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ACKNOWLEDGEMENT
I would like to convey my gratefulness to the Regional Director Mr. Deepak Singhal,
Reserve Bank of India-Delhi, for giving me the opportunity to work on this project. The
skills and knowledge which I have gained throughout my practical training I perceive as
very valuable component in my future career development.
I take this opportunity to express my profound gratitude and deep regards to my mentor,
Mr. Sunil Jolly for his exemplary guidance, monitoring and constant encouragement
throughout the course of this project. The blessing, help and guidance given by him from
time to time shall carry me a long way in the journey of life on which I am about to
embark. Also a special word of thanks to Ms. Vandana Maheshwari , for her valuable
comments, suggestions and direction.
My thanks and appreciation to the HR staff mainly Mr. Tarun Chandra for being willing to
help us throughout the course of my training.
I am thankful to all the respondents for their time, information and cooperation.
I would also like to thank the following people for their constant support and time.
Mr. Vijay Khanduja (LDM, Canara Bank)
Mr. Debashish Ganguli (Bank of Baroda)
Mr. Dushyant Dash (LDM, Canara Bank)
Mr. Mohanty (AGM, PNB)
Mr. Raj Kumar Kalra, (LDM Office, PNB)
Lastly, I thank the almighty, my family and friends for their constant encouragement
without which this assignment would not be possible.
Dhruv Jain
Delhi School of Economics
EXECUTIVE SUMMARY
The following report is based on a study conducted in Delhi to gauge the impact of the
government sponsored scheme PMEGP on its beneficiaries. It encourages self
employment ventures, especially among traditional artisans and unemployed youth,
relating to manufacturing and service sector by providing them credit linked subsidy.
A sample of 35 projects was drawn from the list of beneficiaries given loan in 2012-13 and
results were drawn based on this random sample. The impact of the scheme is evaluated
based on different aspects of development: economic, financial and social.
The key findings of the study are as follows1) Employment Generated
suggesting
that
the
scheme
promotes
2) Migration
Even the Migrants in the sample came long before the scheme was
introduced. Thus we cannot say that the scheme catalyses Migration.
3) Income Generation
5) Social Mobility
Social Mobility is slow in the short run because the respondents have
prioritized re-capitalizing of the business over immediate consumerism.
However, it will gain momentum in the long run.
TABLE OF CONTENTS
S No.
Topics
Page No.
1.
2.
3.
Methodology
10
4.
Descriptive Statistics
12
5.
14
6.
Impact on Income
16
7.
18
8.
19
9.
Case Studies
20
10.
24
11.
25
12.
Conclusion
29
13.
Appendix A- Questionnaire
30
14.
32
15.
33
16.
34
17.
Appendix E- Sample
38
18.
Bibliography
39
Rural
Employment
Generation
Programme
Prime
Minister's
Employment
Generation
Programme
Figure 1
State KVIC
Directorates
District
Industries
Centres
Figure 2
Beneficiarys
PMEGP
contribution
Urban
Rural
General Category
10%
15%
25%
05%
25%
35%
/Minorities/Women, Ex-servicemen,
Physically handicapped, NER, Hill and
Border areas etc.
Table 1
Note: (1) The maximum cost of the project/unit admissible under manufacturing sector is Rs.
25 lakh.
(2) The maximum cost of the project/unit admissible under business/service sector is Rs.
10 lakh.
(3) The balance amount of the total project cost will be provided by Banks as term loan
Identification of beneficiariesThe identification of beneficiaries will be done at the district level by a Task Force
consisting of representatives from KVIC/State KVIB and State DICs and Banks. The Task
force would be headed by the District Magistrate / Deputy Commissioner / Collector
concerned. The Bankers should be involved right from the beginning to ensure that
bunching of applications is avoided. However, the applicants, who have already
undergone training of at least 2 weeks under Entrepreneurship Development Programme
(EDP) / Skill Development Programme (SDP) / Entrepreneurship cum Skill Development
Programme (ESDP) or Vocational Training (VT) will be allowed to submit applications
directly to Banks. However, the Banks will refer the application to the Task Force for its
consideration. Exaggeration in the cost of the project with a view 6 only to availing higher
amount of subsidy should not be allowed. KVIC will devise a score card in consultation
with SBI and RBI, and forward it to the District Level Task Force and other State/District
functionaries. This score board will form the basis for the selection of beneficiaries. This
score card will also be displayed on the websites of KVIC and Ministry. The selection
process should be through a transparent, objective and fair process.
