Centre to structure social welfare funding after NCEUS reports
The Centre is gearing up to operationalise the funding structure for social welfare of the unorganised sector, with the National Commission for Enterprises in the Unorganised Sector.
By TNN |
NEW DELHI: The Centre is gearing up to operationalise the funding structure for social welfare of the unorganised sector, with the National Commission for Enterprises in the Unorganised Sector (NCEUS) submitting its findings on the Fund’s working to Prime Minister Manmohan Singh here.
The twin reports which focus on hiking up bank funding to enterprises in the sector and the launch of new loan instruments specifically tailored for them also include separate suggestions on financing outfits that fall within the ambit of the unorganised sector.
Two legislation’s were coined by the Centre to Parliament earlier on the basis on the NCEUS’ suggestions on social security to unorganised sector workers and agriculture labour, which forms a bulk of the sector. However, the fund structure and operation aspects came in for criticism by the Left parties.
A task force set up to go into the funding for the social security operations had recommended that the corpus of the core Fund be raised to Rs 10,000 crore in the next five years. It had, to boot, emphasised on the need to coin new and specially tailored modes of financing including venture capital and credit rating. It had also suggested the issue of a Swarozgar Credit Card (SCC) on the lines of the Kisan Credit Card, with a loan limit of Rs 5 lakh.
The reports now presented to the prime minister are based on the suggestions of the task force, which had recommended that priority sector lending policy be reviewed urgently. The panel also wanted “higher credit worthy activities” like housing, transport, professional activities, and education be excluded from the list.
The rate of interest charged from the SSMEs (special sub-group of micro enterprises) should be the same as demanded from loans in the agriculture sector. The task force had suggested that banks be asked to earmark 30% of their annual incremental credit to SSMEs. These include units with an investment of less than Rs 5 lakh.
The twin reports which focus on hiking up bank funding to enterprises in the sector and the launch of new loan instruments specifically tailored for them also include separate suggestions on financing outfits that fall within the ambit of the unorganised sector.
Two legislation’s were coined by the Centre to Parliament earlier on the basis on the NCEUS’ suggestions on social security to unorganised sector workers and agriculture labour, which forms a bulk of the sector. However, the fund structure and operation aspects came in for criticism by the Left parties.
A task force set up to go into the funding for the social security operations had recommended that the corpus of the core Fund be raised to Rs 10,000 crore in the next five years. It had, to boot, emphasised on the need to coin new and specially tailored modes of financing including venture capital and credit rating. It had also suggested the issue of a Swarozgar Credit Card (SCC) on the lines of the Kisan Credit Card, with a loan limit of Rs 5 lakh.
The reports now presented to the prime minister are based on the suggestions of the task force, which had recommended that priority sector lending policy be reviewed urgently. The panel also wanted “higher credit worthy activities” like housing, transport, professional activities, and education be excluded from the list.
The rate of interest charged from the SSMEs (special sub-group of micro enterprises) should be the same as demanded from loans in the agriculture sector. The task force had suggested that banks be asked to earmark 30% of their annual incremental credit to SSMEs. These include units with an investment of less than Rs 5 lakh.
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