Subsidy Guidelines for Infrastructure Projects

Questions and Answers

What is the maximum subsidy amount a promoter can receive for multiple different projects including a storage project in the same district?

Rs. 75 lakh (correct)

Rs. 133.20 lakh (correct)

Rs. 50 lakh

Rs. 100 lakh

In co-ownership infrastructure projects eligible for different subsidy rates, what rate is the subsidy available at?

At the average rate

At the lower rate (correct)

At the higher rate

No subsidy will be available

What percentage of the eligible subsidy is released by NABARD as advance subsidy to the Financial Institution (FI)?

100%

25%

75%

50% (correct)

How quickly must a controlling branch of an FI disburse the advance subsidy after receiving it from NABARD?

Within 10 working days Signup and view all the answers

What happens if the advance subsidy is not credited to the SRF account of the borrower within 12 working days?

Penal interest of 0.25% will apply Signup and view all the answers

What is the release time frame for the remaining 50% of the eligible subsidy after the advance subsidy?

Within 10 working days Signup and view all the answers

What type of infrastructure projects does the maximum subsidy ceiling not apply to?

State agency projects Signup and view all the answers

Which portal is used for the submission of claims for advance subsidy by NABARD?

ENSURE Portal Signup and view all the answers

What is the maximum carpet area allowed for the MIG-I category under the scheme?

160 sq meters Signup and view all the answers

What is the maximum loan amount eligible for interest subsidy for MIG-II households?

Rs.12.00 Lakhs Signup and view all the answers

Which income bracket qualifies for the MIG-I category?

More than Rs.6.00 Lakh and up to Rs.12.00 Lakh Signup and view all the answers

What is the subsidy percentage for MIG-I under this housing scheme?

4% Signup and view all the answers

What is the maximum subsidy amount for MIG-II households?

Rs.2,30,156/- Signup and view all the answers

Up to when has the continuation of the Pradhan Mantri Awas Yojana-Urban (PMAY-U) been approved?

31st December 2024 Signup and view all the answers

Which category of households is eligible for financial assistance under PMAY-U 2.0?

Urban poor and middle-class families Signup and view all the answers

What is the maximum loan tenure available for the interest subsidy calculation?

20 years Signup and view all the answers

What is the maximum admissible project cost for margin money subsidy in the manufacturing sector?

Rs. 50 lakh Signup and view all the answers

Which category is eligible for the highest subsidy rate in urban areas?

Special Category Signup and view all the answers

What percentage of the project cost can banks finance for general category projects?

90% Signup and view all the answers

What is the maximum period for which rental or lease costs can be included in the project cost?

3 years Signup and view all the answers

Which of the following is NOT eligible for financing under the Scheme?

Projects without Capital Expenditure Signup and view all the answers

For a project located in a rural area under the general category, what is the beneficiary's contribution percentage?

25% Signup and view all the answers

What type of expenses can banks finance as a composite loan?

Both capital expenditure and working capital Signup and view all the answers

Which of the following project costs should not be included for financing?

Cost of land Signup and view all the answers

What is the total amount of assistance provided under the Scheme?

₹2.30 lakh crore Signup and view all the answers

Which organization will manage the Credit Risk Guarantee Fund after the transfer?

National Credit Guarantee Company (NCGTC) Signup and view all the answers

What is the annual income limit for families classified as Economically Weaker Section (EWS)?

Up to ₹3 lakh Signup and view all the answers

Which component focuses on providing financial assistance to individual families for constructing new houses on their own land?

Beneficiary-Led Construction (BLC) Signup and view all the answers

What is the purpose of the Technology Innovation Grant (TIG)?

To support AHP projects using innovative technologies Signup and view all the answers

Which of the following segments does NOT qualify for the Scheme's benefits?

Families with pucca homes Signup and view all the answers

What additional type of project is eligible under the Affordable Housing in Partnership (AHP) component?

Private projects complying with norms Signup and view all the answers

What has happened to the corpus fund of the Credit Risk Guarantee Fund Trust (CRGFT)?

It has been increased to ₹3,000 crore Signup and view all the answers

What is the maximum subsidy ceiling per MT for projects in the North Eastern States?

1333.20 Rs./MT Signup and view all the answers

For which category of beneficiaries is a subsidy rate of 25% applicable?

