PMEGP: New jobs by KVIC hit record high in FY21 amid Covid; Rs 2,188 cr margin money disbursed

Skill, Labour, Talent for MSMEs: Khadi and Village Industries Commission (KVIC) has created the highest number of jobs under the Prime Minister’s Employment Generation Programme (PMEGP) ever since the latter’s launch in 2008, according to the government data. KVIC, the nodal agency for implementing PMEGP, disbursed Rs 2188.78 crore margin money in FY21 to create a whopping 5,95,320 PMEGP jobs through 74,415 micro-enterprises set up across the country amid the Covid pandemic. The number of jobs had increased from 5,80,896 in FY20 during which Rs 2,149 crore margin money was disbursed to create 72,612 new enterprises. However, this had declined from 5,87,416 jobs created in FY19 even as the margin money disbursed had increased from Rs 2,070 crore. The number of new enterprises or projects set up in FY19 was 73,427.

The creation of local jobs would provide a livelihood to lakhs of people, in turn, bolstering the country’s economy, MSME Ministry said in a statement citing MSME Minister Nitin Gadkari on Friday. The FY21 disbursement by KVIC was 103.2 per cent of the targeted Rs 2,120.81 crore disbursement while in setting up of new projects and employment generation, KVIC achieved 106.2 per cent of the target, the statement added. The ministry said that the two major decisions by KVIC regarding timely execution of applications helped overachieve the target. First, the timeframe for scrutinizing and forwarding the applications to the banks by its state directors reduced from 90 to 26 days. Second, monthly coordination meetings with the banks were started at different levels which has also helped timely disbursal of loans to the beneficiaries.

Even as the employment generation under PMEGP hit a record high in FY21, 88 per cent of micro beneficiaries under the programme were ‘negatively affected’ due to the Covid pandemic, according to a recent KVIC study. Among the affected 88 per cent, 57 per cent stated that their units were shut down temporarily during the Covid period, while 30 per cent reported a drop in production and revenue. Under PMEGP, around 2.37 lakh micro-enterprises were supported with a margin money subsidy of Rs 6,833.32 crore from FY18 till February 28, 2021.

The data shared by Gadkari around Covid’s impact on MSMEs in a written reply to a question in the Rajya Sabha last month also noted that the remaining 12 per cent of PMEGP beneficiaries benefitted during the Covid-19 pandemic. Among these beneficiaries, 65 per cent 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.