Giriraj Singh presented with PMEGP evaluation: Scheme providing ‘sustainable employment’ over years

Micro, Small and Medium Enterprises (MSMEs) Minister Giriraj Singh has reviewed the recently evaluated Prime Minister’s Employment Generation Programme (PMEGP) through a study conducted by Management Development Institute (MDI), Gurugram. The MoS (IC) has come to the finding that the scheme has provided “sustainable employment” by targeting “almost all sections of society”.

According to the evaluation study, average employment per project was 7.62 and the average cost of generating unit employment was Rs 96,209. It further details that the maximum cost of generating unit employment was Rs 2,75,621 which was observed in Nagaland, while on the other hand the minimum cost was observed in Tamil Nadu at Rs 64,735.

Based on the findings pertaining to the problem areas observed under the scheme, the Institute has enlisted key recommendations for the Ministry and the nodal agencies responsible for the implementation of PMEGP.

Here are the key observations, problem areas and recommendations presented by MDI to the MSME Minister:

Observations

• Scheme has been able to provide Sustainable Employment – Units set up under the scheme provided employment throughout year and for large number of years
• Scheme has good reach – It has targeted at almost all sections of the society (based on social background, education background, location etc)
• Average Employment per Project – 7.62
• Average Cost of Generating Unit Employment – Rs 96,209
• Maximum Cost of Generating Unit Employment – Rs 2,75,621 (Nagaland)
• Minimum Cost of Generating Unit Employment – Rs 64,735 (Tamil Nadu)
• Average Cost per Project – Rs 7,33,423

Problem Areas

• Delay in the process of sanctioning of loans at different stages
• Hypothecation & collaterals asked for
• Physical verifications & delay in adjustment of margin money
• Records keeping, hand holding, access of data & reporting by implementing agencies
• Marketing for products

Recommendations

• Increased availability of field officers (They are a key connect between beneficiary and agencies and are currently sparse)
• EDP Training content needs to be more relevant and rigorous; Online EDP could be encouraged
• Content partnership/integration with MOOCs (Massive Open Online Coursewares) of recognized reputational technical and managerial institutes (such as IITs and IIMs)
• Agencies could consider hiring interns from leading management institutions (India/Abroad) to further handholding of beneficiaries
• Integration with Aadhar to authenticate the trainee identity and progress
• For motivating beneficiaries to repay loans, the people whose Margin Money has been successfully adjusted, need to be rewarded with an option of 2nd round of subsidised loans (at say 15 per cent of subsidy)
• Enforcement of deadlines (either of 60 or 90 days) on banks to decide about decision (acceptance or rejection) of the loan application
• Cash Credit Account (CCA) component of the loan could be reduced; Maximum CCA may range up to 40 per cent of total loan

MDI was entrusted with the task of conducting Evaluation Study of PMEGP in January, 2017. The aim of the study was to examine the impact of the scheme in terms of employment generation and improvement in income of the rural and urban artisans and unemployed youth, major problems in implementation of scheme and ways to resolve them and to make recommendations on making further improvements.

The sample size was selected on stratified random sampling basis.  The total number of micro units setup from 2012-013 to 2015-16 was 2,00,885 units. These units were taken into consideration and out of these a sample coverage of 5 per cent (about 10,108 units) was sought listed on random basis from among the three implementing agencies – KVIC, KVIB and DIC in proportion of 30:30:40.