PM employment scheme faces delays in loan sanctioning

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.