PM employment scheme faces delays in loan sanctioning: Study

The Prime Minister's Employment Generation Programme (PMEGP) is plagued by delay in the process of sanctioning of loans at different stages, a study study commissioned by the MSME Ministry has observed.
The evaluation study, conducted by the Management Development Institute, Gurugram, to examine the impact of the programme and identify issues, has suggested linkage with Aadhar to authenticate the trainee identity and progress.
The study highlighted problem areas like collaterals asked for loans, physical verifications and delay in adjustment of margin money.
It recommended increased availability of field officers as they are a key connect between beneficiary and agencies and are currently sparse.

The study has also suggested that for motivating beneficiaries to repay loans, the people whose margin money has been successfully adjusted, need to be rewarded with an option of more subsidised loans (at say 15 per cent of subsidy).
The study called for tying up with MOOCs (Massive Open Online Coursewares) of recognised reputational technical and managerial institutes (such as IITs and IIMs) for improving the EDP Training content.

It said the agencies could consider hiring interns from leading management institutions from India and abroad for further handholding of beneficiaries.
The study advocated enforcement of deadlines (either of 60 or 90 days) on banks to decide about decision (acceptance or rejection) of the loan application and suggested that the cash credit account (CCA) component of the loan could be reduced. Maximum CCA may range up to 40 per cent of total loan.

The study observed that the PMEGP has been able to provide sustainable employment and units set up under the scheme provided employment throughout the year for many years. It pointed out that the scheme has a good reach and has targeted almost all sections of the society based on social background, education background, location etc.
It found that the average under the scheme per project was 7.62 persons and the average cost of generating unit employment was Rs 96,209, with Nagaland incurring the maximum cost at Rs 2,75,621 and Tamil Nadu having the minimum cost at Rs 64,735.
The study, which was commissioned in January this year, was presented to Union MSME Minister Giriraj Singh here, an official statement said.

The sample size was selected on stratified random sampling basis. The number of micro units set up from 2012-13 to 2015- 16 was 2,00,885 units.
According to official estimates, employment generation under the PMEGP has declined consistently after 2012-13. While 4,28,246 jobs were generated in 2012-13 under the scheme, in 2013-14 the number fell to 3,78,907 and further dipped to 3,57,502 in 2014-15.
In 2015-16, the jobs creation stood at around 3,23,000, whereas according to provisional estimates, between March and October 2016, employment was generated for 1,87,000 persons.
The government implemented PMEGP in 2008 by merging two schemes in operation namely Prime Minister's Rojgar Yojana and Rural Employment Generation Programme with Khadi and Village Industries Commission as the nodal agency.