Bank Finance1. The Bank will sanction 90% of the project cost in case of General Category of
beneficiary/institution and 95% in case of special category of the
beneficiary/institution, and disburse full amount suitably for setting up of the
project.
2. Bank will finance Capital Expenditure in the form of Term Loan and Working
Capital in the form of cash credit. Project can also be financed by the Bank in the
form of Composite Loan consisting of Capital Expenditure and Working Capital.
The amount of Bank Credit will be ranging between 60-75% of the total project
cost after deducting 15-35% of margin money (subsidy) and owners contribution
of 10% from beneficiaries belonging to general category and 5% from beneficiaries
belonging to special categories. This scheme will thus require enhanced allocations
and sanction of loans from participating banks. This is expected to be achieved as
Reserve Bank of India (RBI) has already issued guidelines to the Public Sector
Banks to ensure 20 % year to year growth in credit to MSME Sector.
3. Though Banks will claim Margin Money (subsidy) on the basis of projections of
Capital Expenditure in the project report and sanction thereof, Margin Money
(subsidy) on the actual availment of Capital Expenditure only will be retained and
Employment Generation
Expansion of Income Generation Capability
Standard of Living
Financial Inclusion (inclusion in the banking structure- savings and investment
choices)
(v)
Effect on Migration
(vi) Social Mobility (education, housing and health)
(vii) Targeting
(viii) Rationing (gender, caste, income)
METHODOLOGY
In this section, I describe the methodology used to evaluate the impact of PMEGP which
aims to expand the capabilities2 via employment generation. The steps followed for this
evaluation as depicted in the following flowchart.
Figure 3
Sens capability approach is a moral framework. It proposes that social arrangements should be primarily
evaluated according to the extent of freedom people have to promote or achieve functionings they value.
3 (Circular, 2008) RBI/2008-09/211RPCD.PLNFS.BC. No. 41 /09.04.01/2008-2009
2
4
5
10
METHODOLOGY
STEP 2: Collection of Data using a uniform recall period
Preparation of the Questionnaire: After studying what the scheme is all about and
what are its objectives, we move onto the preparation of the set of questions we
would like to know to be able to evaluate the impact of the scheme on the
beneficiaries. This is again a decisive step as this is the stage where we define what
would be the data well get to analyze. A comprehensive questionnaire6 enables
one to make accurate judgments. We used a uniform recall period for both
economic and social parameters. This uniform recall period is one of pre scheme
regime and post scheme regime(1 year after the project was started)7. I have also
prepared a Self-Reporting form8 which records the ratings of the respondents on
various administrative issues related to the scheme.
Routine gathering of data and statistics: This step includes two sub-steps. There
are two types of data that needs to be collected.
o Contact Details of the Beneficiaries- This involved contacting the KVIC office/
Circle Offices of Punjab National Bank, Bank of Baroda, Canara Bank. After
obtaining the contact details, a random sampling was done to pick out
households scattered all over Delhi so that the sample is more representative.
The data received was for the year of 2012-2013.
o Conducting Surveys- This involved visiting the beneficiaries, either their homes
or workplace and getting their response on the questionnaire. Respondents for
whom we did not have the addresses, were contacted telephonically and their
responses were registered via telephonic interviews9.
(ii)
Subjective Analysis- In this section, different cases as observed during the field
visits have been summarized based on their individual experiences. It gives us a
micro view of the success/ failure of the scheme under consideration.
Econometric Analysis- In this section, quantitative analysis of the data is done.
All the cases are analyzed together to give a macro view of the impact of the
scheme i.e. what has been the impact of the scheme on an overall basis. For this
purpose STATA 12 is used. I have assumed that there are no time fixed effects.
11
DESCRIPTIVE STATISTICS
A random sample of 35 projects/ beneficiaries was taken from the list of those who were
disbursed loans under PMEGP in 2012-13 period. The sample was drawn such that it
consists of beneficiaries from across all the districts of Delhi (keeping in mind the rural
areas as well) and across banks so that it is a representative sample. I have also kept in
mind the ratio of male to female applicants and proportions of various categories in the
population data while selecting the sample. This section gives the descriptive statistics of
the sample taken.
