Personal Interest Subsidy Scheme - Uttarakhand

What is the Personal Interest Subsidy Scheme?

The Personal Interest Subsidy Scheme; often written locally as the Vyaktigat Byaj Upadan Yojana: is a rural enterprise credit scheme of the Uttarakhand State Khadi and Village Industries Board (UKVIB). It was launched in 2016 to support rural entrepreneurs setting up small industries based on the raw materials actually available around them, and it works by making bank finance cheap rather than by giving out cash.

Personal Interest Subsidy Scheme finances a project of up to Rs 5,00,000 through a bank. The entrepreneur pays interest at a flat 4 per cent on the financed amount, and the Government bears up to 10 per cent of the differential interest above what the entrepreneur pays. The effect is that a village entrepreneur borrowing at a normal commercial rate ends up servicing the loan at close to a concessional rate, with the state absorbing the gap.

The scheme is run by UKVIB, the board constituted by government notification on 17 August 2002 under the provisions of the Uttar Pradesh Reorganisation Act 2000. Its head office is at Thano Road, Bhopalpani, Dehradun - 248008, and it operates through District Village Industries Officers in 13 districts of Uttarakhand. Those district officers are the working counter for this scheme.

Who is eligible for the Personal Interest Subsidy Scheme?

You can apply if:

• You are between 18 and 45 years of age.
• You are a permanent resident of Uttarakhand.
• You fall into one of the target groups:
• Educated unemployed youth who have crossed the age limit for government jobs;
• Persons trained at an ITI or polytechnic;
• Women seeking self-employment;
• Persons who passed Vocational Education (10+2) with Village Industries as a subject.
• Your project will be established in a rural area of Uttarakhand.
• Your project uses locally available raw material, which is the stated purpose of the scheme.
• A bank is willing to finance the project, evidenced by a bank consent letter.

You cannot apply, or your project is not eligible, if:

• You are under 18 or over 45 years of age.
• You are not a permanent resident of Uttarakhand.
• The unit is to be set up in an urban area rather than a rural one.
• The project involves any of the excluded activities:
• Meat production or trade;
• Intoxicating substances;
• Khadi and poly products;
• Animal husbandry;
• Horticulture;
• Any industry harmful to the environment.
• The proposed financing exceeds Rs 5,00,000, which is the ceiling of the scheme. A larger project should be taken to a different route such as Mukhyamantri Swarojgar Yojna, which allows up to Rs 25 lakh in manufacturing.
• No bank is willing to finance the project. The scheme has no route that works without bank credit, because the subsidy is on interest.

The exclusion list is worth reading carefully. Animal husbandry and horticulture are excluded here not because they are unimportant but because Uttarakhand funds them through separate departmental schemes; a dairy or orchard proposal put through this window will simply be returned.

What documents are required?

Two of these are the ones applicants most often arrive without: the Gram Pradhan's certificate and the bank consent letter. Collect both before going to the district office, because the file cannot move without them.

How to apply for the Personal Interest Subsidy Scheme

Personal Interest Subsidy Scheme is an offline scheme. There is no online submission portal for it.

1. Download the application form from the Uttarakhand Khadi and Village Industries Board website at www.ukvib.org, or collect a printed form from your District Village Industries Office.
2. Prepare a project report for the proposed village industry, showing the locally available raw material it will use and the financing required, within the Rs 5,00,000 ceiling.
3. Obtain the certificate from your Gram Pradhan confirming that you belong to the village and that the unit will be located in a rural area.
4. Approach a bank branch and obtain a bank consent letter for the proposed financing.
5. Prepare the affidavit on Rs 20 stamp paper in the prescribed form, and assemble your residence certificate, identity proof, address proof, educational certificates, caste certificate if applicable and photographs.
6. Submit the complete application to the District Village Industries Office of your district.
7. Attend the verification and sanction stage. Once the file is approved and the bank sanctions the loan, the interest subsidy is applied so that you service the loan at 4 per cent.

Where to submit and whom to contact

The Uttarakhand State Khadi and Village Industries Board maintains a District Village Industries Officer in each of the 13 districts. Published district contacts include:

District offices also serve Tehri, Pithoragarh, Pauri Garhwal, Rudraprayag, Bageshwar, Chamoli, Champawat and Udham Singh Nagar. The Board's head office is at Thano Road, Bhopalpani, Dehradun - 248008, email hq.ukvib@gmail.com.

Alongside the district industries offices, UKVIB runs three main wool production centres at Chamba, Almora and Srinagar, with 20 production centres for spinning and weaving under khadi, and eight retail sales outlets across Dehradun, Mussoorie, Chamba, Srinagar, Almora, Kapkot, Bageshwar and Rudraprayag. An applicant whose proposed village industry touches wool or handloom will often find the nearest technical advice at one of these centres.

Why applications get returned, and how to avoid it

• Excluded activity proposed: meat, intoxicants, khadi and poly products, animal husbandry, horticulture or a polluting industry. Check the exclusion list before writing the project report.
• Unit located in an urban area. The scheme is for rural village industries only.
• Age outside the 18 to 45 band.
• No Gram Pradhan certificate, which is the document that establishes rural location and village belonging.
• No bank consent letter. Because the benefit is an interest subsidy, there is nothing to subsidise without bank finance.
• Financing sought above Rs 5,00,000, which is outside the scheme's ceiling.
• Educational qualification not evidenced, so the target-group claim — educated unemployed, ITI or polytechnic trained, or 10+2 vocational with Village Industries; cannot be verified.
• Affidavit not on Rs 20 stamp paper or not in the prescribed format.

Grievance and further help

• District Village Industries Officer of your district. The first point of contact for the status of a submitted file.
• Uttarakhand State Khadi and Village Industries Board head office, Thano Road, Bhopalpani, Dehradun - 248008; email hq.ukvib@gmail.com.
• Board website: www.ukvib.org, which also carries the schemes list, tenders, the citizen charter and the RTI section.

Applying under the Personal Interest Subsidy Scheme costs nothing beyond the Rs 20 stamp paper for the affidavit. No agent can guarantee sanction, because the credit decision rests with the bank and the subsidy sanction with the Board.