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Nirvik Scheme (Niryat Rin Vikas Yojana)

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The NIRVIK Initiative (Niryat Rin Vikas Yojana) is a special scheme launched by the Export Credit Guarantee Corporation of India (ECGC) to facilitate loan financing. It also contributes to greater finance availability for small-scale exporters. The initiative was unveiled by India’s Finance Minister during the Union Budget for 2020-21, and it was stated that it will enhance the country’s export sector. 

The scheme’s main aim is to provide sufficient insurance coverage for exporters while simultaneously reducing costs for small-scale exporters. It is also expected that such a measure will result in increased export credit disbursement. This initiative was introduced at a time when 10 of the 30 exporting industries had a significant decrease in outbound shipping in 2019. India’s exports decreased sharply for the fifth time in a row in December 2019, resulting in a trade deficit of USD 118.10 billion. Further, the scheme’s development was essential since exporters were concerned about the availability of financing. 

Features of The NIRVIK Scheme:

  1. Growth of the trade sector-: The central government’s major goal is to provide a much-needed boost to the export and commercial sectors. According to estimates, the development of this scheme will increase export credit by 30%.
  2. Simple loan application -: Under this initiative, exporters would be able to apply for loans from financial organizations. The initiative also assures that the process of applying for business finance will be easier. Banks will also be able to disburse loans more efficiently.
  3. Rate of interest on loans -: Any small exporter who applies for a business loan under this initiative will be charged an annual interest rate of 7.6 percent.
  4. Coverage principal and interest amounts -: With the start of this new central government program, small exporters will be entitled to a minimum of 90 percent coverage from the central authority, on both the principal and interest sums.
  5. Refunding bank losses -: An essential declaration clarifies that banks will no longer suffer as a result of loan nonpayment. It will be the ECGC’s responsibility to refund the banks if an exporter fails to return the credit amount.
  6. Reduction in insurance premium rates-: Insurance premium costs are being reduced since insurance coverage are required for both small and large exporters. The yearly insurance premium has been reduced from 0.72 % to 0.60 % under the new scheme’s guidelines. This facility will be available exclusively to a select group of exporters. 
  7. Tenure of the program -: The respective minister has said that the scheme would continue for five years once it is officially launched.
  8. Bank refund period -: Small exporters may experience financial losses and fail to repay their bank loan. The program guarantees banks that if they claim damages, they would receive 50% of the credited amount. Within 30 working days, the funds will be transferred to the bank.
  9. Encourage banks to make loans -: As this scheme protects banks as well, these financial institutions will be less inclined to reject a loan application from a small exporter. 

Key Highlights of the NIRVIK Scheme:

The following are the scheme’s main highlights:

  1. It currently offers a credit guarantee of up to 60% loss.
  2. To improve export credit disbursement
  3. Improves insurance coverage
  4. Premium reduction for small exporters
  5. The procedure for settling claims has been simplified.
  6. In five years, it is expected to promote exports of approximately Rs. 30 lakh crore. 

Eligibility to Apply for Benefits:

  • Small exporters only: Only small exporters would be eligible to register for and get the benefits of this new centrally sponsored initiative, according to the scheme guidelines.
  • Indian-owned businesses:  In order to benefit from this plan, the business must be owned by an Indian citizen.
  • Bank account limit: The scheme details state that the low premium rate would only be available to exporters with bank account limits that do not exceed Rs. 80 crore.

The NIRVIK Scheme’s Benefits:

  1. The NIRVIK Scheme will play a key role in expanding exporters’ access to and affordability of credit, making Indian exports more competitive.
  2. It will eliminate red tape and other procedural restrictions in order to become more exporter friendly.
  3. With variables such as capital relief, improved liquidity, and rapid claim settlement in play, extended insurance coverage is suggested to lower credit costs.
  4. MSME’s (Micro, Small, and Medium Enterprises) will benefit as well due to improved ease of doing business and simplified ECG processes. 

How do Exporters Apply To the Initiative?