1. The average income earned before the loan is taken is 0.93 Lacs per annum.
2. The average income earned after the loan is taken is 4.5 Lacs per annum.
An increase in the average income earned is a crude indicator of the income
augmenting effect of the scheme.
3. The average loan amount is 5.4 Lacs.
4. The average subsidy received is 1.2 Lacs.
5. The average education of the applicants in the sample is 11 years.
6. The proportion of females in the sample is 37% which is close to the population
figure of 32% for the year 2012-13.
7. The profile of respondents based on the category is as following:
Figure 4
8. Majority of the applicants (69%) took loan to start a new project. This suggests
that the scheme promotes entrepreneurship and provides self employment
opportunity. However we do find few respondents (31%) who took the loan to
expand their already existing project. This is against the guidelines of the scheme
as it is strictly stipulated that all sanctions will be given for New Projects.
9. Majority of the loans are taken for manufacturing purposes.
12
DESCRIPTIVE STATISTICS
10. The proportion of migrants in the sample is 14% suggesting that the most of the
beneficiaries are residents of Delhi and that the scheme cannot be attributed to as
a cause of migration because even the migrants in the sample were those who
came years ago even before the scheme was introduced.
Figure 5
11. The majority of the respondents have undertaken projects that are providing them
with a regular source of income. This coincides with the objective of the scheme in
promoting ventures that provide a sustainable and continuous source of income.
Only projects like beauty parlors, boutiques, cyber caf etc which are prone to
unforeseen demand fluctuations10 or projects that involve supply side seasonal
restrictions, show a boom bust revenue cycles.
Figure 6
12.
The average employment generated per project is 2.52 which is way below the
target of 8 person per project as set by the KVIC for the year 2012-13.
This can be due to increase in competition or lack of innovation in services. Also technological innovation
and easy access to internet facilities in the smart phones have made projects like cyber cafs non viable.
10
13
D1 : Category Dummy
D2 : Training Dummy
: Asset-Index
D3 : Purpose Dummy
Subs: Subsidy
14
Variable
Expected Sign
of Coefficient
(Reg1)
Expected Sign
of Coefficient
(Reg2)
Expected Sign
of Coefficient
(Reg3)
INCB
Positive
Subs
Positive
Positive
Positive
Edu
Positive
Positive
No Relation
D1
No Relation
No Relation
No Relation
D2
Positive
Positive
No Relation
D3
Negative*
Negative*
No Relation
Table 2
* Since the omitted category is Expansion
Ideally, we are likely to expect a positive relationship between the amount of subsidy and
income after the scheme otherwise the objective of the scheme fails. We may also expect a
positive impact of education level on the income after the scheme/change in income,
because higher education signals a better ability to plan the project, internalizing any
exogenous factors related to the business. We also expect an upward social mobility with
increase in the amount of subsidy via expansion of income generation frontier.
15
IMPACT ON INCOME
1. We use the first regression specification and present the following results.
Table 3
A scatter plot of income before the loan and income after the loan shows that there is a
positive relationship between the two. The above regression results show that a 1 unit
increase in the subsidy granted leads to a 4.14 unit increase in the annual income of the
beneficiary. This is a strong result suggesting that the scheme has a positive income
augmenting effect. The coefficients of income before and subsidy are positive and
statistically significant, in accordance with the theory. The impact of education on income
after the scheme is a perverse result but its coefficient is statistically insignificant. We see
that the category dummies with general as the omitted category have statistically
insignificant coefficients. We did expect training to influence income generation capacity
but the results are contrary. However the coefficient is statistically insignificant.
2. We use the second regression specification and present the following results.
We look at the impact of the subsidy on the change in income as a robustness test for our
evaluation. The scatter plot shows an upward trend between the change in income and
subsidy. This positive relationship indicates that the scheme is successful in augmenting
the income of the beneficiaries.
16
IMPACT ON INCOME
Figure 7
The following regression (specification 2) shows that 1 unit of subsidy will lead to a 6.3
units of change in income. The change in income measures how quickly the scheme will be
able to create an income augmenting effect. The change in income as a result of the scheme
is not dependent on the level of education suggesting that the effect of the scheme is not
biased in favor of the well educated. No causal relationship is observed between the two.
