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Budget 2015 Excerpts : – Major New schemes

1. Micro Units Development Refinance Agency (MUDRA) Bank

Government has planned to set up a Micro Units Development and Refinance Agency (MUDRA) Bank through a statutory enactment. This Bank would be responsible for regulating and refinancing all Micro-finance Institutions (MFI) which are in the business of lending to micro/small business entities engaged in manufacturing, trading and services activities. The Bank would partner with state level/regional level co-ordinators to provide finance to Last Mile Financer of small/micro business enterprises.

The MUDRA Bank would primarily be responsible for –

  • Laying down policy guidelines for micro/small enterprise financing business
  • Registration of MFI entities
  • Regulation of MFI entities
  • Accreditation /rating of MFI entities
  • Laying down responsible financing practices to ward off indebtedness and ensure proper client protection principles and methods of recovery
  • Development of standardised set of covenants governing last mile lending to micro/small enterprises
  • Promoting right technology solutions for the last mile
  • Formulating and running  a Credit Guarantee scheme for providing guarantees to the loans which are being extended to micro enterprises
  • Creating  a good architecture of Last Mile Credit Delivery to micro businesses under the scheme of Pradhan Mantri Mudra Yojana.

A sum of Rs 20,000 crores would be allocated to the  MUDRA Bank from the money available from shortfalls of Priority Sector Lending for creating a Refinance Fund to provide refinance to the Last Mile Financers.

Another Rs 3,000 crore would be provided to the MUDRA Bank from the budget to create a Credit Guarantee corpus for guaranteeing loans being provided to the micro enterprises.

The above measures would not only help in increasing access of finance to the unbanked but also bring down the cost of finance from the last Mile Financers to the micro/small enterprises, most of which are in the informal sector.

2. National Investment and Infrastructure Fund (NIIF)

  • Initial corpus of Rs.20,000 crore will be ensured for the NIIF.
  • This will enable the trust to raise debt, and in turn, invest as equity, in infrastructure finance companies such as Indian Railway Finance Corporation and National Housing Bank.
  • These companies with stronger equity base, in turn, will raise more debt to invest in infrastructure.

3. Pradhan Mantri Krishi Sinchai Yojana

• Aimed at ensuring access to water to every farm (“Har Khet Ko Pani”) and improving water use efficiency (“Per Drop More Crop”).

•  Total allocation to PMKSY for 2015-16 has been budgeted at Rs 5,300 crore, which includes Rs 1,800 crore towards micro-irrigation.

•  Provide end-to-end solutions in the irrigation supply chain, including the water source, the distribution network and farm-level application.

4. Paramparagat Krishi Vikas Yojana

• In order to improve soil health, this scheme has been launched to support organic farming.

•  Objective is to promote eco-friendly concept of cultivation reducing the dependency on agro-chemicals and fertilizers and to optimally utilize the locally available natural resources for input production.

• Allocation of Rs 300 crore.

5. Pravasi Kaushal Vikas Yojana

• Pravasi Kaushal Vikas Yojana aims to enhance employability of Indian Youth abroad and move them up the wage-chain by providing training and certification which will be internationally recognized.

6. Skill Development Initiatives

• The Rs 1,500 crore allocated under the Deen Dayal Upadhyay Gramin Kaushal Yojana for skilling rural youth will help skill development penetrate deeper into the country’s landscape.

• Rs 1,350 crore allocated for National Skill Certification and Monetary Reward Scheme (STAR Scheme) will go a long way in helping those who wish to acquire a skill but need financial support.

• Rs 150 crore allocated under Kaushal Vikas Yojana will also provide essential fillip to the Skill Development initiatives in the country.

7. Self-Employment and Talent Utilization ( SETU )

• SETU will be a Techno-Financial, Incubation and Facilitation Programme to support all aspects of start up businesses, and other self-employment activities, particularly in technology-driven areas.

• An amount of Rs.1000 crore is being set up initially in NITI Aayog for SETU.

• Concerns such as a more liberal system of raising global capital, incubation facilities in our centres of excellence, funding for seed capital and growth, and ease of Doing Business etc need to be addressed to create lakh of jobs and hundreds of billion dollars in value. SETU is being set up to meet this objective.

8. Van Bandhu Kalyan Yojana

• Scheme for  holistic development of Tribal communities. Focuses on bridging infrastructural gaps and gap in human development indices between Schedule tribes and other social groups. VKY also envisages to focus on convergence of different schemes of development of Central Ministries/Departments and State Governments with outcome oriented approach.

• Initial corpus 100 cr.

• Scheme has already been launched on pilot basis in one block each of the States of Andhra Pradesh, Madhya Pradesh, Himachal Pradesh, Telangana, Orissa, Jharkhand, Chattisgarh, Rajasthan, Maharashtra and Gujarat.

9. Atal Innovation Mission (AIM)

• AIM will be an Innovation Promotion Platform under NITI Aayog involving academics, entrepreneurs and researchers. It will draw upon national and international experiences to foster a culture of innovation, R&D and scientific research in India.The platform will also promote a network of world-class innovation hubs and Grand Challenges for India.

• Initially a sum of Rs.150 crore has been earmarked for this purpose.

10. Nai Manzil

• An integrated education and livelihood scheme called ‘Nai Manzil’ will be launched this year to enable minority youth who do not have a formal school-leaving certificate to obtain one and find better employment.

• It is billed as a bridge course to bridge the academic and skill development gaps.

There are several other schemes whose guidelines have not been issued yet. In due course of time, as and when it’s up in public domain, I’ll update it.