The NIRVIK initiative will help to protect the interests of small exporters. It will encourage them to take more chances since they would know the central government will protect them in the event of a financial crisis. These initiatives will help the country’s trade and commerce sectors. As a result, the nation’s overall financial revenue will rise.

Documents Required for the Application: 

  • Business registration documents
  • GST certificate 
  • Business PAN Card 
  • Identity proof of the owner
  • Bank loan certificates 
  • Insurance documents

Related Frequently Asked Questions and Answers:

1Q. What is the aim of the Niryat Rin Vikas Yojana? 

Answer: The scheme’s main aim is to provide sufficient insurance coverage for exporters while simultaneously reducing costs for small-scale exporters. It is also expected that such a measure will result in increased export credit disbursement. This initiative was introduced at a time when 10 of the 30 exporting industries had a significant decrease in outbound shipping in 2019. India’s exports decreased sharply for the fifth time in a row in December 2019, resulting in a trade deficit of USD 118.10 billion. Further, the scheme’s development was essential since exporters were concerned about the availability of financing. 

2Q. What are the benefits of the Niryat Rin Vikas Yojana? 

Answer: The benefits of the Nirvik scheme are-

  • The NIRVIK Scheme will play a key role in expanding exporters’ access to and affordability of credit, making Indian exports more competitive.
  • It will eliminate red tape and other procedural restrictions in order to become more exporter friendly.
  • With variables such as capital relief, improved liquidity, and rapid claim settlement in play, extended insurance coverage is suggested to lower credit costs.
  • MSME’s (Micro, Small, and Medium Enterprises) will benefit as well due to improved ease of doing business and simplified ECG processes. 

3Q. What are the features of the Niryat Rin Vikas Yojana? 

Answer: The features of the Nirvik scheme are-

  • Growth of the trade sector: The central government’s major goal is to provide a much-needed boost to the export and commercial sectors. According to estimates, the development of this scheme will increase export credit by 30%.
  • Simple loan application: Under this initiative, exporters would be able to apply for loans from financial organizations. The initiative also assures that the process of applying for business finance will be easier. Banks will also be able to disburse loans more efficiently.
  • Rate of interest on loans: Any small exporter who applies for a business loan under this initiative will be charged an annual interest rate of 7.6 percent.
  • Coverage principal and interest amounts: With the start of this new central government program, small exporters will be entitled to a minimum of 90 percent coverage from the central authority, on both the principal and interest sums.
  • Refunding bank losses: An essential declaration clarifies that banks will no longer suffer as a result of loan nonpayment. It will be the ECGC’s responsibility to refund the banks if an exporter fails to return the credit amount.
  • Reduction in insurance premium rates: Insurance premium costs are being reduced since insurance coverage are required for both small and large exporters. The yearly insurance premium has been reduced from 0.72 % to 0.60 % under the new scheme’s guidelines. This facility will be available exclusively to a select group of exporters. 
  • Tenure of the program: The respective minister has said that the scheme would continue for five years once it is officially launched.
  • Bank refund period: Small exporters may experience financial losses and fail to repay their bank loan. The program guarantees banks that if they claim damages, they would receive 50% of the credited amount. Within 30 working days, the funds will be transferred to the bank.
  • Encourage banks to make loans: As this scheme protects banks as well, these financial institutions will be less inclined to reject a loan application from a small exporter. 

4Q. Who launched the Niryat Rin Vikas Yojana? 

Answer: The NIRVIK Initiative (Niryat Rin Vikas Yojana) is a special scheme launched by the Export Credit Guarantee Corporation of India (ECGC) to facilitate loan financing. It also contributes to greater finance availability for small-scale exporters. The initiative was unveiled by India’s Finance Minister during the Union Budget for 2020-21, and it was stated that it will enhance the country’s export sector. This initiative was introduced at a time when 10 of the 30 exporting industries had a significant decrease in outbound shipping in 2019. 



Last Updated : 03 Nov, 2022
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