Modi’s Failures: Job Creation Schemes Fail Despite Huge Funding

Just like the much hyped Skill Development Programme, which has yielded insignificant results, three other employment generation schemes of the Modi govt. have failed to make any notable headway.

Modi’s whole strategy of job creation – based on promoting atomised self-employment – was doomed from the beginning. It was based on a misconception that all you need is some skills and some few lakh rupees and – presto! – prosperity will embrace even the poorest. This idyllic vision, derived from RSS theology was never going to work. And, Modi’s four years have shown it. Look at the results of these three schemes.

The Prime Minister’s Employment Generation Programme (PMEGP) was actually started by the preceding UPA govt. in 2008-09. Modi govt. repackaged it and gave it a new push in its desperate attempt to boost employment generation. It offers bank loans and a margin money subsidy of 25% in rural areas and 15% in urban areas for setting up small enterprises. Its run by the ministry of micro, small and medium enterprises.

Since 2014, Rs.4,632 crore have been disbursed by the ministry as subsidy in setting up of 1.8 lakh units which have given employment to a total of 13.2 lakh persons. That’s about 3.3 lakh people per year. On an average, each unit that got the bank loan also got a subsidy of about Rs.2 lakh. These figures were stated by Santosh Kumar Gangwar, labour and employment minister in the Rajya Sabha on 4 April 2018, in response to a query.

Then there are two schemes named after RSS ideologue Deen Dayal Upadhyaya. The first is called Deen Dayal Upadhyaya Grameen Kaushalya Yojana under which rural youth are trained and placed in jobs. Under this scheme, 2.7 lakh persons were given jobs in the past four years, according to the same Parliamentary reply.

In the other scheme, called Deen Dayal Upadhyaya Antyodaya Yojana – National Urban Livelihoods Mission, similar training is given in urban areas to unemployed youth and placements done. This scheme created 2.5 lakh jobs in the four years since 2014.

So, in all, these three schemes have created 18 lakh jobs – or self-employment opportunities – in four years. There is no study to indicate whether the small enterprises set up in these schemes continue to function or they have folded up.

One of the reasons for the abysmal job creation is in the very nature of the objectives. Not all small enterprises can be successful. And, in the current economic stress with flagging demand and low job creation, the chances of such enterprises taking off or surviving are not very bright. The number of sick MSMEs during 2015-16 has doubled to 4,86,291 compared to 2,22, 204 sick units reported during 2012-13, as per the govt.’s admission.

There were 5.89 crore enterprises in the country according to the 6th Economic Census done in 2013-14. This excludes agricultural, defence related and social service related enterprises.  Seen as a proportion of this, the number of enterprises created under PMEGP is a mere 0.3%.

Modi’s whole strategy of job creation – based on promoting atomised self-employment – was doomed from the beginning. It was based on a misconception that all you need is some skills and some few lakh rupees and – presto! – prosperity will embrace even the poorest. This idyllic vision, derived from RSS theology was never going to work. And, Modi’s four years have shown it.