Other categories of beneficiaries Signup and view all the answers

What is the subsidy rate for registered FPOs and similar organizations?

33.33% Signup and view all the answers

In the context of eligible project costs for subsidy calculation, which of the following is NOT considered?

Market value of the project components Signup and view all the answers

Which of the following areas has a subsidy ceiling of 1166.55 Rs./MT?

Other Areas Signup and view all the answers

What is the maximum ceiling for subsidies in Rs. Lakhs for more than 1000 MT category?

100 Lakhs Signup and view all the answers

What is the subsidy ceiling per MT for the 'Hilly Areas' category?

1333.20 Rs./MT Signup and view all the answers

What percentage of capital cost is subsidized for projects in other categories?

25% Signup and view all the answers

Which of the following statements is FALSE regarding subsidy calculations?

The subsidy rate is the same for all beneficiary categories. Signup and view all the answers

What is the capital cost condition for determining the subsidy amount?

It can be either the appraised cost or actual cost, whichever is lower. Signup and view all the answers

What is the minimum period that SHGs should be in active existence to be eligible for loans?

6 months Signup and view all the answers

What documentation can banks accept instead of a Permanent Account Number (PAN) for SHGs at the time of account opening?

Form No 60 Signup and view all the answers

Which of the following practices is NOT part of the 'Panchasutras' for SHGs?

Annual financial reporting Signup and view all the answers

What is the minimum Cash Credit Limit sanctioned to eligible SHGs?

Rs.6.00 Lacs Signup and view all the answers

Which members of an SHG require Customer Due Diligence (CDD) when opening an account?

Only office bearers Signup and view all the answers

For credit linking of SHGs, what KYC verification is required by banks?

All members Signup and view all the answers

What is the focus of the Self Employment Program (SEP) under NULM?

Offering interest subsidy on loans for enterprises Signup and view all the answers

When can existing defunct SHGs be considered eligible for credit?

If they are revived and active for at least 3 months Signup and view all the answers

What percentage of women beneficiaries is targeted under the Self Employment Program (SEP)?

30 percent Signup and view all the answers

Which body is responsible for identifying prospective beneficiaries for the SEP?

Community Organizers and Urban Local Body professionals Signup and view all the answers

What type of accounts should banks open for Federations of SHGs?

Savings accounts classified as 'Association of persons' Signup and view all the answers

How is the application for beneficiaries scrutinized in the SEP program?

By a task force at the ULB level Signup and view all the answers

What is the special provision for differently-abled individuals under the SEP?

5 percent reservation with priority to women Signup and view all the answers

What is the minimum earmarked percentage of targets for minority communities under the SEP?

15 percent Signup and view all the answers

Who is responsible for constituting the Task Force for the SEP at the ULB level?

The Chief Executive Officer/Municipal Commissioner of ULB Signup and view all the answers

What happens to the provision of capital subsidy previously available under SJSRY in NULM?

It has been replaced by interest subsidies. Signup and view all the answers

What is the time frame within which banks must process loan applications recommended by the task force?

15 days Signup and view all the answers

Which of the following is true regarding the educational qualifications of beneficiaries?

No minimum educational qualification is needed. Signup and view all the answers

What type of financial assistance is available to urban poor for setting up enterprises?

Interest subsidy on bank loans Signup and view all the answers

What additional benefit is provided to Women Self Help Groups (WSHGs) upon timely loan repayment?

3% interest subvention Signup and view all the answers

How often should banks submit claims for interest subsidy to ULBs after loan disbursement?

Monthly Signup and view all the answers

What is the minimum duration for the Entrepreneurship Development Program conducted by ULBs for beneficiaries?

3 days Signup and view all the answers

Under which condition can banks reject loan applications recommended by the task force?

In exceptional circumstances Signup and view all the answers

What is the relationship between the interest subsidy and the rate of interest charged by banks?

Subsidy is provided for the difference above 7% interest. Signup and view all the answers

What is the maximum interest subsidy amount a beneficiary can receive under the Interest Subsidy Scheme for a loan of ₹25 lakh?

₹1.80 lakh Signup and view all the answers

Which model is NOT utilized for implementing Affordable Rental Housing?

Utilizing international funding Signup and view all the answers

What is the central government contribution rate per square meter for projects using innovative technologies under the Affordable Rental Housing scheme?