Even category dummies have statistically insignificant coefficients.
Table 4
17
No. of Applicants
30
25
20
15
10
5
0
Pre Scheme
Post scheme
Savings Acc
25
33
Financial Investment
Figure 8
We can see the number of savings accounts have gone up indicating greater access to
banking facilities to those who otherwise did not have an account previously. However
one must exercise caution at this point. Merely the opening of accounts, in no way implies
that people have started to save more. On the contrary, the respondents claimed that their
savings are low and in some cases zero because of increased expenses, inflation and need
for constant re-capitalization of the business. Financial investments like FDs, LICs, and
Mutual Funds are very uncommon among the surveyed beneficiaries. This observation is
not surprising, given our narrow data frame because many businesses have a long
gestation periods before there is any substantial saving. Moreover, education level and
financial literacy play an important role in shaping the savings behavior of the individual.
To conclude, it can be said that no major achievement towards financial inclusion has
been seen suggesting that concerted efforts need to be taken to achieve this goal.
18
Open stratification systems are those in which at least some value is given to the achieved status characteristics in a
society.
16
17
19
CASE STUDIES
In this section we present some case studies that brings the diverse experiences of the
beneficiaries. In a credit linked subsidy scheme like PMEGP, it was realized that success or
failure of the projects were subjective based on various factors which differed from case to
case. Thus with the help of the following success and failure stories a glimpse of the
impact of PMEGP on peoples life is described.
Dr. Deepali Bhardwaj, a
dermatologist applied for a
PMEGP loan from Bank of Baroda
in 2011 to buy a machine that
would be used to manufacture
her face packs on a large scale.
Her work her seen a dream run
after the loan. From a humble
income of 50K per month to
around 5 Lacs a month at
present, she exemplifies how far
one can go with a PMEGP loan.
She has seen tremendous change
in her life after this endeavor
succeeded. She talks of how this loan has helped her achieve more financial stability and a
greater appetite to risk in order to achieve her bigger dreams.
Mr. Sunil Kumar, a graduate who previously worked as a computer operator took a
PMEGP loan from Punjab National
Bank in 2012 to manufacture an
electronic chip used in a set top box.
His earnings from his earlier job was
around 8K per month. He now runs
his own business and has employed
6 people under him. His monthly
income is around 35K per month
and this is just the beginning for
him. He feels that with time it going
to get better as he establishes him in
the market. He has not planned any
expensive purchases as yet as he is
keen on recapitalizing his business.
20
CASE STUDIES
Mrs. Kavita C Raksha took a PMEGP
loan from Punjab National Bank Kalkaji,
to buy an oven for her bakery which she
runs along with her husband. She took a
loan of 5 Lacs and now her monthly
income has gone up by 125%. This is a
tremendous change. The couple has
been living a righteous life and believes
that hard work and is their biggest
wealth. Even at a ripe age of 72, they
have been able to make a difference in
their lives just by their spirit. They serve
as a role model for the younger
generation.
21
CASE STUDIES
Mrs. Babita Bhatt, is a resident of Janakpuri.
She started making her cushions and
bedcovers from her home. In 2012, she took
a PMEGP loan to scale it up. Earlier she could
earn around 15K per month from her work.
After taking up the loan she bought more
machines, hired more labor and even rented
a place to start her project. Now she earns
around 35K per month, which is an
improvement of more than double. She
pointed out the need for contingency funds
as there are phases in the business when
need for immediate funds become vital. She
also complaints that the amount she got from
the bank was half of what she expected.
22
CASE STUDIES
Ms. Radhika, who had been running a beauty parlor in Pitampura for more than 5 years,
took the loan from Canara Bank in 2012 to
scale it up with better products and services
as a conscious effort to attract more
customers. Even though she invested the loan
money in her parlor with the hope that a relaunch might give her the required
momentum but as time passed by she found
it increasingly difficult to break even because
of increasing competition from other parlors
in her locality. She cites her lack of planning
and market competition as the major reason
for her failure. This example highlights how
some businesses are prone to a boom-bust
pattern of growth. Contrary to her case is
that of Mrs. Shaheen Parveen, who took the
loan in 2012 for the same reason. She was
previously earning 10K per month. After
successfully re-launching her parlor she saw an increase in her income of about 50%. She
even employs 3 full time workers in her parlor. Here we juxtapose a success story with a
failure just to drive the point that the most important thing that crucially determines the
success of the scheme is individuals plan for his/her project.
