Himachal government expands Mukhya Mantri Laghu Dukandar Kalyan Yojana to urban areas

Shimla (Himachal Pradesh) [India], December 22 (ANI): Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Sunday said that the state government has expanded the Mukhya Mantri Laghu Dukandar Kalyan Yojana to urban areas of Himachal Pradesh with the objective of providing financial relief and economic support to small shopkeepers.
The scheme, notified as 'Mukhya Mantri Laghu Dukandar Kalyan Yojana-Shahri', would be implemented in all Urban Local Bodies (ULBs) of the state and the notification in this regard had already been issued, according to an official release.
The Chief Minister said that this welfare scheme had already been implemented in rural areas since 2023, which has now been extended to urban areas as announced in the Budget 2025-26.
He said that a large number of small traders in urban areas earn their livelihood through small businesses but often lack financial capacity and access to institutional support. Due to financial stress, many of them were unable to repay bank loans and their accounts turned into Non-Performing Assets (NPAs). Keeping these challenges in view, the state government had decided to extend this welfare scheme to urban areas to provide much-needed relief.
Under the scheme, distressed small shopkeepers with an annual turnover of less than Rs 10 lakh, who have availed business loans from banks and have been declared NPAs, would be provided One Time Settlement (OTS) assistance of up to Rs 1 lakh through banks. The OTS amount would be borne entirely by the state government.
The Chief Minister said that beneficiaries whose total outstanding amount, including principal and interest, was up to Rs 1 lakh would get full settlement under the scheme. In cases where outstanding dues exceed Rs 1 lakh, the beneficiary would have to deposit the remaining amount themselves, while the state government would provide Rs 1 lakh as OTS support. However, the maximum loan amount availed by any beneficiary should not exceed Rs 10 lakh, the release said.
Chief Minister Sukhu further said that the scheme has been designed with a strong focus on transparency and ease of access. A clearly defined institutional mechanism involving Urban Local Bodies, banks, a Nodal Bank and the Urban Development Department has been put in place to ensure timely settlement of claims and smooth closure of NPA accounts.
He said that by removing the burden of interest during the intervening period and by not allowing any processing or administrative charges, the state government had ensured that the maximum benefit reaches genuine small shopkeepers.
He said that the scheme would benefit small fruit and vegetable vendors, tea stall and dhaba owners, barbers, paan shop owners, cobblers, chaat vendors, garage owners, tailors, grocery shop owners, mobile repairing shop owners, street vendors and other small retail shopkeepers operating in urban areas of the state.
He said that the scheme would apply to collateral-free business loans taken between April 1, 2020 and March 31, 2025. Cases involving willful default, fraud or malfeasance would not be covered under the scheme and banks would identify such cases to ensure that only deserving beneficiaries get the benefit. Loans covered under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) or other guarantee trusts would be eligible only if the remaining uncovered amount was less than Rs 1 lakh.
Chief Minister Sukhu said that applicants must be permanent residents of Himachal Pradesh, above 18 years of age and no family member of the applicant should be in regular government service. Applications would be submitted to the concerned Urban Local Bodies, which would verify and forward them to banks for further processing. Banks would submit monthly OTS claims through a Nodal Bank to the Urban Development Department and no processing or administrative fee would be charged from the beneficiaries.
The Chief Minister said that the scheme would help small shopkeepers clear their debts, close NPA accounts, revive their businesses and strengthen their economic condition, thereby contributing to inclusive growth and strengthening the urban economy of the state. (ANI)