THIRUVANANTHAPURAM: Underutilization of Norka Roots' ambitious NDPREM (Norka Department Project for Return Emigrants), a self-employment scheme for returnees, has goaded the government to raise the upper limit of project cost from Rs 20 lakh to Rs 30 lakh, for availing subsidized loans.
"A major portion of the funds allotted during the previous years from the beginning of the scheme remain unutilized and the current performance of the scheme is unattractive," said a government order issued in this regard. On the other hand, the annual budget allocation for the scheme has been witnessing a steady increase from Rs 2.5 crore to Rs 15 crore since its inception in 2012-13.
"There are so many cases where the subsidy under sanctioned loans got rejected solely because the project cost exceeded the existing limit of Rs 20 lakh. As business environment undergoes dynamic changes, there is a constant need to update and transform a scheme of this nature in tune with the time for better acceptability," the government order said.
In the current scenario, a viable project would require a minimum capital investment of Rs 30 lakh, the order pointed out.
However, the project's original offer of 15% capital subsidy and 3% interest subsidy for first four years to aspiring entrepreneurs will continue to remain for loans only up to Rs 20 lakh, said Harikrishnan Namboothiri K, the CEO of Norka Roots.
The PSU has the highest budget allocation so far (Rs 80 crore) in the current fiscal, out of which Rs 15 crore is set apart for NDPREM.
Currently, loans are offered through a total of seven banks and financial institutions including
State Bank of India,
South Indian Bank,
Union Bank of India, SC/ST Development Corporation, Kerala State Backward Development Corporation, Kerala Pravasi Vikasana Sahakarana Sangham and Kerala State Cooperative Agricultural and Rural Development Bank. "We have received around 175 applications till August this fiscal," the Norka CEO said.
Though the government cites underutilization of the scheme against the allocation, the Norka officials point at a significant increase in utilization of funds during 2017-18 compared to previous fiscal. The period witnessed sanctioning of 533 loans and release of Rs 6.45 crore as subsidy against 328 loans and release of Rs 3.54 crore during 2016-17. The subsidy release was only Rs 1.25 crore in 2015-16 against the budget allocation of Rs 8.75 crore.
Through the project, the Norka is trying to integrate returnees' business ideas and their imbibed work culture, and has tied up with Centre for Management Development (CMD) to provide the aspiring entrepreneurs proper guidance, training and professional management support for preparing project reports.