Mr. Siraj applied for loan under
PMEGP to open up a cyber cafe.
Since it is not a part of the
negative list it has been
sanctioned by the bank. However,
the bank manager feels that a
cyber cafe wouldnt fetch enough
or to say wont be a successful
venture given the new era of
smart phones which have reduced
the need for a cyber cafe
tremendously. Since the loan has
been sanctioned, the person will now be opening up a cyber cafe which most likely
wouldnt be profitable and thus the loan taken would be futile adding more to the debt
than to his income. Siraj took the PMEGP loan in 2012. Initially he saw regular customers
but with time the numbers have declined. He now faces a slack in his business due to
investment in a venture that now faces a demand crunch.
23
Figure 9
18
19
The respondents believe that the scheme is well designed and has a strong vision.
They believe that the scheme is reliable and that they can suggest their peers about
the same.
That the scheme is successful in having a positive income augmenting effect is
validated by a high self reporting score of 8.06.
However the area in which the scheme slacks is its effective implementation by the
banks. On an average the respondents suggest that the experience with the banks
can be made more user-friendly.
Processing time is the biggest issue that the respondents have talked about. They
feel that this is the biggest challenge to the effectiveness of the scheme.
Aspects of application process and loan delivery also need improvement.
24
25
26
It refers to a market process in which undesired results occur when buyers and sellers have asymmetric
information(access to different information)
20
Signaling is the idea that one party (termed the agent) credibly conveys some information about itself to another
party (the principal)
21
27
Willingness to Pay
Since it is not possible to measure motivation of a borrower; in the wake of an
unsecured loan, the banks face a high possibility of defaults. In the case of Mr. Amit
Yadav, the bank is not able to recover the loan as yet and the person bought a fridge
from the loan money. If we want to tackle such issues we need to ensure that
repayment system is designed in a way that there is no incentive for the borrower
to default. This can be done by giving some bonuses to those who clear their dues
in time. Those who are borrowing for expanding their existing businesses are more
likely to be motivated to utilize the funds well while first time borrowers who want
to start a new project are less likely to be using the funds well.
A moral hazard is a situation in which a party is more likely to take risks because the costs that could result will not
be borne by the party taking the risk.
22
28
CONCLUSION
In conclusion I would like to say that the Prime Ministers Employment Generation
Programme is indeed a big step towards creating self employment ventures for the
unemployed with focus on the youth and traditional artisans. One of the objectives of the
scheme is to help create sustainable and continuous income flow for the beneficiary. After
studying the scheme closely, I come to the conclusion that achievement of this objective is
contingent upon the projects that individuals undertake. Any credit link subsidy is like an
opportunity that provides the initial big push but the onus lies on the individual to make
the best use of this opportunity. Thus we can say that the scheme is conceptually designed
in a way to provide the income augmenting effect. The study also finds that the scheme
promotes entrepreneurship and development. The scheme provides the loan to both rural
and urban population in order to arrest migration from the rural to the urban sector.
There is no cause- effect relationship between the scheme and migration. If anything,, the
scheme would inhibit it. The key objective of this scheme is employment generation. I find
that this objective has been under-achieved. The KVICs target for the year 2012-13 was 8
people per project and a total employment target of over 2500. The sample data finds an
average employment per project of only 2.56, which is way below the target. Simple
extrapolation would suggest that the estimates from the population data will be close to
the sample estimates. Thus, either there is a over-ambitious target set by the KVIC or the
loans are being given to the projects without keeping in mind their employment
generation spillover. This issue needs to be solved so that the outcomes are in tandem
with the objective. Another objective was to support artisanship. The sample data was
unable to include them because of the mere absence of such projects in the population
data. The scheme is without any bias towards the weaker sections of the social strata. The
only criterion followed in the sanctioning of the loan is the projects economic and
technical viability. Thus there is equal opportunity for both men and women irrespective
of their category. Although social mobility observed from the sample is slow in the short
run, it can be attributed to the narrow data frame of the study. However, I am hopeful of an
upward social mobility in the long run. Thus the scheme is successful in having a positive
impact by providing the big push to all the motivated beneficiaries.
