Skill, Labour, and Talent for MSMEs: Despite Covid, Prime Minister Employment Generation Programme (PMEGP), which offers credit-linked subsidies to micro-enterprises launched in the manufacturing and services sectors, has overachieved its target of the loan disbursement and subsequent employment generation for the financial year 2020-21. According to the government data, banks had sanctioned and disbursed loans to 84,793 micro units, thereby enabling employment for around 6,78,344 people against the target of assisting 78,625 entrepreneurs to set up micro units and as a result, generate estimated employment for 6,29,000 people.
“This is the best performance under PMEGP since its inception in 2008-09. Thus, the target fixed under PMEGP for the year 2020-21 has been surpassed despite COVID 19 challenges,” said MSME Minister Narayan Rane sharing the data in reply to a question in the Rajya Sabha on Monday. In the current financial year, 1,42,864 jobs have already been created through 15,564 micro units, according to the available data as of July 22. The total jobs created since FY09 under PMEGP stood at 57.37 lakh.
Meanwhile, a whopping 88 per cent of micro beneficiaries under PMEGP were ‘negatively affected’ due to the Covid pandemic, according to a recent study conducted by the programme’s implementing agency Khadi and Village Industries Commission (KVIC), Financial Express Online had reported in March. Importantly, 57 per cent of beneficiaries had said their units were shut down temporarily during the Covid period, while 30 per cent reported a drop in production and revenue. Under PMEGP, margin money subsidy amounting to Rs 2,188.80 was disbursed through KVIC to Banks for 74,415 units, the minister said. The scheme aimed at generating self-employment through the establishment of micro-enterprises in the non-farm sector.
Among the remaining 12 per cent beneficiaries who benefitted under PMEGP during the pandemic, 65 per cent had stated that their business increased as they had units in the retail and health sector while around 25 per cent stated that their units benefitted as they were dealing with essential commodities or services. However, the government doesn’t have data around the number of MSMEs that were shut down in the past year due to Covid. “As MSMEs are there in both formal and informal sector, data regarding temporary or permanent closure of the units are not maintained by the Government of India in Ministry of Micro, Small and Medium Enterprises,” Former MSME Minister Nitin Gadkari had said in a written reply to a question in the Rajya Sabha in early February this year.
PMEGP provides financial support up to Rs 25 lakh for micro enterprises to be launched in the manufacturing sector and up to Rs 10 lakh for businesses in the service sector, as per the scheme’s details on the MSME Ministry portal. The scheme also supports self-help groups, institutions registered with Societies Registration Act,1860, production co-operative societies, and charitable trusts.