Annual Report 2007-2008
Chapter X
PRIME MINISTERS ROZGAR
YOJANA (PMRY) AND SCHEME OF
FUND FOR REGENERATION OF
TRADITIONAL INDUSTRIES (SFURTI)
10.1 INTRODUCTION
10.1.1 In addition to the schemes/ pro-
grammes being implemented by the Khadi
and Village Industries Commission (KVIC)
and Coir Board for the development of agro
and rural industries based on local raw
materials and skills and for creation of in-
creased employment opportunities in rural
non-farm sector, the Ministry is administer-
ing two national level schemes viz; Prime
Ministers Rozgar Yojana (PMRY), a credit
linked subsidy scheme to provide financial
assistance to less educated and poor unem-
ployed youth in the country; and Scheme of
Fund for Regeneration of Traditional Indus-
tries (SFURTI) for development of clusters
in khadi, village and coir sectors with a view
to make the traditional industries more pro-
ductive and competitive and increase the
employment opportunities in both the rural
and semi-urban areas of the country.
10.2 PRIME MINISTERS ROZGAR
YOJANA (PMRY)
10.2.1 The Prime Ministers Rozgar Yojana
(PMRY) was launched on 02 October, 1993
to assist less educated and poor unemployed
107
youth in setting up micro level self-employ-
ment ventures. Initially, the PMRY was im-
plemented only in urban areas of the coun-
try. Since 1994-95, it is being implemented
in both urban and rural areas. The target of
the Yojana for 2007-08 is setting up 2.75 lakh
units thus generating an estimated 4.125 lakh
additional employment opportunities.
10.2.2 An educated (up to VIII standard)
unemployed person living in any part of the
country is eligible under the Scheme and can
apply for assistance to the General Manag-
er, DIC in the district to which he belongs.
In cases where the applicant belongs to the
cities of Kolkata, Chennai and Mumbai, the
application has to be filed directly with the
Office of the Director of Industries and in the
Office of the Deputy Commissioner of the re-
spective zones in case of Delhi.
10.2.3 The Task Force Committees set up
at district level or the Task Force constituted
under the Scheme at Sub-divisional level/
block level, have been entrusted with the
job of scrutinizing the applications and in-
terviewing the applicants. The names of ap-
plicants approved by Task Force Committee
are sponsored by District Industries Centres
MSME
(DICs) to the concerned bank branches for
sanction of loans.
10.2.4 In addition to sponsoring of appli-
cations by Task Force Committees(s), bank
branches themselves may also receive ap-
plications directly from the eligible persons
under the Scheme. However, such applica-
tions should be sent to sponsoring agencies
with their observations on the viability and
bankability of the projects. The sponsoring
agencies would then formally sponsor such
applications back to the bank branches
for sanction of loan. The details of eligibil-
ity norms/ parameters (revised) under this
Yojana are given at Annexure - 10.1
10.2.5 Contingency Funds for Scheme cessions/incentives may also be provided to
Administration
10.2.5.1 Funds for contingency @ Rs. 250/-
per case sanctioned, under the Scheme, are
released to the concerned States/UTs from
1996-97 onwards. The contingency funds
are meant for utilisation towards meeting ex-
penditure in administering and supervising
PMRY at the DIC level, which includes, in-
ter-alia, publicity, organization of workshops,
motivational and familiarization programmes
for eligible youth.
10.2.5.2 In order to provide greater flexibility
to the States/UTs in utilisation of contingen-
cy funds, the expenditure norms have been
modified to include expenditure on training
equipment/models, trainers fees, training
course materials, hiring of transport, strength-
ening the existing infrastructure, etc.
10.2.6 Project Profiles
10.2.6.1 Project Profiles have been pre-
pared for guidance of entrepreneurs in se-
108
lecting the viable projects and Training &
Trainers Manuals have been developed by
the Ministry through Rural Development and
Self Employment Training Institute (RUDSE-
TI), Karnataka.
10.2.7 Assistance from States/UTs
10.2.7.1 State/UT Governments may pro-
vide necessary infrastructure support like
provision of industrial sites, shops and water
supply on preferential basis to the entrepre-
neurs availing benefit under the Yojana. The
provision of sites and sheds at concessional
rate to service ventures in urban areas will
be essential for their success. Priority in
electric connections and general tax con-
the beneficiaries.
10.2.8 Monitoring & Guidance for
PMRY
10.2.8.1 The District, being a well-estab-
lished geographical unit for many State/
Central promotional programmes, is the
basic unit for implementation of the Prime
Ministers Rozgar Yojana. In all the districts,
District Industries Centre (DIC) is the imple-
menting agency except in the metropoli-
tan cities of Kolkata, Mumbai and Chennai
where the Directorate of Industries is the
implementing agency under the scheme.
In Delhi, the applications are received in
the Office of the Deputy Commissioner of
the respective zones. The field agencies, in
consultation with the banks of the respec-
tive areas, are responsible for formulation of
self-employment plans, their implementation
and monitoring under the overall guidance
of the District PMRY Committee. These
agencies are required to formulate location
 Annual Report 2007-2008

specific plans of action, based upon realistic 10.2.11 Monitoring and Guidance at
demand assessment for various activities. Government of India Level

