Rejuvenation, Modernisation and Technology Upgradation (REMOT) is a credit-linked subsidy scheme of the Ministry of MSME for the establishment of coir units. This scheme aims to modernize the Coir Industry by the adoption of modern technology in the production and processing of coir products. It is a centrally sponsored program that seeks to generate employment opportunities mainly for women and the weaker section people of rural areas. Let us look in detail about the REMOT Scheme in this article.
Objectives of the Scheme
The scheme has been established in view of the following objectives:
- To enhance the efficiency and productivity for enhancing the earnings of the workers engaged in the sector
- Upgradation of the processing and production technology for promoting the quality, productivity, and product diversification.
- To improve the utilization of coconut husk and for increasing the production of coir fibre and coir products.
- To enhance the socio-economic circumstances of the workers/producers engaged in the industry
- To create employment opportunities in the rural areas of the coconut producing States and Union Territories
- To contribute to inclusive growth of the vulnerable sections of beneficiaries especially those belonging to SC, ST and North Eastern Region (NER).
- To generate more employment opportunities for women in the rural sector for the gender empowerment
- To give enough training to the rural youth of the coconut producing States with a view on attracting them to the coir sector
- To provide backward and forward linkages to the unitholders to whom assistance is given under the Scheme
To apply for the REMOT Scheme with subject to the provisions of the scheme, the applicants will have to fulfil the following criteria:
- Any individual whose with the age of 18 years and above with the Indian Citizenship.
- The assistance given under the Scheme will be made accessible to individuals, Companies, Self Help Groups (SHGs), Non-Governmental Organizations, Institutions registered under Societies Registration Act 1860, Production Co-operative Societies, Charitable Trust and Joint Liability Groups.
- There will be no income ceiling for the assistance amount for setting up of project under the REMOT Scheme.
- The assistance under the scheme is only available for projects for the production of coir fibre/yarn/products etc. coming under the coir sector.
- The units that have already availed the Government subsidy under any other schemes of Government of India/State Government for the same purpose are not qualified to claim subsidy under the scheme.
Certified copy of the caste or community certificate issued by the concerned authority and in the case of other special categories, required to be produced by the beneficiary along with the application form.
- A certified photocopy of the bye-laws of the organisation is required to be affixed along with the application wherever necessary
- The total project cost will include capital expenditure like Building and Machinery.
- The applicants will have the choice to include 1 cycle of working capital also in the proposal of the project. However, the working capital will not be counted for the subsidy. The bank can consider approval of the proposed project and loan would be given to the working capital without considering any grant for the same. The loan amount for the working capital would be released and sanctioned only after setting up the new unit. In no case, the working capital involved in the project would exceed more than 25% of the total project cost.
- If the beneficiary already having the workshed the component of required machinery will alone establish the project cost as per the scheme norms.
Note: Only one person from one family will be eligible for obtaining the financial assistance for setting up of projects under the REMOT Scheme. The ‘family’ includes self and spouse.
Quantum and Nature of Financial Assistance
|Level of funding under the REMOT Scheme|
|Beneficiary’s contribution to the Project Cost||Bank’s Credit||Rate of Subsidy (of the total project cost)|
|5 per cent||55 per cent||40 per cent|
Note: The maximum admissible value of the project is INR 10 lakhs including the working capital, which would not exceed 25% of the total project cost. The banks would consider a composite loan instead of a term loan to cater to the working capital demands. This must be exclusive of INR 10 lakhs limit proposed. However, the subsidy amount will be computed excluding the working capital segment.
Implementation of the Scheme
The implementation of the Scheme is done by the Coir Industry, a statutory corporation under the Ministry of MSME as Nodal Agency at the federal level. The technical invasions, wherever necessary, will be provided by Central Coir Research Institute (CCRI), Kalavoor and Central Institute of Coir Technology (CICT), and other institutions that are engaged in development and betterment of the Coir Sector. The Scheme will be constantly monitored by the Ministry of Micro, Small and Medium Enterprises (MSMEs).
