Government Expands Mukhya Mantri Laghu Dukandar Kalyan Yojana to Urban Areas: CM Sukhu.
Shimla:
In a major relief to small shopkeepers, Chief Minister Sukhvinder Singh Sukhu on Sunday announced the expansion of the Mukhya Mantri Laghu Dukandar Kalyan Yojana to urban areas of Himachal Pradesh. The scheme, aimed at providing financial relief and economic support to small traders, has been notified as “Mukhya Mantri Laghu Dukandar Kalyan Yojana–Shahri” and will be implemented across all Urban Local Bodies (ULBs) in the state.
The Chief Minister said that the welfare scheme had been successfully implemented in rural areas since 2023 and was now being extended to urban areas, as announced in the Budget 2025–26. He said that a large number of small traders in towns and cities depend on small businesses for their livelihood but often lack financial capacity and access to institutional support.
“Due to financial stress, many small shopkeepers are unable to repay bank loans, resulting in their accounts being declared Non-Performing Assets (NPAs). Keeping these challenges in view, the State Government has decided to extend this scheme to urban areas to provide much-needed relief,” he said.
Under the scheme, distressed small shopkeepers with an annual turnover of less than Rs. 10 lakh, who have availed business loans from banks and whose accounts have turned NPAs, will be provided One Time Settlement (OTS) assistance of up to Rs. one lakh through banks. The entire OTS amount will be borne by the State Government.
The Chief Minister explained that beneficiaries whose total outstanding amount, including principal and interest, is up to Rs. one lakh will get full settlement under the scheme. In cases where outstanding dues exceed Rs. one lakh, the beneficiary will have to pay the remaining amount, while the government will provide Rs. one lakh as OTS support. However, the maximum loan amount availed by any beneficiary should not exceed Rs. 10 lakh.
CM Sukhu said that the scheme has been designed with a strong emphasis 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 added that no processing or administrative charges would be levied on beneficiaries, ensuring that maximum benefit reaches genuine small shopkeepers.
The scheme will benefit a wide range of small traders, including 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.
The Chief Minister said that the scheme would apply to collateral-free business loans taken between 1 April 2020 and 31 March 2025. Cases involving willful default, fraud or malfeasance will not be covered, and banks will identify such cases to ensure that only deserving beneficiaries receive the benefit. Loans covered under CGTMSE or other guarantee trusts will be eligible only if the remaining uncovered amount is less than Rs. one lakh.
He further informed 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 will be submitted to the concerned Urban Local Bodies, which will verify and forward them to banks for further processing. Banks will submit monthly OTS claims through a Nodal Bank to the Urban Development Department.
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 Himachal Pradesh.
