District-level clearance norms for MSME scheme relaxed

New Delhi: In a bid to speed up project implementation under the Prime Minister’s Employment Generation Programme (PMEGP) when Covid-19 has impacted all sectors, the Ministry of Micro, Small and Medium Enterprises has done away with district-level approval systems and eased procedures to help fund enterprises.

Under PMEGP, loans of up to Rs 25 lakh are given for manufacturing projects while as Rs 10 lakh is given for the business and service sector. The Khadi and Village Industries Commission (KVIC), which implements the programme, subsidises 15% to 35% of a project’s cost, depending on the classification of the area where the project has been proposed.

So far, the proposals were scrutinised by a district-level task force headed by the district collector. Since district collectors are often busy with administrative duties, there had been considerable delays in sanctioning projects.


KVIC chairman Vinai Kumar Saxena took up the matter with MSME minister Nitin Gadkari earlier this month. In light of the impact of the pandemic on employment and entrepreneurship, Gadkari is said to have considered the matter on priority and approved a simplified procedure this week.

According to the amended guidelines issued on April 28, the KVIC will now directly clear the proposals and applications of prospective entrepreneurs and forward them to banks for taking credit decisions.

The MSME ministry issued a notification that said the role of the district-level task force “as constituted under Clause 11.9 of the Scheme guidelines, may be discontinued for recommendation of proposals/applications to the financing banks.”

All pending applications have been moved out of the task force’s purview and sent ahead to banks for processing them.

The ministry also ordered that all PMEGP applications presently pending at the task force level “may also be withdrawn by the implementing agencies and forwarded to the banks immediately for taking credit decisions.”

The KVIC, in association with the Bankers Association of India, will also develop a scoring sheet that will be uploaded on the PMEGP E-portal to allow applicants to check the status of their applications, making the process transparent.