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TSMFC caught in fund crunch
The State government has delayed the release of funds to the State Minorities Finance Corporation (TSMFC) during the third and fourth quarter for bank-linked subsidy scheme. It has led to the authorities stopping the process of application and thus pouring cold water on small and medium entrepreneurs.
Hyderabad: The State government has delayed the release of funds to the State Minorities Finance Corporation (TSMFC) during the third and fourth quarter for bank-linked subsidy scheme. It has led to the authorities stopping the process of application and thus pouring cold water on small and medium entrepreneurs.
Though government has doubled the allotment of funds for the scheme when compared with the last year, leading to increase in the number of beneficiaries, the delay in releasing funds has robbed the scheme of its charm. The budget allocation for 2015-16 for the scheme was Rs 87.40 crores, but the government has released only Rs 21.85 crore togehter in first and second quarters. It has yet to release the remaining funds for the last two quarters.
The Corporation is finding it difficult to process all the applications it has received due to funds crunch. So far it has received about 8,000 applications as against the target of 17,000 during the financial year. The last date for applying for the scheme has been extended to February 29. “Applications, which I have forwarded, piled up at Finance Department. More than thousand files were sent during the month of January are yet to get processed. I believe half of the applicants may be disappointed, during this financial year,” said a higher official of TSMFC.
Earlier the subsidy provided under scheme was 50 percent. But for the current financial year, the government has decided to provide subsidy in the range of 80, 70 and 60 per cent under “slab system.”
For unit cost of Rs 1 lakh, subsidy of 80 per cent will be provided, subject to maximum of Rs 80,000. For unit cost of Rs 1 to 2 lakh, the subsidy will be 70 per cent, subject to maximum of Rs 1.4 lakh. For unit cost of above Rs 2 lakh up to Rs 10 lakh, the subsidy component is 60 per cent.
While on the other hand, due to implementation of new slab system and increase in number of beneficiaries, the Corporation has sought more funding apart from budget allocation of Rs 87.40 crores. In the recent video conference with the Chief Secretary Rajiv Sharma, officials of Corporation sought Rs 100 crore additional funding since the targeted beneficiaries were more than doubled. “In Mahbubnagar alone we have received 1,248 applications as against the target of 624.
