The Himachal Pradesh Government has extended the Mukhya Mantri Laghu Dukandar Kalyan Yojana to urban areas of the state to provide financial relief and economic support to small shopkeepers, Chief Minister Thakur Sukhvinder Singh Sukhu said today.
The scheme, now notified as Mukhya Mantri Laghu Dukandar Kalyan Yojana–Shahri, will be implemented across all Urban Local Bodies (ULBs) in the state. The formal notification has already been issued. The Chief Minister said the scheme was earlier launched in rural areas in 2023 and its expansion to urban areas was announced in the Budget 2025–26.
He said that a large number of small traders in urban areas depend on petty businesses for their livelihood but often face financial constraints and limited access to institutional support. As a result, many are unable to repay bank loans, leading to their accounts being classified as Non-Performing Assets (NPAs). To address these challenges, the government decided to extend the welfare scheme to urban areas.
Under the scheme, distressed small shopkeepers with an annual turnover of less than Rs. 10 lakh, who have taken business loans from banks and whose accounts have turned NPAs, will be provided One Time Settlement (OTS) assistance of up to Rs. 1 lakh. The entire OTS amount will be borne by the state government.
The Chief Minister said that beneficiaries whose total outstanding amount, including principal and interest, is up to Rs. 1 lakh will receive full settlement. In cases where the outstanding amount exceeds Rs. 1 lakh, the beneficiary will have to pay the remaining amount, while the government will provide Rs. 1 lakh as OTS support. However, the maximum loan amount availed by any beneficiary should not exceed Rs. 10 lakh.
He said the scheme has been designed with an emphasis on transparency and ease of access. A well-defined institutional mechanism involving Urban Local Bodies, banks, a Nodal Bank and the Urban Development Department has been established to ensure timely settlement of claims and smooth closure of NPA accounts. No interest will be charged for the intervening period and no processing or administrative fees will be levied, ensuring maximum benefit to genuine small shopkeepers.
The scheme will 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 repairers, street vendors and other small retailers operating in urban areas.
The Chief Minister said the scheme will 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 benefits reach only deserving applicants. Loans covered under CGTMSE or other guarantee trusts will be eligible only if the uncovered amount is less than Rs. 1 lakh.
Applicants must be permanent residents of Himachal Pradesh, above 18 years of age, and no family member should be in regular government service. Applications will be submitted to the concerned Urban Local Bodies, which will verify and forward them to banks. Banks will submit monthly OTS claims through the Nodal Bank to the Urban Development Department, without charging any fee from beneficiaries.
The Chief Minister said the scheme will help small shopkeepers clear debts, close NPA accounts, revive their businesses and strengthen their financial position, thereby promoting inclusive growth and boosting the urban economy of the state.
