Everything You Need to know about the Coir Udyami Yojana

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Coir Udyami Yojana is a credit linked subsidy scheme for setting up of coir units with project cost up to INR 10 lakhs plus one cycle of working capital, which shall not exceed 25% of the project cost. The scheme is being implemented by the Coir Board.

Government of India has approved the continuation of the credit linked subsidy scheme called Rejuvenation, Modernization and Technology Upgradation of the Coir Industry (renamed as Coir Udyami Yojana) to facilitate sustainable development of the Coir Industry in the country. This will, in turn, generate more employment opportunities especially for women and the weaker sections of people in rural areas.

Coir Udyami Yojana is a Central Sector Scheme to be administered by the Ministry of Micro, Small and Medium Enterprises. The Scheme will be implemented by Coir Board, a statutory organization under the Ministry of MSME as the Nodal Agency at the national level. At the state level the scheme will be implemented through Board’s Regional Offices, Sub Regional Offices, Coir Mark Scheme Office and District Industries Centres, Coir Project Offices, Banks and such other offices.

The Government subsidy under the scheme released to Coir Board will be routed through the identified banks for eventual distribution to the beneficiaries/entrepreneurs in their bank accounts.

The Implementing Agencies viz. Coir Board Offices, DIC, Coir Project Offices etc will associate with reputed Non Governmental Organizations (NGOs)/reputed Autonomous Institutions/National Small Industries Corporation/Panchayati Raj Institutions and other relevant bodies in the implementation of the Scheme especially in the area of identification of beneficiaries, area of specific viable projects and providing training in Entrepreneurship Development, verification of units established under the Scheme.

Objectives of Coir Udyami Yojana

The main objectives of the scheme are as under:

  1. To modernize the Coir Industry by the adoption of modern technology in the production and processing of coir and coir products;
  2. Upgradation of the production and processing technology for improving the productivity, quality and product diversification;
  3. To increase the efficiency and productivity for enhancing the earnings of the workers engaged in the sector;
  4. To enhance the utilization of coconut husk and for increasing the production of coir fiber and coir products;
  5. To generate employment in the rural areas of the coconut producing States /Union Territories;
  6. To provide more employment opportunities for women in the rural sector for gender empowerment;
  7. To enhance the socio-economic conditions of the producers/workers engaged in the industry;
  8. To contribute to the inclusive growth of vulnerable sections of beneficiaries especially those belonging to Scheduled Castes (SC), Scheduled Tribes (ST) and North Eastern Region (NER);
  9. To give sufficient training to the rural youth of the coconut producing States with an eye on attracting them to the fold of the coir sector.
  10. To provide backward/forward linkages to the unitholders to whom assistance is given under the Scheme.

Quantum and Nature of Financial Assistance

The pattern of assistance under the Scheme is 40% of the project cost as Govt. of India subsidy, 55% as a loan from Bank and 5% as beneficiary contribution.

Under the CUY Scheme, Marketing Support Assistance to the beneficiaries for the following interventions will also be considered.

  • For providing financial assistance for establishing Marketing Consortium of CUY beneficiaries.
  • For reimbursement of expenditure incurred for participation in fairs/exhibitions
  • For hiring showroom spaces
  • For reimbursement of the salary of personnel employed in the Consortium

However, the subsidy will be computed excluding working capital component.

Eligibility conditions of the Beneficiaries

Any individual above 18 years of age with Indian Citizenship is eligible for benefits of Coir Udyami Yojana. There will be no income ceiling for assistance for setting up of project under Coir Udyami Yojana

Assistance under the Scheme is only available for projects for the production of coir fiber/yarn/products etc. coming under the coir sector. Assistance under the Scheme will be made available to individuals, Companies, Self Help Groups, Non-Governmental Organizations, Institutions registered under Societies Registration Act 1860, Production Co-operative Societies, Joint Liability Groups and Charitable Trust.

However, the units that have already availed Govt. subsidy under any other Scheme of Govt. of India or State Govt. for the same purpose are not eligible to claim subsidy under the scheme.