10.2.9 Monitoring and Guidance at
District Level
10.2.9.1 The Yojana is being monitored and
guided at district level by the District PMRY
Committee under the Chairmanship of Dis-
trict Collector/Deputy Commissioner. The
Committee is required to meet at least once
in a month and send monthly progress report
in the prescribed proforma to the Directorate
of Industries of the concerned State/UT . RESS UNDER PMRY DURING X
10.2.10 Monitoring and Guidance at
State/UT Level
10.2.10.1 The monitoring and guidance for
the Prime Ministers Rozgar Yojana at State/
UT level is undertaken by the State/UT
PMRY Committee under the Chairmanship
of the Chief Secretary.
10.2.11.1 The Prime Ministers Rozgar Yo-
jana is being monitored at the Central Gov-
ernment level by the High Powered Commit-
tee on PMRY under the Chairmanship of the
Secretary (MSME). The last review meeting
was held on 16 July 2007, besides subse-
quent review(s) by the Secretary (MSME) in
different States during the period.
10.2.12 CUMULATIVE STATUS OF PROG-
PLAN And 2007-08
10.2.12.1 The details of applications sanc-
tioned for financial assistance and loans
disbursed and credit flow under PMRY
during X Plan and for the year 2007-
08 (up to September 2007) are given in
Table 10.1

TABLE - 10.1: Details of Targets, Applications Received, Cases Sanctioned/Disbursed: PMRY

(As reported by RBI)

Year Target (No.) Applica- Cases Sanctioned Cases Disbursed
tions No. Amount No. Amount
Received (Rs. crore) (Rs. crore)
(No.)
2002-03 220000 414001 228031 1497 190521 1198
2003-04 220000 436679 264012 1679 219444 1368
2004-05 250000 491324 298003 1923 248264 1543
2005-06 250000 498751 318095 2055 273066 1701
2006-07* 255000 494257 313791 2036 261236 1632
Total 1195000 2335012 1421932 9190 1192531 7442
2007-08 275000 182664 82118 393 47061 224
(up to Sept.
2007)
*Provisional

109
MSME

10.2.12.2 The State-wise estimated employ- of some of the important findings of these
ment opportunities generated under PMRY three rounds of evaluation indicates:
during X Plan are given at Annexure 10.2
l The share of SC/STs as well as
10.2.13 BUDGETARY ASSISTANCE OBCs in the Scheme has steadily
improved. The proportion of SC/STs
10.2.13.1 The Central Government assists improved from about 12 per cent in
the entrepreneurs through capital subsidy the first round to 13 per cent in the
and provides funds to States for entrepre- second and further to 21 per cent in
neurial development, contingencies, etc. The the third round. Similar improvement
details of budget allocations and expenditure has also been observed in respect of
incurred under the Scheme during X Plan and the share of OBCs. However, there
during the year 2007-08 are given in Table has not been much improvement in
10.2 the share of women beneficiaries
TABLR - 10.2: Budget Allocation and Funds under the Scheme.
Released : PMRY
l The average amount of loan dis-
( Rs. crore)
bursed has been increasing. It was
Year Budget Funds Released
Alloca-
Rs. 57,000 in the second round and
For Sub- For EDPs Total
tion sidy
Rs. 64,000 in the third round.
2002-03 169.00 152.55 15.55 168.10 l The employment generation was
2003-04 169.00 147.63 20.20 167.83 higher in the first round at 2.5 per
2004-05 218.90 190.48 27.69 218.17 unit. In the second and third rounds,
2005-06 273.46 251.36 21.11 272.47 it is found to be around 1.95 per
2006-07 252.60 228.82 19.69 248.51 functioning unit.
Total 1082.96 970.84 104.24 1075.08
l The proportion of rural beneficiaries
2007- 320.00 265.60 29.40 295.00
08* has come down from 49.9 per cent
*Up to December 2007 in the second round to 39.1 per cent
10.2.14 EVALUATION STUDIES OF in the third round.
PMRY l Assets have been created in 89.7
per cent of the cases where loans
10.2.14.1 Three rounds of evaluation (first were disbursed.
round conducted in 1996-97 for the pro-
gramme years 1993-94 and 1994-95, sec- l About 36.4 per cent of the beneficia-
ond round conducted in 2000-01 for the ries were repaying the loan install-
programme years 1995-96 to 1997-98 and ment on time.
the third round conducted during 2005-06
l The average rate of recovery of
for the programme years 1998-99 to 2001-
02) of the PMRY have been undertaken by loans was 29 per cent in the second
the Institute of Applied Manpower Research round. It improved somewhat at 38
(IAMR), New Delhi. A comparative position per cent in the third round.

