At the time when Public Sector Banks (PSUs) are facing crisis due to disbursement of insecure loans to industrialists and merchants, the figure shows that from 1 April 2017 to 10 February 2018, the PSU banks rejected 88% of the loan applications filed under the Prime Minister Employment Generation Programme (PMEGP).   

In last year’s Budget, the Central government had set a target of providing self-employment by way of giving loan to 7.5 lakh youth, but from April 2017 to February 2018, the figures show that more than 4 lakh youth applied under PMEGP, but of these only 12% of the unemployed were given loans.

The purpose of the PMEGP is to increase self-employment. Under the scheme, any person above the age of 18 years can avail the loan from the government, ranging from Rs 5 lakh to Rs 10 lakh for the service sector project and from Rs 10 lakh to Rs 25 lakh for the manufacturing sector.

According to the PMEGP portal, from April 2017 to 10 February 2018, as many as 4,03,988 youths applied for loans under the PMEGP. Out of these 3,49,208 applications were placed in front of the District Level Task Force Committee (DLTFC) headed by the collector. The committee found only 2,52,536 applications suitable for recommendation for loan and forwarded it to the banks, but only 49,721 of these applications were sanctioned loan by the banks.

As per the statics available on the PMEGP portal, 89,568 applications are pending in DLTFC. Out of these, 61,723 applications are pending for more than two months. While 5,457 applications are pending for more than one month, 2,23,888 applications are pending from 15 days to one month days.

In the list of pending applications, Assam appeared on top as the state has 23,683 applications pending, whereas in Uttar Pradesh, 9,514 applications are pending. The numbers in other states are: 4,749 in Gujarat, 10947 in Karnataka and 5288 in Maharashtra.

Niraj Roy, an applicant from Bihar’s Mujhafarpur district, said “After doing my graduation in 2005, I am jobless and when I heard of the PMEGP scheme I made a project for the opening of an ice-cream making factory. I applied for the loan under PMEGP but after running for more than six months I couldn’t get my loan sanctioned.

“Some of my friends had also applied for the loan but all applications got rejected. I don’t know to whom they are giving these loans,” Roy added.

“Most of the applications were rejected on the task force level due to small mistakes or lack of mandatory documents. For example, I have witnessed that several applicants’ names mentioned in their Permanent Account Number (PAN) were not matching with their Aadhar card, thus the taskforce rejected the loan application on the primary level itself,” said Atul Singh, a PMEGP task force committees member who also represents the District Industry Centre of Bihar’s Mujhafarpur  district. 

DLTFC was constituted in every district across the country for enabling better implementation of PMEGP. The DLTFC is headed by the District Magistrate (DM) whereas the committee consists of the General Manager of District Industry Center, Officer of Lead Bank, Khadi Village Industries Department.

“The primary work of the DLTFC is to scrutinise the applications which come for loan under the PMEGP. Also the work of DLTFC is to facilitate the youth in getting loans,” Singh told The Sunday Guardian

However, the banks have their own reasons for the mass rejections of these loan applications. “In most of the case the applicants’ project which is basis for the grant of loan under the PMEGP are found unviable. Besides the project report, absence of the Cybill report, factual errors in application, lack of documents and business knowledge are some of the other important reasons for the rejection of loan applications,” Kamlesh Kumar, who is a manager at the State Bank of India, told The Sunday Guardian.

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