STOCK MARKET BSE NSE

Banks stall PM’s employment programme for rural youth

Prime Minister Narendra Modi wants youth to be job-creators, not job-seekers.

Published: 25th November 2017 11:18 PM  |   Last Updated: 26th November 2017 08:07 AM   |  A+A-

PM Narendra Modi (File | AP)

NEW DELHI: Prime Minister Narendra Modi wants youth to be job-creators, not job-seekers. But the scheme that carries the name of his office—the Prime Minister Employment Generation Programme (PMEGP)—is faring poorly.

The consolation for Modi’s government is that the programme, that was begun in August 2008, was doing little better for the most part of the UPA years.

In the last two years, the scheme, through which enterprising youth are granted soft loans to start their own businesses, has had a success rate of just 9 per cent.

Official data shows that in 2013-14, the year before the NDA Modi government came to power, the scheme recorded a success rate of 12 per cent, with 40,961 applicants being sanctioned loans out of the 3,33,174 applications received.

In 2010-2011, the scheme put up its best show. The success rate was a high 25 per cent. Banks and financial institutions were enthusiastic as they gave loans to 20,016 applicants of a total 74,214 applicants.
However, since then, though the percentage of sanctioned applications has decreased, the absolute numbers of beneficiaries and applicants have increased. More than 7 lakh people have applied to avail the benefits in 2015-16 and 2017-18 (till November 22). Only about 64,000 have got loans.

Shortly after it was launched in 2008, the Khadi and Village Industries Corporation (KVIC) was made the nodal agency. The applications are vetted by the KVIC before a credit-linked subsidy scheme is sanctioned.

The latest data of the PMEGP shows that while a total 7,02,305 applications were received, only 5,33,526 were put before district-level task force committees. The committees forwarded 3,26,644 to banks for grant of loans. Finally, banks sanctioned loans to only 63,889 applicants.

A whopping 6,36,000 of the over 7 lakh applications were rejected. “Banks have often complained that they don’t get complete applications. At times projects for which loans are sought are not viable. Moreover, applicants also don’t provide all the documents. Bank accounts of applicants are also looked into before considering grant of loans,” said an official.

D S Rawat, secretary general of ASSOCHAM, said PMEGP is an effective scheme aimed at reducing unemployment and generating sustainable employment opportunities in rural and urban India. “There is a need for banks and other institutions to put in more efforts to meet the targets. Moreover, banks have also become more cautious due to many instances of defaults,” he said.

He added that the entire economy is under pressure and start-ups are not taking-off. The MSME ministry has recently decided to increase the budget allocation by around Rs 200 crore to Rs 1,224 crore.

Stay up to date on all the latest The Sunday Standard news with The New Indian Express App. Download now

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp