Guidelines and Modalities of Gramodyog Rojgar Yojana



              At the field level, General Manager, District Industries Centre receives the applications and places the same before the District Technical Committee consisting of the following members as per guidelines issued by Govt. of Orissa in Industries Department vide their memo No.563 dated 6.1.2002.








Member Convener.


A.P.D. (Trg.), DRDA








Lead Dist. Manager




Representative of KVIB as well as KVIC



            The I.P.Os and Supervisors of Orissa Khadi & Village Industries Board of concerned Blocks and any other officer as considered necessary may be included as special invitee by the Chairman. Since the presence of Lead Bank Manager of the district and representative of Financing Bank is felt important, the G.M, DIC should ensure that the Bank functionaries are included as special invitees to the meeting.

            The Projects with unit cost upto Rs.15,00,000/- can be sponsored to Financing Institutions by the G.M, D.I.C. after approval of the District Technical Committee. But where, project cost exceeds Rs.15,00,000/- General Manager, DIC will forward the proposal to the Director, Industries, Orissa, Cuttack for scrutiny and clearance by State Level Appraisal Committee comprising of the Director of Industries, Orissa, Director of H&CI, Orissa, Secretary, OK&VI Board and Representative of OSFC.


a)                  All Public Sector Banks

b)                  Regional Rural Banks

c)                  Cooperative Banks, approved by Orissa Khadi & Village Industries Board.

Eligible Borrowers:

The eligible agencies under the scheme are

1)                  Individual Artisans/Entrepreneurs.

2)                  Institutions, Cooperative Societies and Trusts

3)                  Self-Helf Groups (S.H.Gs).

§         There is no restriction on income and residence of the beneficiary.

§         Partnership firms, Private Limited Companies, Joint Ventures, Joint Borrowers, Co-obligators or HUF are not eligible under the scheme.

Eligible Projects:

            The Scheme is applicable to all new village industry projects set up in rural area. Any extension or renovation of existing unit will not be eligible for this facility.

Eligible Activities:

            All activities, which do not appear in the Negative List circulated by KVIC are eligible for financing under the scheme.

            “Village Industry” means any industry located in Rural Area, which produces any goods or renders any services with or without the use of power and in which fixed investment per head of any artisan or a worker does not exceed Rs.50,000/-.

·      The total fixed investment (i.e. Cost of building/work-shed and machinery) divided by full time employment should not be more than Rs.50,000/- in a Project.

Negative List

A.            Meat (processing, canning and / or serving) and intoxicant items (production / manufacture / sale)

B.            Cultivation of Crops / Plantation, Animal Husbandry, Pisciculture, Piggery, Poultry etc. and Khadi & Polyvastra.

C.            Any project causing environmental problems.

Location of the Project:

The Project must be installed in “Rural Area” only, “Rural Area” means-

1)           Any area classified as village as per revenue record of the State irrespective of population, and

2)           It also includes an area even if classified as town provided its population does not exceed 20,000 (as per 1991 census.)

Project Cost:

          For individuals / institutions, the minimum ceiling limit is Rs.50,000/- and maximum limit is Rs.25 lakhs.

·        Cost of land should not be included in the Project Cost.

Borrower’s Own Contribution:

          A)     General category    :           10% of Project Costs.

          B)     Weaker Section      :           05% of Project Cost.

·     Weaker Section includes beneficiaries of Women/SC/ST/OBC/Physically Handicapped/Ex-Servicemen and Minority communities.

Quantum of Loan:

            Amount of Loan to be sanctioned by Financing Institution in favour of a beneficiary will be total Project Cost minus Promotor’s contribution. It should be for:

            A)        General Category         :           90% of Project Cost.

            B)        Weaker Section            :           95% of Project Cost.

Margin Money:

            The following amount of margin money is available in case of different category of beneficiaries for setting up village industry.

For the projects upto Rs.10,00,000/-:

            A)        General Category         :           25% of Project Cost.

            B)        Weaker Section            :           30% of Project Cost

For the projects above Rs.10,00,000/-:

            A)        General Category         :           25% up to Rs.10,00,000/- plus 10% of the of the remaining Project cost.

            B)        Weaker Section            :           30% upto Rs.10,00,000/- plus 10% of the remaining project cost.

·        Note that no margin money is available against any old and existing unit as well as extension or renovation of the same.

Duration for submission of claim form:

            The Financing Institution should submit the margin money claim within 3 months from the date of first release of funds to the borrower to Orissa Khadi & Village Industries Board through the concerned GM, DIC. For old claim, if any, which are submitted belatedly, the extract of the Audit Para of the internal inspection of the Bank wherein delay in claiming margin money is mentioned should be submitted by the Financing Institution invariably with their claim papers. These claims will be finalised on the merit of each case as per circular No.MMS/Corres./M-195/2000 dated 27.12.2000 of Khadi & Village Industries Commission.

·      The total capital expenditure in a project should be released towards first instalment before margin money is claimed.


            There is provision for 3 days EDP training for the beneficiaries to be arranged by the State Director, Khadi & Village Industries Commission, Orissa, Bhubaneswar.

Mode of Utilisation of Margin Money:

            As per office order No.1911/REGP/M-211/2002 dated 17.1.2002 of Khadi & Village Industries Commission, the margin money so received by Financing Branch of the Bank from Orissa Khadi & Village Industries Board will be kept in Term Deposit for a period of two years in the name of the beneficiary at the Financing branch and the Bank will not pay any interest on the time deposit and also not charge interest on the corresponding loan portion.

            Since margin money is to be provided under the subsidy (Grant), it will be credited in the borrower’s Bank account after two years. In case, the Bank’s advance goes ’Bad’ before two years is over margin money should be adjusted by the branch to liquidate loan liability of the borrower in part or full with prior approval of Orissa Khadi & Village Industries Board. Any subsequent recoveries should be first adjusted to loan account for liquidation and any surplus, to be remitted to Orissa Khadi & Village Industries Board.