Subsidies play a major role in shaping India’s socio-economic condition as they act as a significant financial support system for the people of India and allow them to afford goods and services at convenient prices. These subsidies cover a wide range of things like food, fuel, fertilisers, electricity, and others, which directly benefit people from the vulnerable sections of society.
Subsidy schemes in India help reduce inequality and improve the living standards of people, especially in disadvantaged communities. For example, in sectors like agriculture, subsidy schemes enable farmers to access fertilisers, seeds, and electricity at affordable rates to support and promote agricultural productivity and quality food production. This helps the country to avoid severe problems like food shortages.
However, the country still faced problems in the allocation and execution of subsidy schemes, which led the Indian government to adopt the Direct Benefit Transfer (DBT) to ensure that beneficiaries receive the money and there would be minimal risk of cheating practices like corruption. The subsidy schemes in India aren’t merely monetary help, but they also aim to promote social equality, inclusive growth, and long-term economic stability.
Overview
The table below summarises some important details about the government personal loan scheme.
| Name of the scheme | Description |
|---|
| Pradhan Mantri Mudra Yojana (PMMY) | It offers loans up to Rs. 10 lakhs, categorised into three levels of businesses. |
| Pradhan Mantri Awas Yojana (PMAY) | A government personal loan scheme that aims to provide affordable housing, especially for people from the vulnerable sections of society. |
| Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) | A government subsidy loan scheme was launched to provide financial support to small and marginal farmers. |
| Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM) | To reduce urban poverty and enhance livelihood opportunities for the urban poor. |
| Dairy Entrepreneurship Development Scheme (DEDS) | A government subsidy for businesses that aims to promote self-employment and entrepreneurship in the dairy sector. |
Sectors Where Subsidies Are Given?
In India, subsidies are provided across various sectors to support the economy and ensure affordability for essential goods and services. Some of the key sectors that receive subsidies are:
| Sector | Subsidy |
|---|
| Agriculture | Subsidies are given on fertilisers, seeds, irrigation techniques, machinery, equipment, etc. |
| Food | Subsidies on essential food grains are given through the use of ration cards. |
| Energy | Subsidies are provided on fuels like diesel, kerosene, LPG, and solar energy like solar power, wind energy, etc. |
| Healthcare | Government provides health insurance subsidies to cover hospitalisation expenses. |
| Education | Subsidies are provided in the form of scholarships, fee reductions, material needed like books and stationery, etc. |
Government Subsidy Loan Schemes
The government of India has introduced several govt subsidy loan schemes to provide financial assistance to individuals, including MSME loan subsidy for women, businesses, and people from vulnerable sections of society. These sectors are designed to promote entrepreneurship, housing, education, agriculture, and other sectors. Some of the prominent govt subsidy loan schemes and govt subsidy for business are listed below
1. Pradhan Mantri Mudra Yojana (PMMY)
The Pradhan Mantri Mudra Yojana (PMMY) is a govt subsidy for businesses that was launched to empower small and micro-enterprises by allowing people to access affordable credit services even without putting down collateral. This MSME Loan Subsidy Scheme offers loans up to Rs. 10 lakhs, categorised into three levels of businesses. i.e. Shishu (up to Rs. 50000), Kishore (Rs. 50000 to 5 lakh), and Tarun (Rs. 5 lakh to Rs. 10 lakh). The loan scheme aims to encourage entrepreneurship and financial inclusion, especially for marginalised groups, including MSME loan subsidy for women and rural entrepreneurs.
Read More: Pradhan Mantri Mudra Yojana
2. Pradhan Mantri Awas Yojana (PMAY)
Pradhan Mantri Awas Yojana (PMAY) is a government personal loan scheme that aims to provide affordable housing, especially for people from the economically weaker sections of society and middle-income groups in both urban and rural areas. One of the main features of PMAY is the Credit-Linked Subsidy Scheme (CLSS), which provides interest of up to 6.5% on housing loans for 20 years. PMAY makes homeownership a possible dream for many and helps people have a roof of their own.
Read More: Pradhan Mantri Awas Yojana
3. Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is a government subsidy loan scheme that was launched to provide financial support to small and marginal farmers to invest in agricultural-related practices and improve their income. Under this government scheme, eligible farmers receive direct cash transfers of Rs. 6000 per year, released in three instalments. This income support helps farmers meet essential agricultural expenses like seeds, fertilisers, and other inputs. The scheme serves as a safety net during tough times for the farmers.
Read More: Pradhan Mantri Kisan Samman Nidhi
4. Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM)
Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM) is a flagship initiative by the government of India aimed at reducing urban poverty and enhancing livelihood opportunities for the urban poor. The govt scheme focuses on providing skills training and self-employment opportunities through workshops like Skill Training for Employment, Support for Street Vendors, Self-Help Groups, and others. DAY-NULM aims to improve the living standards of the urban poor and contribute to the overall economic growth and development in urban areas.
Read More: Deendayal Antyodaya Yojana
5. Dairy Entrepreneurship Development Scheme (DEDS)
The Dairy Entrepreneurship Development Scheme (DEDS) is a government subsidy for businesses that aims to promote self-employment and entrepreneurship in the dairy sector to enhance milk production and improve the livelihoods of dairy farmers. This MSME Loan Subsidy Scheme provides financial aid and support for setting up dairy farms, processing units, and related activities like the production of dairy products like cheese, butter, and yoghurt. Beneficiaries can avail loans up to Rs. 20 lakhs with a capital subsidy ranging from 25% to 33%, depending on the category of the entrepreneur.
Read More: Dairy Entrepreneurship Development Scheme
Other Government Subsidy Loan Schemes
There are many other government subsidy loan schemes and govt subsidies for business offered by the government of India. Let us have a look at them for better information.
| Name of the scheme | Objective | Target beneficiaries | Loan amount | Subsidy |
|---|
| Stand-Up India | It is an MSME loan subsidy for women to promote entrepreneurship among SC/ST and women | MSME loan for women eligibility requires that applicants must be from SC/ST communities and women entrepreneurs | Rs. 10 lakhs to Rs. 1 crore | Credit guarantee and lower interest rates |
| Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE) | To facilitate collateral-free loans for MSMEs | MSMEs | Up to Rs. 2 crore | Credit guarantee |
| Pradhan Mantri Rozgar Yojana | To generate self-employment opportunities for the unemployed | Unemployed youth and educated individuals | Up to Rs. 10 lakhs for businesses and Rs. 2 lakhs for services | 15% on project cost or Rs. 7500, whichever is lower |
| National Rural Livelihoods Mission (NRLM) | To reduce rural poverty by promoting self-employment | MSME loan for women eligibility is that the applicant should be from rural poor, especially for women | Varies for self-help groups | Interest subsidy for loans |
| Sub-Mission on Agricultural Mechanisation (SMAM) | To increase the use of modern machinery in agricultural activities | Farmers and farmer-producer organisations | Up to Rs. 25 lakhs for manufacturing and Rs. 10 lakhs for services | 15 to 30% of the project cost |
| Solar Subsidy Scheme (for rooftop solar plants) | To promote renewable energy adoption in households | Households and small businesses | Varies based on capacity | 30% subsidy on the installation cost of solar panels |
Conclusion
The subsidy and government personal loan schemes in India provided by the government of India are launched with one sole purpose, and that is to help the citizens of India and reduce the financial burden from their shoulders.
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