Guidelines on Rural Employment Generation Programme (Margin Money Scheme)
Andhra Pradesh Khadi and Village Industries Board is a statutory organization destined to generate employment in rural areas by promoting rural and cottage industries.
Applicable to all a new village industry projects set up in rural area. Any extension or renovation of existing unit will not be eligible for this facility.
All activities, which do not appear in the Negative List, are eligible. Village Industry means any industry located in rural area which produces any goods or renders any service with or without the use of power and in which fixed investment per head of any artisan or a worker does not exceed Rs.50, 000/-.
Activities under Negative List (not eligible for Margin Money under REGP) are
A) Meat (processing, canning and/or serving and intoxicant items (production/manufacture/sale)
B) Cultivation of Crops/Plantation, Animal Husbandry, Pisces-culture, Piggery, Poultry, etc and Khadi & Poly-vasthra
C) Any Project causing environmental problems
D) Sale of intoxicant items such as Beedi/Pan/Cigeratte/Cigar etc., serving of liquor, Tapping & Toddy for sale.
E) Rural transportation
Other than negative list, any project can be established which fulfills the prerequisites of a village industry.
1. Individual artisans/entrepreneurs
2. Institutions, Coop Societies and Trusts and
3. Self Help Groups.
Partnership firms, Private limited companies, joint ventures, joint borrowers, co-obligators or Hindu undivided Families are not eligible.
Ceiling Limit of the Project
For individuals/institutions, the ceiling limit is Rs.25.00 lakhs.
1 Any area classified as Village as per the revenue records of the State/U.T irrespective of the population.
2 It also includes an area even if classified as town, provided its population does not exceed 20,000 (as per 1991 census)
Participating Banks under the purview of AP Khadi & Village Industries Board
1 State Bank of India & its sponsored Grameena Banks
2. Central Bank of India
3. Vijaya Bank
4. Indian Overseas Bank
5. Andhra Bank and its sponsored Grameena Banks
6. Union Bank of India
7. Bank of Maharashtra
8. Dena Bank
9. District Coop Banks
10. Private Scheduled Commercial Banks
Note: The rest of the nationalized banks are under the purview of Khadi & Village Industries Commission, a GOI organization.
Up to Rs.10.00 lakhs, 25% (for O.C. men) or 30% (for weaker sections beneficiaries namely SC/ST/OBC/Women/PH/Ex Servicemen and Minorities beneficiary/institution and for Hill, Border and Tribal Areas) of the project cost will be provided as Margin Money i.e. Rs.2.5 lakhs and Rs.3.00 lakhs. For projects above Rs.10.00 lakhs and upto Rs.25.00 lakhs, the margin money of Rs.2.5 lakhs and Rs.3.00 lakhs remains the same.
The borrower is required to invest his "own contribution" of 10% of the project cost. In case of the above-enumerated categories the contribution will be only 5% of the project cost. This should be deposited in the Bank for implementation.
Quantum of loan
Banks will sanction up to 90% of the project cost in case of general category borrower and up to 95% of the project cost in case of weaker section beneficiary/institution and disburse full amount of the loan. Cost of land should not be included in the project cost
Time limit for applying to Margin Money
The Entrepreneur/beneficiary shall have availed loan from any Bank and shall apply for subsidy within 15 days from the date of release of 1 st installment of Bank Loan.
Payment of Margin Money as Subsidy
After the sanction of the credit facility by the Bank branch and release of 1st installment, on receipt of proposals through District Khadi Board Officer in eligible amount of margin money will be sanction which is to be kept in Term Deposit of 2 years in the names of the borrower at the lending bank branch only and credited to the borrower's loan account after a period of two years from the date of first disbursement of loan or deposit of margin money, normally which ever is late.
This conversion of margin money into subsidy is called Middle-ended Subsidy.