₹3,000 Signup and view all the answers

Which of the following statements correctly describes the funding mechanism for the Interest Subsidy Scheme?

Implemented as a Central Sector Scheme Signup and view all the answers

What percentage sharing pattern is required between the central and state governments for UTs with legislatures?

90:10 Signup and view all the answers

Under the PMAY-U 2.0 scheme, what is the mandatory government assistance amount per unit in certain verticals?

₹2.50 lakh Signup and view all the answers

What is the primary purpose of restructuring the Indira Awas Yojana into Pradhan Mantri Awas Yojana-Gramin?

To provide housing to rural areas in line with the Housing for All initiative Signup and view all the answers

What is the maximum tenure for which eligible beneficiaries can receive an interest subsidy?

12 years Signup and view all the answers

What is the maximum loan amount a group enterprise can be eligible for?

₹ 2 Lakh per member or ₹ 10 Lakh, whichever is lower Signup and view all the answers

What should the margin money ideally be for loans exceeding ₹ 50,000?

5% of the project cost Signup and view all the answers

What is the repayment schedule duration for loans provided under this scheme?

5 to 7 years Signup and view all the answers

Which of the following is NOT required as collateral for the group enterprises' loans?

Personal guarantee from members Signup and view all the answers

What is the minimum number of members required for a group enterprise to be eligible?

3 members Signup and view all the answers

Which age group should all members of the group enterprise belong to?

18 years or older Signup and view all the answers

What happens to the project cost when calculating the loan amount for the group enterprises?

The project cost minus margin money determines the loan amount Signup and view all the answers

Which of the following statements is true regarding more than one person from the same family in a group enterprise?

Only one member per family can be included in the group Signup and view all the answers

Study Notes

Subsidy Eligibility and Limits

Promoters can receive a maximum subsidy of ₹75 lakh or ₹133.20 lakh based on project type if multiple projects are proposed in the same district.
No maximum subsidy ceiling for infrastructure projects by State agencies, excluding storage infrastructure projects.
Co-ownership infrastructure projects receive subsidy at the lower applicable rate among different eligible categories.

Advance Subsidy Process

NABARD provides advance subsidy to Financial Institutions (FIs) to be held in a Subsidy Reserve Fund (SRF) for borrowers.
50% of eligible subsidy paid to FIs upon submission of claim via ENSURE Portal, with a declaration from an authority not below the rank of AGM.
Advance subsidy released through PFMS within 10 working days after government funds are received.
FIs must disburse the advance subsidy to bank branches within 10 working days, with the final credit to borrowers' SRF accounts within 2 days.
Late credit beyond 12 working days incurs penal interest of 0.25% per month on FIs, not on borrowers.

Final Subsidy Release

Remaining 50% of eligible subsidy is released to FIs after obtaining the necessary Annexure-XII from the FIs, also via PFMS within 10 working days post-fund receipt.

Project Cost and Subsidy Rates

Maximum project cost for manufacturing sector eligible for margin money subsidy increased to ₹50 lakh; for Business/Service Sector, it's ₹20 lakh.
Projects without capital expenditure are ineligible for financing.
Land costs are excluded from project costs, but ready-built or rented workspaces can be included for a maximum lease period of 3 years.

Margin and Rate of Subsidy

Urban and Rural category rates vary, with general category beneficiaries receiving 15% in urban and 25% in rural areas, while special categories (SC/ST/OBC, etc.) get 25% urban and 35% rural.
Beneficiary contribution rates are set lower for special categories to promote inclusiveness.

Bank Financing Terms

Banks can finance up to 90% project cost for general category beneficiaries and 95% for special category beneficiaries.
Financing can be structured as a term loan for capital expenditure and cash credit for working capital, including composite loans.

PMAY-U Scheme Overview

Pradhan Mantri Awas Yojana-Urban (PMAY-U) extended to December 2024, focusing on financial assistance for completing 122.69 lakh houses.
PMAY-U 2.0 aims to assist 1 crore urban poor and middle-class families over 5 years, with a financial provision of ₹2.30 lakh crore.
Credit Risk Guarantee Fund Trust corpus increased from ₹1,000 crore to ₹3,000 crore for affordable housing loans to EWS/LIG segments.

