THIRUVANANTHAPURAM: More than a lakh people working with thousands of small-scale enterprises in the state are in financial distress due to the inordinate delay in inspections carried out under the Prime Minister’s Employment Generation Programme (PMEGP).
Since 2017-18, unit inspections, which are a prerequisite for closing loans under this scheme, have not been conducted. It has left around 6,500 units and approximately 26,000 entrepreneurs in a precarious situation.
Although subsidies ranging from 15 to 35 per cent of the project cost have been deposited in the entrepreneurs’ bank accounts, banks are unable to close these loans without the inspections being done. This has forced many to continue repaying the entire loan amount along with interest.
An estimated `62 crore in subsidies remains on hold, troubling the small business owners. “Entrepreneurs are unable to reclaim pledged securities or secure additional loans. Many are trapped due to this and some say they are on the brink of suicide,” said Aziz Avelam, state organisation secretary of the Kerala Small Enterprises Council (KSEC).
Implemented by the Central Government through the Khadi and Village Industries Commission (KVIC), the PMEGP has enabled thousands of youth in Kerala to start their own businesses and has created numerous job opportunities.
Service industries can secure loans up to `20 lakh while production industries can get up to Rs 50 lakh. Urban entrepreneurs receive a 15-25 per cent subsidy while their rural counterparts are eligible for up to 35 per cent.
Arundathy from Thrissur, who started a flour mill with a Rs 2.5 lakh loan in 2020 is one of the many affected. “We have a subsidy of Rs 1.4 lakh in our bank account, but it cannot be released. We approached the District Industries Centre (DIC) multiple times but they say a Mumbai-based agency is responsible and we don’t have their contact,” said her husband, Ajayan Moothery.
Initially, inspections were handled by the Khadi and Village Industries Commission (KVIC), Khadi and Village Industries Board (KVIB), and District Industries Centre (DIC). Since 2016-17, this responsibility has been outsourced to Mumbai-based agency GENSIS International. This has left many entrepreneurs uncertain about where to address their grievances.
Asha Balan started a stitching unit in Kozhikode and has repaid her loan of Rs 78,000. But, she cannot close her account due to the pending inspection.
Entrepreneurs are listed in the CIBIL score for missing timely repayments. This affects their eligibility for further loans.
“I took a loan of `2.65 lakh in 2018 and I have only `50,000 left to repay. But, the subsidy has not been released. This has affected my CIBIL score and I cannot secure further loans for my children’s education or home renovation as we are living in flood-prone areas,” said Premlal from Alappuzha.
Despite numerous complaints made to the Khadi Commission and to the State government, no solution has been made.
“As the Khadi Commission operates under the Ministry of Micro Small and Medium Enterprises (MSME), we are conducting a campaign to send thousands of letters to the Prime Minister. Entrepreneurs facing this crisis due to the lack of inspections and interested in sending such letters can contact the committee at, 9447023851,” added Aziz Avelam.