Elections 2019: The Truth Behind Modi Govt’s Pet Schemes – II

[In part 2 of a series on Modi government’s schemes, Newsclick fact-checks some of the employment-related schemes: PM MUDRA Yojana, Skill India, and PM Employment Generation Programme. Part 1 (here) covered Ujjwala, Jan Dhan, Fasal Bima and Swachh Bharat schemes.]

Among the flagship schemes, job-related schemes created huge expectations because of the dire unemployment situation in the country. Prime Minister Narendra Modi had also promised one crore jobs. The Modi government’s approach to solving the jobs crisis was: give loans for self-employment and give skill training for better employability. Both strategies have dramatically failed as the following sections show.  

MUDRA Loans

The Pradhan Mantri MUDRA Yojana (PMMY) was launched by Modi, claiming that providing quick loans to a large number of people would create self-employment and generally boost the economy. Banks and other financial lenders were told to give loans up to Rs 10 lakh to applicants without the usual pre-conditions and checks. Between 2015 and March 2019, 16.6 crore loans worth Rs.7.8 lakh crore have been given, as per the official website.

This means that average loan per person is a meagre Rs.46,964! Except for very tiny enterprises, can any business run on such a small loan amount? Recently, a report on job creation under MUDRA scheme has been suppressed by the government.

There are also serious charges of corruption. This was revealed last year when a bank official was booked by Central Bureau of Investigation for “fraudulently” giving away 26 MUDRA loans worth Rs.62 lakh “without conducting meaningful pre-inspection or physical verification of spot of business or residence and without ascertaining end use of the loan amount or creation of assets from the loan amount”.

Under political pressure, banks seem to be just doling out loans to meet targets and please their superiors. The RBI has reportedly flagged the rising bad loans under the scheme. Far from creating self-employment, the scheme has blown a hole in the banking system that is already under stress from all the frauds committed by the likes of fugitive business tycoons like the Nirav Modis and Vijay Mallyas. Some reports suggest that local BJP leaders and supporters are mobilising people to take loans as a form of patronage.

Skill India

The flagship scheme, Pradhan Mantri Kaushal Vikas Yojana (PMKYV) – part of the Skill India programme – was aimed at providing “industry-relevant skills” to youth. It is a very good example of the lies and false claims made by the Modi government.

Adapted from the earlier running skill training programme, Skill India made such a mess in the first two years (2014-16) that the Sharada Prasad Committee set up in 2016 to examine its functioning revealed that, “Everybody was chasing numbers without providing employment to the youth or meeting sectoral industry needs”. The committee's damning conclusion was “an amount of Rs. 2,500 crore of public funds was spent to benefit the private sector without serving the twin purposes of meeting the exact skill needs of the industry and providing employment to youth at decent wages”. As a result of this shocking failure, and resulting uproar, the then Minister concerned, Rajiv Pratap Rudy, was sacked and the programme was supposedly refurbished. However, even under the new programme, which got Rs 1,200 crore for skilling one crore youth in 2016-2017, things have not improved.

As per the PMKVY website, till April 3, 2019, some 29.86 lakh youth had been enrolled in the Short Term Training (STT) courses of which only 34.5% had got jobs afterwards. No data is available on whether these were new job seekers, or whether the jobs were related to the skills acquired.

In the other component of Recognition of Prior Learning (RPL), about 18 lakh persons already working in jobs were given training. However, only about 10 lakh could get the completion certificate. This included employees of the petrol pumps, household maids and all manner of employees, many forced to attend classes for a few days just to boost numbers.

A third component called Special Projects to be run by government agencies enrolled over 90,000 persons but less than half (42,000) passed the training, and a mere 18,862 or about 20% were placed.

The target of one crore by next year is a distant dream, and it is amply clear that when no industrial or service sector jobs are available, nor is self-employment viable, just training people is nothing short of fooling them.

PMEGP

Pradhan Mantri Employment Generation Programme (PMEGP) is a variation of MUDRA loans, except that the government gives margin money while a bank gives the main loan. In three years, since its launch in 2016, the scheme received 12.3 lakh applications out of which only 1.33 lakh proposals were accepted. Total amount of margin money disbursed amounted to Rs 3,649 crore between 2016-17 and 2018-19, as per the PMEGP dashboard.

That means, about Rs.2.7 lakh was given as loan to each project on an average, and each applicant would have raised about Rs 8-10 lakh from the bank as the principal loan.

Estimates of jobs created in this programme are offered by the government itself. The PMEGP website says that for the two years 2017-18 and 2018-19, 1.13 lakh projects were sanctioned which created 7.9 lakh jobs. That works out to about seven jobs per project. But here is the catch: there is no basis for assuming that this is the actual number of jobs created. These numbers are estimated from the bank applications for loans! And, as with all other schemes, it is unclear whether these are jobs where new job seekers are working or it is just that people working elsewhere shifted to these jobs.

There are some other schemes related to employment like the Deen Dayal Upadhyaya – Grameen Kaushalya Yojana, the Deendayal Antyodaya Yojana – National Urban Livelihoods Mission, and the PM Rozgar Protsahan Yojana (PMRPY). The first two are skill training programmes, which made no dent in the joblessness crisis. The third - PMRPY - is simply giving cash to industrialists so that they can meet expenses of provident fund contributions of their employees.

Of all the hare-brained schemes started or repackaged by the outgoing Modi government, this clutch of employment-related schemes is the most ineffectual. Small wonder that jobs is the single biggest issue on which Modi is facing the most anger.