110

10.2.15 Initiatives Taken For
Strengthening Pmry
10.2.15.1 Based on the recommendations
of the Group (June 2006) constituted un-
der the Chairmanship of the Adviser (VSE),
Planning Commission to review the design
and implementation of the Yojana, some im-
portant components, viz; enhancement in
the family income ceiling, project cost, sub-
sidy, training cost reimbursement, etc. have
been revised in the guidelines of the PMRY
with effect from 2007-08.
10.2.15.2 In the quarterly schedule fixed for
the year 2007-08, applications to the extent
of 125 per cent of the target are targeted to
be sponsored by the end of the third quar-
ter (100 per cent by the end of the second
quarter), so that loans could be sanctioned
in 90 per cent of the sponsored cases by the
end of the third quarter (100 per cent by the
end of 4th quarter). The quarterly schedule
further prescribes that loans would be dis-
bursed in 75 per cent cases by the end of
the third quarter and the loan disbursement
of the entire target of 100 per cent cases
would be achieved by the end of 4th quar-
ter. The RBI has also issued instructions to
all implementing banks reiterating the above
decision of the Government.
10.2.15.3 To improve the success rate of
eligible applicants, a new concept of pre-
motivational campaign has been introduced
w.e.f. 2007-08. Under this programme, State/
UTs are allowed reimbursement of cost of
counseling and guiding the applicants @
Rs.200/- per applicant, for 125 per cent of
the allocated target. Besides, a number of
operational guidelines have been issued to
make this Yojana more effective which inter-
alia include:
111
Annual Report 2007-2008
l Seminars to be held at the level of
each district for creating awareness
of PMRY in the area in the form of
pre-selection motivational cam-
paign. A resolution be adopted by
each and every Gram Panchayat
for giving wide publicity and spread-
ing awareness about the Scheme in
their respective jurisdictions.
l All the members of the Task Force
Committee would be collectively
responsible for selection of benefi-
ciaries. This would ensure that the
Bank Manager alone is not held re-
sponsible for the non-performing as-
sets if any, that could arise out of the
loans extended under PMRY to the
beneficiaries.
l No collateral shall be insisted for
PMRY loans upto Rs. 5 lakh.
l SC/ST and beneficiaries from minor-
ity communities should be targeted
in such a manner that they are ben-
efited, at least, in proportion to their
population in each District/State.
l Of the total target for each State/UT,
women beneficiaries should consti-
tute at least 30 per cent.
l Preference may be given to devel-
op clusters specializing in specific
products at the time of selection of
PMRY beneficiaries.
l According to the findings of the eval-
uation studies of PMRY, the ratio of
applications received to the targets
was low owing to inadequate public-
ity of the scheme. As such aggres-
sive publicity campaigns have been
asked to be undertaken through
MSME
media like radio, television, cinema
slides and distribution of pamphlets,
in addition to pre-selection motiva-
tional campaigns.
10.3 SCHEME OF FUND FOR RE-
GENERATION OF TRADITION-
AL INDUSTRIES (SFURTI)
10.3.1 In pursuance of the declaration in the
National Common Minimum Programme of
the present Government and that of the Fi-
nance Minister in his Budget Speech of 2004-
05, announcing the setting up of a Fund for
Regeneration of Traditional Industries with
an initial allocation of Rs. 100 crore, the Min-
istry launched a scheme titled Scheme of
Fund for Regeneration of Traditional Indus-
tries (SFURTI) for development of around
100 clusters in khadi, village and coir sec-
tors with a total cost of Rs. 97.25 crore over
a period of 5 years (beginning 2005-06) with
a view to make these industries more pro-
ductive and competitive and increase the
employment opportunities in both the rural
and semi-urban areas of the country. The
Scheme covers an estimated 50,000 benefi-
ciary families.
10.3.2 The objective of SFURTI is to estab-
lish a regenerated, holistic, sustainable and
replicable model of integrated cluster-based
development of traditional industries in KVI
and coir sectors. This will primarily mean:
more competitive traditional in-
dustries which are market-driven,
productive, profitable and provide
sustained employment for the par-
ticipants;
strengthened local socio-economic
governance system of the industry
112
clusters, with the active participation
by the local stakeholders that can
help continuous undertaking of de-
velopment initiatives by themselves;
and
building up innovative and tradi-
tional skills, improved technologies,
advanced processes, market intelli-
gence and new models of public-pri-
vate partnerships, so as to gradually
replicate elsewhere similar models
of cluster-based regenerated tradi-
tional industries.
10.3.3 SFURTI is a Central Scheme, and is
being implemented by the Ministry (erstwhile
Ministry of Agro & Rural Industries) without
any share of financial contribution by the
State/UTs.
10.3.4 The following support measures are
planned to be taken up in the selected clus-
ters:
l Replacement of charkhas and looms
in khadi sector.
l Setting up of Common Facility Cen-
tres (CFCs).
l Development of new products, new
designs for various khadi and vil-
lage industry (VI) products, new/im-
proved packaging, etc.
l Market promotion activities.
l Capacity building activities, such as
exposure visits to other clusters and
institutions, need-based training,
support for establishment of cluster
level networks (industry associa-
tions) and other need based sup-
port.
l Other activities identified by the Im-
plementing Agency (IA) as may be

