Skill, Labour, Talent for MSMEs: The quantity of micro-enterprises set-up beneath the Modi government’s pro-entrepreneurship scheme Prime Minister’s Employment Generation Programme (PMEGP) has witnessed a decline in FY20 from the preceding year. From 73,427 PMEGP micro-enterprises set-up in FY19, the quantity contracted by 9.2 per cent to 66,653 in FY20, according to the government information. Implemented by the Khadi & Village Industries Commission (KVIC), the estimated employment generated via the beneficiary units simultaneously also declined from 5.87 lakh in FY19 to 5.33 lakh in FY20. The year-on-year (YoY) decline had followed the jump in the quantity of micro firms set-up and estimated individuals employed from 48,398 and 3.87 lakh respectively in FY18.
KVIC Chairman Vinay Kumar Saxena wasn’t promptly obtainable for comments for this story.
“PMEGP is a major credit-linked subsidy programme aimed at generating self-employment opportunities through setting up of micro-enterprises in the non-farm sector by helping traditional artisans and rural/urban unemployed youth. Under the scheme, to set up new units, beneficiaries can avail loan up to Rs 25 lakh in the manufacturing sector and Rs 10 lakh in the service sector, with subsidy of 15 per cent to 35 per cent for different categories,” MSME Minister Nitin Gadkari stated sharing PMEGP information in a written reply to a query in the Rajya Sabha. The scheme was launched in 2008.
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While the YoY decline wasn’t overwhelming, the effect of Covid on PMEGP beneficiaries was very considerable. According to a current study by KVIC, 88 per cent of micro beneficiaries beneath PMEGP have been ‘negatively affected’ due to the Covid pandemic. Among the impacted 88 per cent, 57 per cent stated that their units have been shut down temporarily for the duration of the Covid period, when 30 per cent reported a drop in production and income. Under PMEGP, as of March 24, FY21, 60,867 micro enterprises have been supported with margin funds of Rs 1,834.2 crore, according to the information obtainable with the KVIC.
“While Covid is among the key reasons for the impact on enterprises but isn’t the only one. Impact on small businesses is a case of multi-organ failure. Demonetisation, GST complexities, etc., were other reasons continuing to haunt MSMEs. Covid must have impacted around 20-25 per cent MSMEs who either reduced their production or shut their operations but issues around GST compliance and demonetisation have been other major reasons,” Vishwanath, Co-Chairman, Industry Committee, PHD Chamber of Commerce and Industry had told TheSpuzz Online.