Unemployment among educated youth has long been a major socio-economic concern in the State of Sikkim. Despite improvements in literacy and education, a significant number of young people continue to face difficulties in securing stable employment. Recognizing the need for sustainable solutions, the Government of Sikkim introduced the Skilled Youth Start-Up Scheme (SYSS) under the Department of Commerce and Industries. This scheme is designed as a structured pathway for self-employment, encouraging educated but unemployed youth to become entrepreneurs. By offering financial assistance in the form of bank-linked loans combined with back-ended government subsidy, SYSS aims to nurture entrepreneurship, generate employment opportunities, and promote balanced economic development across both rural and urban areas of the state.
Background and Rationale of the Scheme
The Government of Sikkim has consistently adopted a people-centric approach to governance, placing strong emphasis on employment generation and economic self-reliance. Traditional dependence on government jobs has limited the scope for large-scale employment, making entrepreneurship an essential alternative. The Skilled Youth Start-Up Scheme was conceptualized to address this gap by empowering youth to establish viable business ventures in diverse sectors such as manufacturing, services, agriculture, tourism, and allied activities.
The scheme supports bankable and financially viable projects by providing 50% subsidy for Below Poverty Line (BPL) beneficiaries and 35% subsidy for others, thereby reducing the financial burden on first-time entrepreneurs. This initiative not only promotes self-employment but also contributes to wealth creation, skill development, and long-term economic stability.
Objectives of the Skilled Youth Start-Up Scheme
The primary objectives of the SYSS are as follows:
- To promote entrepreneurial mindset and business skills among educated unemployed youth
- To encourage the establishment of commercially viable and bankable enterprises
- To generate equitable entrepreneurial opportunities in both rural and urban areas
- To reduce dependency on government employment
- To provide financial support through back-ended subsidy assistance
- To align youth entrepreneurship with state development priorities and policies
- To create sustainable income sources and employment opportunities
Nodal Department and Administrative Structure
The Department of Commerce and Industries serves as the nodal department for the Skilled Youth Start-Up Scheme at the state level. The department is responsible for overall policy formulation, coordination, and implementation of the scheme across Sikkim.
At the district level, the scheme is implemented through District Industries Centres (DICs). These centers play a crucial role in appraising project proposals, assessing financial viability, facilitating credit linkage with banks, and coordinating with line departments. This decentralized structure ensures efficient implementation and localized support for beneficiaries.
Areas of Operation
The Skilled Youth Start-Up Scheme is applicable across the entire State of Sikkim.
- Covers both rural and urban areas
- Accessible to youth from all districts
- Designed to promote balanced regional development
By extending its reach statewide, the scheme ensures that entrepreneurial opportunities are not limited to urban centers alone.
Nature of Financial Assistance
Financial assistance under the SYSS is provided in the form of back-ended subsidy linked to bank loans. The key features include:
- Subsidy rate of 50% for BPL beneficiaries
- Subsidy rate of 35% for non-BPL beneficiaries
- Subsidy is released only after bank sanction and disbursement
- The subsidy amount is kept as a fixed deposit in the name of the beneficiary
- Adjustment of subsidy against loan repayment after completion of three years
This structure encourages financial discipline while reducing repayment burden in the long term.
Project Cost and Admissible Assistance
The admissible project cost varies depending on the nature of activity. The project cost includes:
- Capital expenditure
- Working capital requirement for up to three months
However, the cost of land is excluded from the project cost. Expenses related to rented or leased workspaces can be included, subject to a maximum lease or rental period of two years.
Eligibility Criteria
To ensure targeted and fair distribution of benefits, the scheme prescribes specific eligibility conditions:
- The applicant must possess a valid Certificate of Identification (COI) or relevant residential certification
- The applicant must be unemployed and have at least Class V educational qualification
- For technical or manufacturing projects, technical certification is mandatory
- Age limit of the applicant must be between 18 and 45 years
- Only one member per family is eligible
- Annual family income must not exceed ₹8 lakhs
- Beneficiary must not be a defaulter of any bank or financial institution
- Applicant should not have availed subsidy under CMSS or PMEGP
- Mandatory possession of a valid Trade License
- Persons with Disabilities (PWD) are given priority and eligible for 50% subsidy
Promoter’s Contribution
The beneficiary is required to contribute 5% to 15% of the total project cost, depending on the norms of the financing bank. This contribution ensures the applicant’s financial stake in the project and promotes responsible entrepreneurship.
Subsidy Mechanism
The subsidy under the SYSS is classified as back-ended, meaning:
- It is not directly given to the beneficiary
- Transferred online to the financing bank
- Remains locked for a defined period
- Adjusted against loan repayment after the lock-in period
This mechanism safeguards government funds while supporting genuine entrepreneurs.
Activities Covered Under the Scheme
The Skilled Youth Start-Up Scheme supports a wide range of economic activities, including but not limited to:
- Agriculture, animal husbandry, dairy, poultry, and piggery
- Organic farming and greenhouse cultivation
- Food processing and manufacturing industries
- Cottage industries, handicrafts, and bamboo-based enterprises
- Tourism ventures such as paragliding and rural homestays
- IT and IT-enabled services
- Retail businesses, bakeries, restaurants, and beauty parlors
- Training centers, diagnostic centers, and service workshops
Each category has a specified maximum project cost ranging from ₹3 lakhs to ₹20 lakhs.
Training Component
Entrepreneurship training is a mandatory component of the scheme.
- Selected beneficiaries must undergo a 3-day Entrepreneur Development Programme (EDP)
- Training is conducted by RSETI or approved government institutions
- Training must be completed within 60 days of selection
- Certification is mandatory before loan disbursement
This training equips beneficiaries with essential skills in business management, finance, and compliance.
Application Procedure
The application process under the SYSS is conducted in offline mode.
- Applications must be submitted in the prescribed format (Annexure-I)
- Applicants must submit a Detailed Project Report (DPR)
- Applications are addressed to the General Manager, DIC of the respective district
- Acknowledgment with application ID is issued upon submission
This structured process ensures transparency and proper documentation.
Selection of Beneficiaries
Applications are evaluated by a Selection Committee chaired by the General Manager of the District Industries Centre.
- Projects are examined for financial viability and feasibility
- Up to 30 applications are reviewed in a single sitting
- Approved applications are forwarded to headquarters
- Due to Covid-19, scrutiny procedures may be simplified with direct bank submission
Exaggerated project costs solely to claim higher subsidy are strictly discouraged.
Financial Institutions Involved
Loans under the scheme are extended through:
- Nationalized Banks
- Private Sector Banks
- State Cooperative Banks
- State Bank of Sikkim
This wide network ensures easy credit access for beneficiaries.
Loan Repayment
- Repayment of loan and interest is the sole responsibility of the beneficiary
- Early closure of loan requires departmental approval
- Lock-in period:
- Agriculture projects: 1 year
- Other projects: 3 years
Monitoring and Evaluation
To ensure effective implementation and utilization of subsidy:
- 50% of projects are physically verified by DIC
- 25% are verified by a higher-level monitoring committee
- Quarterly review conducted by the Director (MSME)
This ensures accountability and performance tracking.
Documents Required
Applicants must submit:
- Passport-size photographs
- Residential and identity certificates
- Educational qualification certificates
- Birth certificate
- Unemployment card
- Project reports
- Income and BPL certificates (if applicable)
- Relevant licenses and NOCs