29
APPENDIX A
The following Questionnaire was used for the survey:
FOR THE BENEFICIARY PMEGP
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)
23)
24)
25)
26)
27)
28)
29)
30)
31)
Name:___________________________________________________________________________________
Age:_____________________________________________________________________________________
Special Category (SC/ST/OBC/PH):_____________________________________________________________
Address:_________________________________________________________________________________
________________________________________________________________________________________
Contact no.:______________________________________________________________________________
Gender:
MALE
FEMALE
Migrant: YES
NO
If yes, from where________________________________________
Reason for Migration_______________________________________________________________________
Educational Qualification____________________________________________________________________
Technical Qualification:_____________________________________________________________________
From where did you come to know about PMEGPA)Newspaper Ad
B)Campaign
C)Bank
D)Peers
E)Broker
F)Other________________
How did you get the loan?
DIRECT
INDIRECT (Any payments involved)
Any Training obtained under PMEGP: YES
NO
Occupation before PMEGP enrolment__________________________________________________________
Income before enrolment under PMEGP (Rs. per month):__________________________________________
Purpose of Loan- New Project (Previously unemployed)
Change of Occupation
Expansion of already existing project
Bank from which loan is obtained?____________________________________________________________
When did you apply for the Loan?_____________________________________________________________
When was the PMEGP loan sanctioned?:_______________________________________________________
Amount of loan money received from the bank:__________________________________________________
Amount of Subsidy:________________________________________________________________________
What was the percentage subsidy you were entitled to under the scheme?____________________________
Any collateral offered?______________________________________________________________________
Name of the project________________________________________________________________________
Nature of Business unit:
Manufacturing unit
Service Unit
Business Unit
Type of Project:
Individual Project
Group Project
Nature of Income Flow:
Seasonal
Regular
Income from project (Rs. per month):__________________________________________________________
Other Sources of Income(if any):______________________________________________________________
Other source of financing for the project
YES
NO
Source of Finance
Tick
Percentage
Bank
Relatives
Non-banks/money lenders
Other
32)
33)
34)
35)
30
APPENDIX A
SOCIAL INDICATORS
35) Marital Status: Married
Unmarried
Divorced
36) No. of
children(Boys):______________________________(Girls):____________________________
37) Sex of Household Head
Male
Female
S. no.
Social Indicators
Before PMEGP
After PMEGP
1.
B:
G:
B:
G:
2.
B:
G:
B:
G:
3.
B:
G:
B:
G:
4.
Health Services
Public/Govt
Hospital
Private Hospital
Local Dispensary
Others
Water
No water
supply within
500 yards
Community hand
pump/tube/well/bore
well/tank
Community
Tap
Private hand
pump/ tube
well bore/well
Sanitation
Open
Defecation
Community
Private
Status of
Children in a
Household
Working
Children &
not
Attending any
School/
Children not
working as well
as not attending
any Classes
Children not
working and
attending
School
Regularly
Type of Stove
Wooden
kerosene
LPG
Coal
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Assets Present
Television
Refrigerator
Mobile
Air-cooler
Air-conditioner
Cycle
Scooter/Motorcycle
Car
Laptop/computer
Land in village(acre)
Shop/factory
Baseline
Private
piped
Water
Endline
31
APPENDIX B
The following Self Reporting form was used for the survey:
SELF REPORTING
Name(Optional)___________________________
Scheme____________________________
9)
1
1
1
1
1
2
2
2
2
2
3
3
3
3
3
4
4
4
4
4
5
5
5
5
5
6
6
6
6
6
7
7
7
7
7
8
8
8
8
8
9
9
9
9
9
10
10
10
10
10
YES
1
2
NO
4
5
10
10
10
) ___________________________
____________________________
1-10
1)
10
2)
10
3)
10
4)
10
10
7)
10
8)
10
9)
10
5)
6)
)?
32
APPENDIX C
Construction of the Asset Index
An Asset Index was created to look at the change in standard of living of the PMEGP
beneficiaries.
