AHMEDABAD: Job creation under the Prime Minister’s Employment Generation Scheme (PMEGS) has been declining, despite increased subsidies and average central government grants to Gujarat over the past three years, the Rajya Sabha was recently informed.
In the pandemic-affected year of 2021-22, the scheme created 33,144 jobs in the state, which dropped to just 24,000 in 2023-24, raising concerns over the effectiveness of the programme in sustaining employment growth.
According to the Centre, Gujarat received a subsidy of Rs 28,704.84 lakh under the PMEGS during 2021-22. This subsidy supported 4,143 units and created employment opportunities for approximately 33,144 youths, the Ministry of Micro, Small, and Medium Enterprises stated.
In 2022-23, the subsidy allocation dropped to Rs 24,182.62 lakh, benefiting 3,071 units and generating jobs for about 24,568 individuals. The reduction in subsidy and employment coincided with efforts to stabilise the post-pandemic economy, reflecting a shift in the scheme’s outreach and impact.
However, despite a subsidy increase to Rs 32,124.58 lakh in 2023-24, the number of assisted units further decreased to 3,000, with only 24,000 jobs created.
This decline in employment generation, even with higher subsidies, raises questions about the scheme’s efficiency.
The Centre said that the scheme aims to boost project funding and expand inclusivity. It has raised the maximum project cost to Rs 50 lakh for the manufacturing sector and Rs 20 lakh for the service sector, doubling the earlier limits.
In a significant move toward inclusivity, the scheme now includes applicants from aspirational districts and transgender individuals under the special category, making them eligible for higher subsidies.
Encouragingly, the unemployment rate dropped sharply to 2.3 per cent in 2023-24, signaling a potential recovery in urban employment.