The government has failed to fulfil its promise of creating over six lakh jobs through the Prime Minister’s Employment Generation Programme (PMEGP) during 2008-09, allegedly due to a delay in issuance of guidelines by the micro, small and medium enterprises (MSME) ministry, which is administering the scheme, and reluctance of banks to disburse loans.
The government had set a target of part-financing 61,227 projects and generating 6,12,245 jobs in 600-odd districts of the country during 2008-09. However, at the end of March 2009, it could fund only 36,287 projects, giving work to 3,62,870 people.
“The main reason for failing to achieve the target is the delay in issuing the working model for the programme. We had only three-four months available to us for implementing the programme, which was not feasible. Then there were some banks that did not disburse loans in time as the global credit shortage hit their finances,” said a senior official in the MSME ministry. However, the official refused to name the banks that could not disburse loans for new projects.
As a consequence, the government was left with 47,000 unprocessed applications at the end of March, which it aims to process this fiscal. This will be over and above the annual target of financing 61,697 projects and generating 6,16,937 employment opportunities, but the MSME ministry is confident of processing the applications during the financial year.
“This time we have time and the global financial situation is also improving. So I think we are not over-ambitious in setting a similar target as last year. As far as the unprocessed applications of last year are concerned, we have to deal with them now anyway,” the official said.
Prime Minister Manmohan Singh announced PMEGP on August 15 last year. The programme was formed after merging the existing schemes of Prime Minister’s Rojgar Yojana and Rural Employment Generation Programme, with an aim to generate 37 lakh jobs by the end of 2011-12. But the guidelines were issued after a delay of one month on September 20, shortening the already short time to achieve the yearly target.
As per the guidelines, the government provides 15-35% of the project cost as subsidy, while the project developer has to contribute 5-10% from his own pocket. The balance has to be arranged from public sector banks and financial institutions in the form of term loans.