necessary for the development of
the cluster as part of the diagnostic
study and included in the Annual Ac-
tion Plan for the cluster.
10.3.5 KVIC and Coir Board are the Nodal
Agencies (NAs) for implementation of the
scheme and also responsible for holding
and disbursing funds to the identified Imple-
menting Agencies (IAs) and monitoring of
the Scheme under the overall supervision
of the Scheme Steering Committee (SSC).
The Secretary (MSME) is the Chairman of
SSC and representatives of the Planning
Commission, State Bank of India, Indian
Bank Association and National Bank for Ag-
riculture and Rural Development (NABARD)
are the members of SSC.
10.3.6 Implementing Agencies (IAs) under
SFURTI are non-Government organizations
(NGOs), institutions of the Central and State
Governments and semi-Government institu-
tions with suitable expertise which undertake
cluster development. Generally, one IA has
been assigned only one cluster. The selec-
tion of IAs, based on their regional reputa-
tion and experience of working at the grass-
root level, has been done by the NAs, with
approval of SSC.
10.3.7 Under this scheme, 18 reputed na-
tional level institutions with expertise in clus-
ter development methodology have been
appointed as Technical Agencies (TAs) (An-
nexure 10.3) to provide technical support to
the NAs and the IAs. The responsibilities
of the TAs also include assisting the NAs in
identification of clusters, conducting train-
ing of the Cluster Development Executives
(CDEs) and other officials of the IAs and
NAs, validation of cluster action plans, moni-
toring and evaluation, etc.
113
Annual Report 2007-2008
10.3.8 The Cluster Development Executives
(CDEs) have been appointed exclusively for
each cluster and are located in the cluster on
full time basis and responsible for implemen-
tation of the Scheme in the assigned clus-
ter. The CDEs have to undergo prescribed
training in cluster development methodology
to be organized by the NA through the TA.
The responsibilities of CDEs include con-
ducting the diagnostic study, preparing and
implementing the annual action plans of the
cluster, promoting linkages with institutions,
building the local governance framework,
etc.
10.3.9 By the end of December 2007, 124
clusters (34 khadi, 64 - village industries
and 26 coir) covering all the States have
been approved by the SSC for their develop-
ment under SFURTI. The State wise details
of clusters are given at Annexure 10.4.
The other activities for development of clus-
ters like consent of State Government, train-
ing of NAs, IAs, CDEs, etc., diagnostic study
report and annual action plan, etc. in most of
the cases have been completed. It is expect-
ed that a good number of clusters approved
under SFURTI will be operationalised by the
end of the current financial year.
10.3.10 The release of funds under this
scheme will be cluster specific. The funds
are released directly to the Nodal Agencies,
which are also responsible for holding and
disbursing the funds, on receipt of utilization
certificate and depending on actual physi-
cal progress. The funds for development of
clusters are kept in a separate account by
the NAs which will be audited. The details of
the funds released to NAs since inception of
this Scheme and funds earmarked for 2007-
08, are given in Table 10.3
MSME

TABLE - 10.3: Funds Released: SFURTI sides providing specific professional training
(Rs. crore) on cluster development to Nodal Agencies,
Year KVIC Coir Board Total IAs and exposure to Technical Agencies on
2005-06 1.12 0.38 1.50 the specific needs of these sectors. Obtaining
2006-07 19.03 6.50 25.53 consent of State Governments and prepara-
2007-08* 3.44 3.25 6.69
tion of diagnostic study reports, thereafter, re-
(21.00*) quired some special efforts and time. Almost
*RE all the clusters are now in a take off stage and
7 clusters in KVI sector have already been
launched. All coir clusters are ready to be op-
10.3.11 SFURTI is the first organized and erationalised soon. The benefits are expected
systematic attempt at introducing cluster to start flowing from 2008-09 with the installa-
based development approach in rural and tra- tion of equipment and availability of other en-
ditional sectors of KVI and coir. This approach visaged technical/non-technical support. The
required considerable efforts at identification pace of expenditure under the Scheme is, ac-
and short listing of clusters, IAs and CDEs be- cordingly, expected to pick up from 2008-09.

114