Rs 50,000 and group loans up to Rs 5 lacs, the assets created out of the bank loan would be hypothecated to the bank as a primary security.
In case of immovable assets (like minor irrigation, dug well, etc), the security created is mortgage. Where mortgage is also not possible, 3rd party guarantee may be obtained.
For all loans (individual or group), in addition to the hypothecation/mortgage/3rd party guarantee, suitable margin money/other collateral security in the form of an insurance policy; marketable security/deeds of other property, etc, may be obtained at the discretion of the bank.
Project cost includes bank loan plus government security.
Subsidy under SGSY scheme will be 30 % subject to a maximum of Rs 7,500.
In respect of SC/STs, Subsidy under SGSY scheme will be 50 % subject to a maximum of Rs 10,000 (per capita) or Rs 1.25 lacs whichever is less.
Banks should not charge interest on the subsidy portion of the loan amount.
All SGSY loans are medium term loans with minimum repayment period 5 years (maximum 9 years).
The SJSRY (Swarna Jayanti Shahari Rozgar Yojna) came into effect from 1 April 1997 in all urban towns in India.
The SJSRY scheme is funded by the centre and state in the ration of 75:25.
Both urban employed and urban unemployed (no age limit) youth whose annual family income is below the poverty line and have got education up to 9th standard come under SJSRY scheme.
Project cost up to Rs 50,000 is provided under the SJSRY scheme in case of an individual. Higher project costs would also be covered in the scheme provided the share of each person in the project cost is Rs 50,000 or less.
In SJSRY scheme, Subsidy would be provided at the rate of 15 % of the project cost, subject to a ceiling of Rs 7,500 per head.
Margin money is 5 % of the project cost in SJSRY scheme.
In SJSRY scheme, repayment schedule ranges from 3 to 7 years, after initial moratorium period of to 18 months (at bank’s discretion).
DWCUA (Development of Women and Children in Urban Areas) group shall consists of at least 10 urban poor women and the subsidy amount would be 50 % of the project cost of Rs.1,25,000, whichever is less.
If in DWCUA, the project cost exceeds Rs 2, 50, 000, the project cost less subsidy (Rs.1,25,000) and margin money (@ 5 % of the project cost) would be the component of the bank.
The beneficiaries under the SJSRY scheme are identified on the basis of a monthly per capita income and not by the annual family income (which is the case in SGSY scheme, refer to Point no 18).
The % of women beneficiaries under the SJSRY scheme shall not be less than 30 %.
The loans granted under the SJSRY scheme come under priority sector advances and hence loan applications for amount up to Rs 25, 000 should be disposed of within a fortnight and for credit limits above Rs 25, 000 within 8-9 weeks.
In SJSRY scheme, a loan amount of Rs 50, 000 and group loans up to Rs 3 lacs don’t require a collateral/guarantee. Besides margin, the borrower would hypothecate/mortgage/pledge to the bank the assets created out of the bank loan.
The PMRY scheme is for unemployed youth between the age of 18-35 years (10 years relaxation in case of women/PH/SC/ST), who are at least 8th standard pass.
PMRY scheme covers those unemployed educated youths whose annual family income is below 1 lac per annum and the beneficiary should be a permanent resident of the district for 3 years.
In case of SHG, PMRY scheme gives subsidy per beneficiary Rs 12,500 subject to a maximum ceiling of Rs 1.25 lacs.
In PMRY scheme, bank’s margin money varies from 5 to 12.5 % of the project cost so that the
total of subsidy and margin money is equal to 20 % of the project cost.
The project cost in PMRY scheme is restricted to Rs 2 lacs for business sector and Rs 5 lacs for industry sector.
Margin money in PMRY scheme is 5 to 16.25 % (except in north-eastern states, HP, J&K, Uttaranchal, where it varies from 5 to 12.5 %) of the project cost so as to make the total of subsidy and margin money equal to 20 % of the project cost.
In PMRY scheme, subsidy eligible is 15 % of the project cost, subject to a maximum of Rs 12,500 per borrower in states other than north-eastern states, HP, J & K, Uttaranchal.
In PMRY scheme, the borrower has to hypothecate/mortgage/pledge to the bank assets. The borrowers will not have to give a collateral security under the industry sector projects with the cost up to Rs 2 lacs (for business sectors) and up to Rs 1 lac for service sectors.
The exemption from collateral is limited to Rs 1 lac per person in case of a partnership in PMRY scheme.
PMRY loans have repayment period from 3 to 7 years after an initial moratorium.
In joint ventures/partnerships, the total project cost should not exceed Rs 10 lacs.
In SHG, there may be 5-20 educated unemployed youths and there is no upper ceiling on loan.
The exemption from collateral security is Rs 5 lac per borrower in industry sector whereas the exemption is Rs 1 lac per member in services and industry sector.
SLRS (Scheme of Liberation and Rehabilitation of Scavengers) was launched on 22 Mar 1992 and the project cost is limited to Rs 50,000 (the banks would give 32,500, subsidy would be 10,000, and 7,500 would be margin money from Scheduled Caste Development Corporations aka SCDC) per head. Margin money is up to 15 % of the project cost and rate of interest 4 %.
Under the SLRS scheme, the subsidy would be 50 % of the project cost with a ceiling of Rs.10,000.
Loans up to Rs 6,500 are treated as loans under DRI scheme and rate of interest is 4 %. If the loan sanctioned/disbursed is more than Rs 6,500 such loans will attract a rate of interest according to the RBI directive.
In SLRS scheme, the security for the loan will only be the hypothecation of the assets. The repayment period is 3-7 years.
Loan amount up to Rs 25,000 under SLRS scheme should be disposed of within a fortnight and for amount exceeding Rs 25,000 within 8-9 weeks.