Pradhan Mantri Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi)

SYNOPSIS

This article highlights the plight of street vendors who have been hit hard by the pandemic-influenced lockdown and examines the policy of the Government of India crafted to lend a hand to the Street vendors in India to progress out of this financial crisis.

While looking at the features and objectives of these guidelines issued by the Ministry of Housing and Urban Affairs, the article delves into its working and additional initiatives employed in the process to promoted digital and financial literacy amongst the street vendors.

INTRODUCTION

“The lockdown has shut down the largest segment of the self-employed, who personify the under-exploited, ineffectively harnessed entrepreneurial spirit of India – street vendors, hawkers, itinerant sellers.”

The ongoing global pandemic has shattered the livelihood of people fromdifferent industries and workers around the globe, street vendors being one of them.The work of these informal workers depends upon providing people with essential products being in public places, which has been adversely affected by the pandemic- induced lockdowns, throwing them into turmoil.

In India, the National Federation of Hawkers comprises of about four crore people, who are earning money by selling goods and services at affordable rates at the door-step in metropolitans, small towns and rural areas. In addition to it, there are about 70-80 lakh workers who sell everything from snacks to books to toys in trains plying across the country. A major chunk of these activities carried out by workers in this informal sector has come to a hold, making it challenging for them to earn even the bare minimum for survival.

In these arduous times, the Ministry of Housing and Urban Affairs (MoHUA), Government of India has contemplated upon the plight of these workers and launched the Pradhan Mantri Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi) on 1st of June, 2020, providing therein a credit facility scheme that is promised to help more than 50 lakh urban and rural street vendors to revive their livelihood.

Objective of the scheme

PM SVANidhi is a central sector scheme, announced by the Finance Minister, Ms. Nirmala Sitharamanas a part of the Economic Stimulus-II under the Atma Nirbhar Bharat Abhiyan, aiming towards facilitating vendors, hawkers, thelewale and people involved in goods and services related to textiles, apparel, artisan products, barbers shops, laundry services etc., with a working capital loan to restart their work after lifting up of nationwide lockdown.

The scheme aims at providing working capital loan up to Rs. 10,000 without collateral, for a tenure of one year at subsidized rate of interest to street vendors/ hawkers vending in urban areas and surrounding peri-urban and rural areas, as on or before 24th of March 2020.

The scheme in order to open up new opportunities for this sector to move up the economic ladder,  also endeavours to grant incentives on regular repayment of loans and encourages digital transactions through rewards.

Eligibility criteria to avail loan

The beneficiaries belonging to those States/UTs which have notified rules and Scheme under Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 or have consolidated their own State Street Vendors Act (like Meghalaya) may participate in the present scheme.

A survey shall be conducted by the Urban Local Bodies (ULBs) to identify eligible vendors for successful implementation of the scheme. ULBs shall also be responsible for issuance of Vending Certificate, Identity Card, Letter of Recommendation within 15 days of the submission of an application by a vendor.

Identification criteria for eligible vendors:

The vendors

1. who are in possession of Certificate of Vending / Identity Card issued by ULBs.
2. who have been identified in the survey but not issued a Certificate of Vending / Identity Card.
3. who are left out of the survey process or who have started vending after completion of the survey and have been issued Letter of Recommendation (LoR) to that effect.
4. who surround development/ peri-urban / rural areas in the geographical limits of the ULBs and have been issued Letter of Recommendation (LoR) to that effect.

Also, vendors from rural/ peri-urban areasor urban areas who left for their native towns and villages due to the lockdown are eligible under the scheme as they are anticipated to come back to work when the situation normalises.

Lending institutions and interest subsidy

The scheme provides for working loan of up to Rs. 10,000 with tenure of 1 year and repaid in monthly instalments.

Scheduled Commercial Banks, Regional Rural Banks, Small Finance Banks, Cooperative Banks, Non-Banking Financial Companies, Micro-Finance Institutions and SHG Banks are permitted to give out loans due to their ground level presence in urban areas.

The rate of interest for this loan shall vary between the lending institutions.

• Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks & SHG Banks: The interest rate for the scheme shall be the prevailing rate of interest at these institutions.
• NBFC, NBFC-MFIs etc.: The interest rate for the schemewill be determines as per RBI guidelines for respective lender category.
• MFIs (non NBFC) & other lender categories not covered under the RBI guidelines: The interest rate for the schemewould be applicable as per the extent of RBI guidelines for NBFC-MFIs.

Interest Subsidy:

The eligible vendors who are availing the credit facility under this scheme shall obtain an interest subsidy of 7% which will be credited to the vendor’s bank account quarterly. This benefit can be availed for standard accounts and not NPAs, up to 31st of March, 2022 for first and subsequent loans till that date.

Formation of committees

In order to carry out effective implementation and monitoring of the scheme, a Steering Committee at the Central level, monitoring Committee at the State/UT level and a Committee headed by the Municipal Commissioner and supported by the Town Vending Committee at the ULB level shall be constituted.

Cashback facility to promote digital transactions

A network of lending institutions and digital payment aggregators like NPCI (for BHIM), PayTM, GooglePay, BharatPay, Amazon Pay, PhonePe and others shall be employed to simplify the digital transactions. Monthly cashback rewards in the range of Rs. 50 to Rs.100 shall be granted for such digital transactions.

Capacity building and promotion of financial literacy

The Scheme plans on building financial and digital literacy of the street vendors to advance the use of digital platforms to carry out transactions.An agent from MFI/ payment aggregator can be approached who shall assist in conducting sample transactions.

Information, Education and Communication (IEC)activities shall be conducted by the MoHUA throughout the country during the month of June and thereafter, the process of providing loansshall commence in the month of July.

Increase in use of E-commerce and social media platforms

Focus on empowering street vendors to explore the field ofE-Commerce alongwith providing them with means to obtain necessary quality certifications for conducting online business. Also, innovative use of various platforms including the local and social media will be encouraged to reach the targeted beneficiaries.

Mobile Application

To govern the working of the scheme, an IT platform shall be developed by the MoHUA to integrate a mobile application with the UdyamiMitra portal of SIDBI for credit management and PAiSA portal of MoHUA to administer interest subsidy.

It is claimed that the whole application process may take less than 30 days if documents are complete. The application process will be automated through a Mobile App and Web Portal and the borrowers shall be enabled to check real-time status of their applications.

Enhancement in credit limit on early and timely repayment of loans

No penalty shall be charged on pre-closure of the loan. Instead, on timely or early repayment, the vendors will be eligible for the next cycle of working capital loan with an enhanced credit limit.

CONCLUSION

The street vendors usually work on a small capital base which might have been consumed during the ongoing lockdown so this initiative taken up by the MoHUA shall prove to be beneficial to them in order to kickstart their business after the situation returns to normal.

It shall also be noted that various schemes which are already in existence fall short due to factors like lack of  implementation, awareness and accessibility. PMSVANidhi has provided for development of web portal and a mobile application and organization of awareness programs for the street vendors to ensure maximum coverage and accessibility of the scheme. Also, benefits such as interest subsidies, cashback incentives, credit enhancement steps attract the borrowers even more. The measures such as prescribing a time limit of 30 days for completion of the application process and constituting committees at ULB, Sate and Central level shall also boost the implementation of the scheme. Nevertheless, it will be intriguing to see how practical and favorable PMSVANidhi proves to be, despite such precedents.