We classified the consumer durables purchased by the beneficiaries and investments in
fixed capital (like purchase of shop) into 3 categories. These categories are
I.
II.
III.
Each of these assets are scored on the basis of change in their holding. To be more clear, if
a person did not own a TV before the loan but bought a TV with his increased income in
the post scheme regime, we give him a positive score.
The scoring of various assets are as follows:
i.
ii.
iii.
iv.
v.
After scoring all the assets we construct the Individual asset index by summing the score
of all the assets in that particular asset class (Fast/Medium/Slow)
Once we have constructed the Individual Asset Indexes for the 3 asset classes, we obtain
the final Asset Index as follows:
= Ii /3,
For Example:
If the Fast Moving Index is 2, the Medium Moving Index is 2 and the Slow Moving Index is
8, then the asset index is (2+2+8)/3=4.
33
APPENDIX D
Status of PMEGP (2012-14) in Delhi
A. No. of Applications (District wise)
We notice major improvements over the year in the no. of applications from North
West, North and East Delhi. Central and New Delhi have not shown much increase
in volume of applications. South Delhi continues to be the leader in the no. of
applications.
(2012-13)
(2013-14)
2012-13
2013-14
1000
800
600
400
200
0
Applications
Sanctioned
Disbursed
Figure 10
34
APPENDIX D
C. Data on No. of Rejected Loans/ No. of Incomplete applications/ No. of loans
returned/ No. of applications with unknown status
While the no. of applications has increased in 2013-14, the rejection rate is higher
for 2013-14 than for 2012-13. Also the no. of returned loans has doubled and can
be attributed to less than expected loan amount sanctioned by the banks.
500
450
400
350
300
250
200
150
100
50
0
2012-13
2013-14
No. of
rejected
loans
No. of
incomplete
applications
No. of loans
No. of
returned application
(unknown
status)
Figure 11
2013-14
400
2012-13
200
0
No. of Male
Applicants
No. of
sanctions
(male)
No. of
Female
applicants
No. of
sanctions
(female)
Figure 12
35
APPENDIX D
E. Profile of Applicants based on Category
The majority of applicants belong to General category. SC and OBC applicants are
far behind. ST and PH applications are negligible. Over the year we have seen an
increase in the no. of applications from the General category, while a decline in the
no. of applications of the SC category. This is contrary to the expectations because
the subsidy provided by the scheme is greater for the SC and ST categories.
Percentage
Sanctioned Loans
120
100
80
60
40
20
0
No. of
sanctions
(gen)
No. of
sanctions
(SC)
No. of
sanctions
(ST)
No. of
sanctions
(OBC)
No. of
sanctions
(PH)
2012-13
58
14
11
2013-14
104
18
31
36
APPENDIX D
G. Performance of PMEGP (official data)
Sr.
NO
State/Div/UT
No.of
MM
Proj. (Rs.lakhs)
No. of
applicat
No.of
ions
Emp. Appli. placed
Received
(Nos)
before
DLTFC
No.of Appli.
Sanctioned by
banks
Disbursement made by
nodal branches
No.of
No.of
No.of
Appli.
Appli.
Appli.
Recomm
Consid
Forward
ended
ered
ed to
No.of
MM
No.of
MM
Empl.
by
by
banks
DLTFC
banks Proj (Rs.lakh) Proj. (Rs.lakh) (Nos)
Achievement % to target
Proj.
MM
Averag
e MM
EDP
per
given project
(Rs.lakh
Employ.
)
Estimate
d
average
project
cost
(Rs.lakh)
Applications
rejected by
Banks
22
10
11
12
13
14
15
16
17
18
19
20
21
160
368.98
1280
13
13
11
8.40
2.83
16
2.50
0.77
1.25
0.71
2.02
NORTH ZONE
2 Delhi
B.E. TARGET-2012-13
Sr.
NO
State/Div/UT
No.of M. M (Rs.
Proj. in lakhs)
Emp.
(Nos)
No. of
applicat
No.of
ions
Appli.
placed
Received
before
DLTFC
No.of
Appli.
Recom
mended
by
DLTFC
No.of No.of
Appli. Appli.
