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India is slowly taking a leading position in the field of exports these days. It exports many items and products to different countries of the globe. The Indian government is coming up with various schemes to boost exports of the country. Many exporters get the benefits of these government schemes every year. These schemes play an important role for startups and beginners who want to succeed in the export field. Nirvik scheme is one such scheme started by the government to boost the export sector.
This article will describe the Nirvik scheme, its benefits and objectives, eligibility, the process to apply for it, and every other important detail related to it.
Introduction of Nirvik Scheme
The full form of the Nirvik Scheme is Niryat Rin Vikas Yojana. This is a scheme introduced by ECGC (Export Credit Guarantee Corporation of India). This scheme simplifies the process of loans and improves the credit availability of small-scale export businesses.
Our Finance Minister Nirmala Sitharama made the announcement of this scheme on February 1 during the Union Budget 2020-21. Another name of the Nirvik Scheme is Export Credit Insurance Scheme (ECIS). Under this scheme, one can get insurance cover of 90% of interest and principal. It covers pre as well as post-shipment credit.
Key points about Nirvik Scheme
- Increase in insurance cover for banks up to 90% for working capital loans for the MSME sector.
- Aims to lower foreign and rupee export credit interest rates below 4% and 8% for the exporters.
- Existing insurance covers will be the same for all the banks.
- Helping the banks to increase export credit lending to the MSME sector.
- Banks pay a premium to ECGC every month on the interest and principal.
- Compulsory checking of bank records and documents in case of losses above Rs. 10 crores.
- The scheme is applicable for 5 years.
- Premium rates of 0.60 per annum in case of accounts below Rs. 80 crore and 0.72 per anum in the case of accounts above Rs. 80 crores.
- Aims to ease the process of settlement of claims.
What are the benefits of the Nirvik Scheme?
The Nirvik scheme has ample benefits for new exports and startups. Let us have a look at some of the major benefits of the scheme:
- This scheme will help MSME exporters to do business easily. The Nirvik Scheme also simplifies ECGC procedures.
- This scheme will reduce the cost of insurance and will provide reimbursement of taxes.
- Indian exporters will become more competitive with the help of this scheme.
- The government will pay premiums.
- The cost of credit is reduced because of capital relief.
- Insurance coverage is increased from 60% to 90% of Interest and Principal.
- Exporters will get working capital timely for doing business.
Eligibility for Nirvik Scheme
Nirvik Scheme has some eligibility criteria. It is as under:
- The scheme benefits are provided to only small exporters.
- This scheme benefits apply to Indian citizens only.
- Lower premium rate applies only to the exporters who have bank accounts with an amount less than Rs. 80 crores.
The objective of the Nirvik Scheme
The Nirvik Scheme is introduced to provide credit to the exporters. It aims to simplify the process of exports. Apart from that, the scheme will also provide the benefit of reimbursement of taxes.
In addition to that, the scheme aims to reduce the cost of loans and offer timely working capital to the exporters. Moreover, the scheme will provide additional facilities to the bank.
How to apply for the Nirvik scheme online?
The Nirvik Scheme has introduced just a few weeks ago. However, there is no information available on how to apply for this scheme. The detailed process to apply for this scheme will be announced by the Central Government. You will get all the updates on the official website as well as on this website.
Important Documents to apply for the Nirvik scheme
If you want to apply for the Nirvik scheme, you will need the following documents.
- Business registration documents.
- PAN card of exporters.
- GST certificate.
- Insurance documents.
- ID proof such as Aadhar card or passport of business owner.
- Bank loan certificates.
Conclusion
Overall, it’s a great initiative taken by the government. It will lead to the expansion of the exports sector in the country.
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