Procedure for application

The applications can be collected from Coir Board Offices, District Industries Centres, Coir Project Offices, Panchayati Raj Institutions and the Nodal Agencies approved by the Board for this purpose. To get the contact details of Regional and Sub-regional centers of Coir Board,  click here.

The following documents shall be attached to the application while filing the application.

  1. Copy of Title Deed of the property on which the unit is proposed to be setup/already located.
  2. Proof of coir industry experience
  3. Proof of training availed from Coir Board
  4. Machinery proposed to be purchased along with the invoice.
  5. Industrial Establishment Certificate issued by DIC
  6. Plan & Estimate for construction of workshed duly certified by Chartered Engineer
  7. Project Profile of the proposed project
  8. In case of SC/ST, copy of Caste Certificate
  9. Any other supporting documents

The filled in application has to be submitted directly to the Coir Board Field Offices or through the DICs.

For online application, click here.

Instructions to Fill up the Online Application Form

Stage 1 – New Login Registration

  1. Click on the link “New Login Registration” in the Login.
  2. Enter Name, PAN Number, e-mail-id and Mobile Phone Number as per the format is given on the screen
  3. PAN number,email-id and Mobile Phone Number once entered cannot be changed later in the application form.
  4. Now you should select a secret question from the Drop Down menu and then type the answer in the next Column. Note down the secret question and the answer for future references. They are used for the retrieval of password in case the password is forgotten.
  5. You should now choose your User Name (Please refer to the User Name Policy provided).
  6. Enter the Given Security PIN displayed on the screen.
  7. You can now finalize the above details by clicking the CONFIRM Button. Please note that the email-id, as well as the Mobile Number provided, should be that of your own as all correspondences in the future will be through email and SMS
  8. You will receive your user name and password by email as well as by SMS.

Stage 2 – Submit Beneficiary Registration ( Part-A)

In the login section of the login page, type your user name and password received through email/SMS and click “Sign In”

Immediately you will be asked to change your password. Here you should set a new password as per the password policy of the site and confirm. You will be automatically asked to re-login with new credentials.

After successful login, You will be redirected to your Home Page.

An Application for Coir Sector Beneficiary Scheme contains two Parts. Part -A consists of common details related to the beneficiary and is called the Beneficiary Registration form. PART-A is common to all Coir Beneficiary schemes.

Each Beneficiary must complete the Beneficiary Registration by selecting the Menu ItemBeneficiary Registration /Registration Part-A( Give the Consortium registration details in Part-A).

After completing Beneficiary registration ( Part-A), the beneficiary will get a beneficiary registration Number.

Stage 3 – select the application from the consortium menu item and submit the application

  • Select the menu item consortium from the left side menu and select the appropriate application and submit.
  • for Example, if you want to apply for Assistance for establishing marketing consortium the following stepsLogin to the system with your Username and Password
    • On Successful Login You will get the Home Page of Coir services.
    • Select Registration Part-Aby expanding the Beneficiary Registration Link from the Left Side Menu
    • Enter consortium name & address details carefully and Submit the Form
    • You will get a beneficiary registration Number.
    • Select the item establishing marketing consortium expanding theLinkConsortium Give details and submit the form you will receive the application registration Number.
  • As part of submitting Online application, You need to scan and upload the following documents along with the application appropriate places as indicated.
  • Beneficiary Registration ( Part-A)
  • Photograph-Photograph should be 3.5 cm width x 4.5 cm height or 132-pixel width X 170-pixel height with the file size between 4 KB and 100 KB. JPG formats only will be accepted
  • PAN Card Copy
  • MSME Registration Certificate
  • Consortium Registration Certificate Consortium ( Part-B)Scan and upload all relevant documents and bills as prescribed

Consortium ( Part-B)

Scan and upload all relevant documents and bills as prescribed

Note – Except Photograph all the documents should be scanned in pdf format and size should be between 10KB and 300 KB.

In order to upload a file first click on the browse button and select the file. then click on the Upload documentation

Stage 4 – Application status

You can check and verify the status of the application in the web site by login to your Home Page with your username and Password.

