PM SVANidhi Scheme - Functional Positioning is crucial for schemes/programmes too

The informal economy is a ubiquitous characteristic of developing economies across the globe. In india, a large section of the society is dependent on informal sector for their livelihood. Proactive use of technologies both in businesses and governance has, over a decade formalised this sector to a considerable extent. The gig economy drive has also contributed to this but still the unorganised labour force lacks social security, a key feature to distinguish between those in organised labour force.

?The very nature of the sector (like migrated population, geo-localisation, low levels of education and skills, poor working conditions, insecurity of income, lack of social security, and vulnerability to exploitation) makes it challenging for any government to ensure constitutional provisions for them. In urban setup, street vendors constitute a considerable part of this segment. Around 15% of the total informal urban economy is driven by street vendors. They provide feasible and economical options of goods and services to the nearby population. The sector being unorganised is nature has a two-way perspective, ease of doing business acts as an edge for the vendors whereas their economic realisation in the formal economy always been a challenging task for the government.

PM SVANidhi; a central sector scheme was launched by GoI especially for street vendors to provide affordable working capital loan to street vendors in order to support their livelihoods and enable them to resume their businesses, post Covid-19 in June 2020. MoHUA in partnership with SIDBI is implementing this scheme, aiming to benefit around 60 lakh street vendors across the country. There are provisions for subsidy for both regular repayment and digital transactions under the scheme.

(https://pmsvanidhi.mohua.gov.in/)

Although digital transactions are very common for street vendors now-a-days but there hasn’t been much role of the scheme in this. It has also not been much successful in limiting vendor’s reliability on informal credit system. Schemes for masses; by default, carries a certain set of challenges like awareness, understanding, coverage and competition with other schemes which needs to be plugged in a timely manner. In addition to these, SVANidhi scheme is facing challenges like exclusion error, documentation, financial literacy, additional edibility checks from lenders, nature of credit requirement of vendors. Subsequent lockdowns (due to covid-19) in different regions of the country, further affected the uptake of the scheme.

Special awareness campaigns, on-field assignments to issue Vendors’ Identity Card and registration of vendors are needed to streamline the pace of the scheme. Today, street vending is not limited to low priced goods and services, there is need to extend the loan amount; catering to each segment of the vendors. Simplification of application process and quick disbursement of loan amount will be of great help. This can be done using DBT and other technological means.

?Though the scheme is noble but is bit ambitious to cover a huge segment of street vendors in India. This is true with its overdependence on Urban Local Bodies (ULB) and TVC which have unknowingly created a gap between the desired outcome and the result. Introduction of local vendors’ association in the system can fasten the process and will also be easier for municipalities to regulate vendors. They can also be useful in managing vending localities and providing storage facilities to the vendors. The scheme is concentrating upon only one specific issue (credit availability during pandemic); it needs to be more inclusive in nature to draw the required attention to achieve its outcome and also to ensure retention of vendors with the formal economy. Convergence with schemes of the Central Government like MUDRA yojna, Deen Dayal Upadhyaya Grameen Kaushalya Yojana, Annapurna Scheme and integration with e-Shram portal will bring all social security and employment schemes under single umbrella and street vendors can access a wider range of benefits and support for their livelihoods.

The earnings of street vendors are never systemised and depends on vending place, number of hours of selling, accessibility for customers, other ongoing work and activities of multiple authorities – the municipal corporation, police (thana as well as traffic), regional development authorities, district administration, local panchayats and sometimes extortion racket. Despite these challenges, they are able to make their livelihoods only because they are working in an unorganised setup. Hence, it is crucial for the scheme to matchup with the cost; a daily wage vendor will bear to access regulated financial market by adhering to compliances of doing business. The scheme is very favourable and supportive for enhancing the livelihood of street vendors but it needs to be repositioned from just an antidote to adversities of covid-19 to a financial and social security scheme for street vendors.