Public-sector banks concerned over rejection rate in PM Vishwakarma scheme

The restrictions make individuals ineligible if they had taken government loans in past five years

Public-sector banks (PSBs) have raised concerns regarding specific restrictions in the PM Vishwakarma scheme that make 

individuals ineligible if they had taken government loans in the past five years, such as under the Prime Minister’s Employment Generation Programme (PMEGP). 

  This restriction has resulted in a rejection rate of nearly 13-14 per cent, according to a senior government official. 

  “The rejection rate in PM Vishwakarma is primarily due to disqualifications stemming from previous loans. Additionally, applicants with a history of non-performing assets (NPAs) are also facing rejections,” the official stated. 

Launched by Prime Minister Narendra Modi on September 17, 2023, during Vishwakarma Jayanti, the PM Vishwakarma Yojana aims to support traditional craftsmanship. It is set to uplift individuals skilled in various traditional crafts, thereby preserving India’s rich cultural heritage. 

“Efforts are underway by banks to reduce the rejection rate by conducting more thorough data analyses. This will help identify potential candidates who may qualify despite past loans or delinquencies,” the official added. 

As of January 8, 2025, PSBs have received 820,000 applications for the scheme, with 220,000 getting sanctioned. Of this, 160,000 loans have already been disbursed.

 

The scheme targets a crucial segment of the workforce engaged in the informal or unorganised sector, where artisans — known as Vishwakarmas — practice trades such as blacksmithing, goldsmithing, pottery, carpentry, or sculpting. 

These skills are often passed down through generations, adhering to the guru-shishya model of mentorship that fosters the continuity of age-old traditions. 

Notably, the PM Vishwakarma Yojana is fully funded by the Union government, with a financial outlay of Rs 13,000 crore for a five-year period (FY24-FY28). 

The scheme also aims to enhance the quality and market accessibility of artisan products, integrating these skilled individuals into both domestic and global value chains. 

Key benefits of the initiative include improved access to tooling facilities for micro, small, and medium enterprises (MSMEs), training programmes to develop industry-ready manpower, and tailored consultancy and job work services to address specific industry needs. 

As of January 1, 2025, State Bank of India (SBI) received around 346,000 applications. About 305,000 were processed, 21,904 sanctioned, and 20,193 disbursed. Bank of Baroda (BoB) got 121,000 applications, sanctioning 21,961, while Union Bank of India processed 63,193 applications, sanctioning 8,023. 

Last week, M Nagaraju, Secretary of the Department of Financial Services (DFS) reviewed the progress of financial inclusion schemes with heads of PSBs and senior executives of private banks. 

 The review meeting also included virtual participation by senior executives from the Small Industries Development Bank of India (Sidbi), Mudra Ltd, Indian Banking Association (IBA), and National Credit Guarantee Trustee Company Limited (NCGTC).  

Discussions centred around flagship programmes such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), and Stand-Up India. 

Status check

  Applications for PM Vishwakarma scheme at state-owned banks as on Jan 8

  Sent to banks: 824,067

  Processed: 642,568

  Sanctioned: 218,662

  Disbursed : 160,436