Forwar Conside
ded to red by No.of
banks banks Proj
Estimat
ed
Average
Appliaverag
MM per
cations
EDP
e
project
rejegiven
project
(Rs.lakh
cted by
cost
Employ.
)
Banks
(Rs.lak
h)
Achievement % to target
MM
(Rs.lakh)
No.of
Proj.
MM
(Rs.lakh)
Empl.
(Nos)
Proj.
MM
10
11
12
13
14
15
16
17
18
19
20
21
161
368.98
1288
832
832
256
159
159
40
26.66
40
26.66
128
24.84
7.23
9.94
28
0.67
1.91
22
NORTH ZONE
2
Delhi
B.E. TARGET-2012-13
Sr.
NO
State/Div/UT
No. of
applicat
No.of
ions
No.of M.M (Rs.in Emp. Appli. placed
Received
Proj.
lakhs) (Nos)
before
DLTFC
1
2
NORTH ZONE
2 Delhi
321
737.96 2568
845
Disbursement made by
No.of Sanctioned by
Nodal branches
Appli.
banks
Consid
ered
No.of
MM
No.of
MM
Empl.
by
Proj (Rs.lakh) Proj. (Rs.lakh) (Nos)
banks
No.of
Appli.
Recom
mende
d by
DLTFC
No.of
Appli.
Forward
ed to
banks
10
11
12
13
14
163
163
51
35.06
44
29.49
845 260
15
Achievement % to
target
Proj.
MM
Emplo
y.
16
17
18
EDP
given
19
AppliEstimated
Average
cations
average
MM per
rejected
project
project
by
cost
(Rs.lakh)
Banks (
(Rs.lakh)
in nos)
20
21
22
0.67
1.92
37
APPENDIX E
The following people were part of the sample for the study selected randomly from the
population data (KVIC, 2012-13, 2013-14). Here are some of their details.
Name
Jitendra Singh
Nawab Ansari
Manoj Kumar
Bhim Rao
Parvesh
Radhika
Vinod Kumar
Ajay Kumar
Dheeraj Ladwal
Manoj Kumar
Amit Yadav
Siraj ul Haq
Srishti Mehta
Rakesh Jain
Prashant Goel
Dhanesh Raj
Arun Dutt
Sunita
Geeta Sharma
Kavita C Raksha
Rizwana Begam
Gaurav Ahuja
Pinki
Vikram Sharma
Sushma
Lokesh Kumar
Sudesh Rani
Gaurav Bomibatra
Shaheen Parveen
Sunil Kumar
Sultan
Kamal Kumar
Babita Bhatt
Deepali Bhardwaj
Mahipal Singh
Category
Gen
OBC
Gen
ST
Gen
Gen
Gen
SC
SC
Gen
OBC
OBC
Gen
Gen
Gen
Gen
Gen
SC
Gen
Gen
SC
Gen
SC
Gen
ST
OBC
SC
Gen
Gen
Gen
Gen
SC
Gen
Gen
SC
Project
Flour Mill
Invertor Manufacturing
Garment Shop
Namkeen Shop
Cardboard Roll
Radhika Beauty Parlor
NS Enterprises, Printings
Plastic Manufacturing
Website designing and Photography
Embroidery work
Bought a fridge
Cyber Caf
Tea manufacturing and assemblying
Art and Craft/Soft Toys etc.
Silver Dora making
Hardware, Computer Services
Flour Mill
Stitching Work
Hosiery, Leggings
Bakery
Shirt and Jeans Making
Service Unit
Stiching Suits
Computer Hardware and Software
Stiching Suits
Wooden moulding
Beauty Parlor
Printing Press
Beauty Parlor
Wire Making/ Electronics
Photocopy Shop
Watch Making
Stitching Work
Skin and Hair Clinic
Shoes Manufacturing ans Sales
38
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Mechanism. QJE .
Circular, M. (2008). Prime Minister's Employment Generation Programme (PMEGP).
Reserve Bank of India.
Gujarati, D. (5th edition). Basic Econometrics. The McGraw Hill.
KVIC. (2012-13, 2013-14). Case Forwadings.
Rangarajan, C. (2006). The committee on Financial Inclusion.
Sen, A. (1999). Development as Freedom.
Stiglitz, J. (1984). Equilibrium unemployment as a worker discipline device. AER .
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Economic Geography .
39