Eligibility for PMAY-U

Open to families in EWS/LIG/MIG segments without a pucca house.
Income classifications: EWS (up to ₹3 lakh), LIG (₹3 lakh to ₹6 lakh), and MIG (₹6 lakh to ₹9 lakh).

Scheme Components

Beneficiary-Led Construction: Provides funds to EWS families to build on their own land.
Affordable Housing in Partnership: Supports EWS beneficiaries in accessing homes through collaborations, offering additional grants for innovative construction.

Subsidy Pattern for Infrastructure Projects

Subsidy based on lower of project cost as appraised by financial institutions or as certified by a Chartered Accountant.
Tailored rates for different regions, to encourage infrastructure development across varying categories and beneficiaries.

Opening Accounts for Self-Help Groups (SHGs)

Banks can accept declaration in Form No 60 instead of insisting on Permanent Account Number (PAN) for SHGs during account opening or transactions.
Customer Due Diligence (CDD) is required only for SHG office bearers; no CDD for all members at the account opening stage.
KYC verification of all SHG members is mandatory when credit linking SHGs.
Savings accounts for Federations of SHGs may be opened at various administrative levels and categorized as accounts for 'Associations of persons'.

Eligibility Criteria for SHGs

SHGs must be actively existing for at least 6 months as per their account books to be eligible for credit.
Must practice 'Panchasutras', which include regular meetings, savings, inter-loaning, timely repayments, and maintaining up-to-date books.
SHGs must be graded by NABARD; defunct groups can qualify if revived and active for 3 months.

Loan Types and Conditions

SHGs can obtain Term Loans (TL), Cash Credit Limits (CCL), or both, based on specific needs.
Additional loans may be sanctioned based on repayment behavior, even if previous loans are outstanding.
Minimum cash credit limit sanctioned is ₹6.00 lakh for a period of 3 years, with drawing power subject to annual increases based on repayment performance.

National Urban Livelihoods Mission (NULM)

Launched on September 24, 2013, replacing Swarna Jayanti Shahari Rozgar Yojana (SJSRY) to provide financial assistance to urban poor.
Self Employment Program (SEP) grants interest subsidies on loans for establishing individual and group enterprises and SHGs.
Minimum 30% of beneficiaries under SEP must be women; special provisions exist for SCs, STs, and differently-abled individuals.

Beneficiary Selection and Loan Process

Community Organizers (COs) identify prospective beneficiaries; banks can also nominate cases.
A Task Force at Municipal levels will scrutinize applications, chaired by the CEO of the Urban Local Body (ULB).
Task Force-recommended cases must be processed by banks within 15 days, with strict rejection only under exceptional circumstances.

Financial Assistance Procedures

No minimum educational qualification needed, but special skills require training.
Entrepreneurship Development Program (EDP) offered for 3-7 days to prepare beneficiaries.
Interest subsidy on loans covers the difference between 7% and the bank's charged interest, with additional benefits for Women Self Help Groups (WSHGs).

Group Enterprises Funding

Groups require at least 3 members from urban poor families; no dual representation from the same family.
Maximum project cost for group enterprises is ₹10 lakh or ₹2 lakh per member, whichever is lower.
Loans can be single or divided among members, addressing both capital expenditure and working capital.

Affordable Rental Housing (ARH) Model

ARH aims to provide housing for various vulnerable groups, utilizing existing government vacant houses or new constructions through partnerships.
Interest Subsidy Scheme (ISS) offers 4% subsidy on loans up to ₹25 lakh for eligible families with specific income criteria.

Pradhan Mantri Awas Yojana (PMAY)

Restructured from Indira Awas Yojana into PMAY-Gramin effective April 1, 2016, to fulfill the goal of Housing for All by 2022.
Government assistance under this scheme involves cost-sharing between the Ministry, State/UT, Urban Local Body, and beneficiaries.
The financial distribution varies, providing flexibility to improve housing affordability.

Additional Insights on Financial Assistance

Margin money is typically not required for loans up to ₹50,000; 5-10% is preferred for higher loans.
Repayment schedules range from 5 to 7 years following an initial moratorium of 6-18 months, depending on bank norms.

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Description

This quiz covers the eligibility criteria for obtaining subsidies for different types of infrastructure projects in a district. It highlights specific rules related to co-ownership projects and the varying subsidy ceilings based on the project type. Understanding these guidelines is crucial for promoters planning new projects.