Beneficiary / Applicant should visit the respective home page of www.coirservices.gov.in for the latest developments against your application

Getting Loan under Coir Udyami Yojana

Once the application is received by the Bank, the Bank shall intimate the sanction or otherwise to the beneficiary and Coir Board within sixty (60) calendar days. Detailed grounds for rejection shall be recorded and intimated to the Coir Board and beneficiary and also maintained in the Nodal Branches of the Banks.

Margin Money (subsidy) in advance based on the sanction received will be placed lump sum deposit in the name of Coir Board with the Nodal Branch of the Implementing Banks in each State for release of Margin Money (subsidy).

The Bank will sanction 95% of the project cost after adjusting 5% beneficiary contribution deposited and disburse full amount of project cost including the beneficiary contribution in installments for setting up of the project.

The beneficiary shall deposit his contribution to the concerned bank within 30 days of the receipt of a copy of the sanction letter from the bank. The Bank through its financing branch shall release 1stinstallment of loan to the beneficiary within 30 days of receipt of the beneficiary contribution.

The Banks will finance Capital Expenditure in the form of Term Loan and Working Capital in the form of Cash Credit. Projects can also be financed by the Bank in the form of composite loan consisting of Capital Expenditure and Working Capital. The amount of Bank Credit will be 55% of the total project cost after deducting 40% of Margin Money (subsidy) and owner’s contribution of 5% from beneficiaries.

The Banks shall consider Composite Loan instead of Term Loan to cater to the Working Capital requirements also. This should be exclusive of Rs.10 lakhs project cost limit proposed. The Working Capital shall not exceed 25% of the project cost. No Subsidy will be paid by the Board for Working Capital component.

The eligible subsidy for the approved project will be released by the Nodal Bank after receiving the official confirmation from the Implementing Bank that 1stinstalment of the loan has been released to a particular beneficiary based on the projections of Capital Expenditure in the project report. The Banks will not be charging interest on the loan to the extent of subsidy amount from the total loan.

Though banks will claim subsidy on the basis of projections of Capital Expenditure in the project report and sanction thereof, subsidy proportionate on the actual availment of Capital Expenditure will be retained and excess, if any, will be refunded to Coir Board, immediately after the project is ready for commencement of production.

The entire assets created under the scheme shall be insured by the beneficiaries.

Rate of Interest and Repayment Schedule

Rate of interest chargeable for the loans shall be at par with the base rate. Repayment schedule may not exceed 7 years after an initial moratorium as may be prescribed by the concerned Bank/financial institution so as to enable the beneficiaries to complete this project.

The loan would be covered under Credit Guarantee Trust Fund Scheme under the O/o the Development Commissioner, Ministry of MSME. The guarantee fee for the coverage will be borne by the beneficiary or the Bank. The term loan would be without collateral / third party guarantee and under no circumstances, such documents should be insisted upon by the banks.

Physical Verification of Coir Udyami Yojana Units

100% physical verification of the actual establishment and working status of each of the units, set up under Coir Udyami Yojana, will be done by Coir Board through the agencies of State Government and / or, if necessary by outsourcing the work to professional institutes / agencies having expertise in this area, following the prescribed procedures as per General Financial Rules (GFR) of Government of India.

Banks will coordinate and assist the Coir Board in ensuring 100% physical verification. A suitable proforma will be designed by Coir Board for such physical verification of units. Quarterly reports, in the prescribed format, will be submitted by Coir Board to the Ministry of MSME.

Important Links

To register for Coir Udyami Yojana, you can visit this link.

To download the COY manual, you can visit this link. To download the scheme guidelines, you can visit this link. To read more about the Application process, you can download this document.

So, what are your thoughts on this story?
Tell us in the comments.

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Uday Bhakta
Uday is the correspondent for our "Govt Policies" section. He writes about the changes in policies, tax reforms, union budget and every other legal aspect related to entrepreneurs and startups. He has been writing for more than 10 years.

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