I. INTRODUCTION: OBJECTIVES OF THE SCHEME
Prime Minister’s Employment Generation Plan, it is a new credit linked subsidy programme. It is
a merger of two schemes that are Prime Ministers Rojgar Yojana (PMRY) and Rural
Employment Generation Programme (REGP) that were in operation till 31st March, 2008. These
schemes were implemented for generation of employment opportunities through establishment
of micro enterprises in rural as well as urban areas. At the national level, the scheme is
implemented by “Khadi and Village Industries Commission (KVIC) which functions as the nodal
agency whereas, at the state level it is implemented through State Khadi and Village Industries
Board (KVIBs), District Industries Centers (DICs), State KVIC Directorates and banks”. The
Government subsidy under the scheme is being routed by “KVIC through the identified banks
for eventual distribution to the beneficiaries/ entrepreneurs in their bank accounts”. It is a central
sector scheme to be administered by the “Ministry of Micro, Small and Medium Enterprises
(MSMEs)”. The scheme was developed with the objectives of:
• “To generate employment opportunities in rural as well as urban areas of the country by
way of setting up of new self-employment projects, ventures, etc”.
• “To bring together traditional artisans/ rural and urban unemployed youth who are widely
dispersed and provide them with various self-employment opportunities at their place”.
• “To provide continuous and sustainable development to a large segment of traditional
and artisans and rural and urban employed youth in the country, so as to stop the migration of
rural youth to urban areas”.
• “To increase the wage-earning capacity of artisans and contribute to increase in the
growth rate of rural as well as urban employment”.
II. WHY IS IT INTRODUCED?
Prime Minister’s Employment Generation was introduced to increase the employment
opportunities in both the rural as well as urban areas so as to reduce the unemployment in the
country. The scheme will create sustainable estimated employment opportunities for fifteen (15)
lakh persons in three financial years. The scheme’s targets are fixed based taking into account
the following factors:
• “Extent of Backwardness of state”;
• “Extent of Unemployment”;
• “Extent of fulfillment of previous year targets”;
• “Population of state/union territory”; and
• “Availability of traditional skills and raw materials”.
This scheme was also introduced in order to generate self-employment opportunities by the
establishment of micro-enterprises in the non-farming sectors by helping the traditional artisans
and the youth present in rural as well as urban areas that are unemployed. It provides for a
maximum loan of Rs. 25 lakh for the manufacturing sector and of Rs. 10 lakh for service
projects. It also invariably increases their incredibility in business and helps them in getting
timely credit from banks at liberal rate of interest. This scheme was also formulated for the
improvement of the standard of living of the poor by providing them funds to start self-employment, so that they could generate income for their sustenance and living, it was
aimed at the weaker sections of the society. The Government also launched this scheme as the
market economy has been incapable of generating enough jobs for the workers entering the
labour force. According to an article published in “THE TELEGRAPH” one of the reasons to
introduce this scheme is also that “the government may reduce or cut back the resources
allocated for this, an example of this can be Union Finance Minister’s decision to cut
expenditures budgeted for the MGNREGA for 2020-2021 in spite of a sharp decline in
person-days created in the current year”.
III. CRITICAL ANALYSIS
According to an article published it is stated that the growth performance of employment
generation deserved approval and admiration in the first two years since the programme was
started but afterwards the declining trend can be seen in the growth performance. There are
about 1.18 lakh pending loan applications under this scheme. Considering the need for
transparency and accountability- a system of e-tracking of PMEGP applications has been made
mandatory from 2014-15 onward. Under the proposed e-tracking system of the PMEGP
applications, each applicant would be provided a unique online ID through which they could
track the status of their PMEGP applications at various stages and find out the actual reasons
why projects submitted were rejected. The profit earned by the entrepreneurs has significantly
increased from participation in PMEGP. Money margin utilized during the programme is in the
rising position in accordance to the money margin allocation. Also, according to data average
annual profit earned shows that there is substantial growth in the profit. But, also as per the
recent official estimates the number of jobs created under the Prime Minister’s Employment
Generation Plan dropped straight down 5.87 lakh in 2018-2019 to 2.57 lakh in 2019-2020, the
figures are the lowest since the current government assumed office in 2014.
IV. CONCLUSION
Prime Minister’s Employment Generation Programme was implemented with an objective to
generate employment opportunities for the unemployed youth in the rural and urban areas. It
aims to create self-employment opportunities for the people so as to provide them with means
of earning their livelihood; it has also led to a decrease in the unemployment rate of the country.
It also leads to the migration of the youth in rural areas to urban areas. It has even helped the
traditional artisans and led to an increase in their wage earning capacity, but like a coin this
scheme also has two sides to it. This scheme is also facing many problems like inadequate
response from the bank, sanction of proposals from the bank, reduction of project cost,
disbursement of the loans by the banks and pendency of the applications at branch and nodal
banks.
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