- All the Listed Commercial Banks that are registered in the 2nd schedule of the RBI Act
- All Regional Rural Banks
- Co-operative Banks who are Member Lending Institutions of the Credit Guarantee Trust Fund for Micro, Small and Medium Enterprise as well as through SC/ST or OBC Finance and Development Corporations.
Application Procedure for the Scheme
To avail the benefits of this REMOT scheme, the interested applicants can file an application in the prescribed format seeking the grant of financial assistance for new units under the scheme. The following is the application procedure for the REMOT Scheme.
Identification of Beneficiaries
Step 1: The project proposal will be requested by the Coir Board from potential beneficiaries at the State level through advertisement, Radio, Press, and other multimedia and also through DICs at number intervals. The Scheme will also be advertised or publicized through the Panchayati Raj Institutions which will also support in identification of beneficiaries.
Approach the Concerned Office
Step 2: The applications under this Scheme can also be collected from Coir Board Offices, Coir Project Offices, District Industries Centres, Panchayati Raj Institutions and the Nodal Agencies approved by the Board for this purpose. The applications forms can also be downloaded from the Coir Board website and have to be submitted to the Coir Board Field Offices or through the DICs.
Step 3: The applications received by the DICs will be referred to the Field Offices of the Coir Board.
Processing of Applications
Step 4: The Banks, Project Offices, DICs, Panchayati Raj Institutions will verify the application forms to the Selection Committee Convenor, the Officer-in-charge of the corresponding Coir Board Field Offices, for its consideration. The selection process must be a thorough, transparent, objective, just and fair manner and the names of the elected applications by the committee will be displayed on the website of the Coir Board.
Step 5: Once the application is accepted by the Bank, the Bank shall intimate the sanction order or otherwise to the beneficiary and Coir Board within 60 calendar days.
Step 6: The Margin Money in advance based on the sanction accepted will be placed lump sum deposit in the name of the Coir Board with the Nodal Branch of the Implementing Banks in the State for release of Margin Money (subsidy).
Step 7: The bank will sanction 95% of the total project cost after adjusting 5% beneficiary contribution deposited and disburse the total amount of project cost including the beneficiary giving in instalments for setting up of the project.
Step 8: The beneficiary would deposit his contribution to the concerned bank within the period of 30 days from the receipt of a copy of the sanction letter from the bank.
Step 9: The Bank through its financing branch would release 1st instalment of a loan to the beneficiary within 30 days from the receipt of the beneficiary contribution.
Step 10: The Banks will finance Working Capital in the form of Cash Credit and Capital Expenditure in the form of Term Loan. The projects can also be financed by the bank in the form of composite loan consisting of Working Capital and Capital Expenditure. The Bank Credit amount will be 55% of the total project cost after the deduction of 40% Margin Money and owner’s contribution of 5% from the beneficiaries.
Step 11: The banks will consider the Composite Loan instead of Term Loan to cater to the requirements of Working Capital also. This must be exclusive of INR 10 lakhs project cost limit proposed. The Working Capital would not exceed 25% of the project cost. No Subsidy amount will be paid by the Board for the Working Capital component.
Step 12: The qualified subsidy for the project approved will be released by the Nodal Bank after getting the official confirmation from the Implementing Bank that 1st instalment of the loan has been released to a specific beneficiary based on the projections of the Capital Expenditure in the project report.
Step 13: The Banks will not be charging interest on the loan to the extent of subsidy amount from the total loan
Step 14: 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 would be at par with the base rate. The repayment schedule will not exceed 7 years after an initial moratorium as prescribed by the respective Bank or financial institution so as to enable the beneficiaries to finish this project.
- The loan amount would be covered under Credit Guarantee Trust Fund Scheme under the operation officers the Development Commissioner, Ministry of MSME. The guarantee charge for the coverage will be borne by the beneficiary or the Bank. The term loan will be without collateral or third-party guarantee and under no circumstances, such documents/records should be insisted upon by the banks.