Modi government has closed credit linked subsidy scheme, losses to small traders

The Central Government has given another blow to small businessmen after the note-offs and GST. The government has stopped the credit-linked capital subsidy scheme given to small businessmen. It is being told that the banks have a liability of about Rs 1300 crore on the government, so this scheme has been closed. However, the government is saying that the scheme is being reviewed and it will be started. On the contrary, the government has not been taking any applications for the scheme for the last nine months.

The Central Government's Ministry of Micro, Small and Medium Enterprises (MSME) introduced the Credit Linked Capital Subsidy Scheme for Technology Upgradation in 2000-01.

What was the scheme?

Under this scheme, a subsidy of 15% (Rs 15 lakh) would be given to MSME for taking a loan up to Rs. 1 crore.

This loan was given to those taxpayers who upgraded the technology to increase their business.

The benefit of this scheme was already being given to identification 51 products and sub-sectors.

Why the closed scheme?

A senior official of the Ministry of MSME told http://moneybhaskar.com on condition of anonymity that in fact, for the last several years, the subsidy money was not being given to the banks. About 1300 crore rupees have been owed to the Ministry of MSME of the banks. In such a situation, when the budget of the entire ministry is between 3 to 4000 crores, then the decision was taken to close the scheme due to which the ministry could give so much money. He said that the hope of restarting the scheme is very low.

FISME scheme expected to start

General Secretary of Federation of Indian Micro, Small and Medium Enterprises (FISME), Anil Bhardwaj told moneybhaskar.com that this has been talked about in the ministry. Officials have said that the scheme will be restarted again. He hoped that the scheme would start soon.

What was the advantage?

This scheme was extremely beneficial for small businessmen. The businessman who used to invest in technology to upgrade his product or service. If he used to take a loan, he would get 15 percent subsidy.

According to the Annual Report of the Ministry of MSME 2016-17, a subsidy of 987.72 crore rupees was released to 15 thousand 684 businessmen between 2014 to 2016 (till December 31, 2016) under the Credit Linked Capital Subsidy Scheme.