Tag: developing india

Pm mudra yojana scheme

The Government of India launched a flagship scheme called Prime Minister Mudra Yojana (PMMY) on 8th April 2015 to extend affordable loans to the non-corporate, non-farm micro and small enterprises to cater to their funding needs. One of the major aims of MUDRA loans was to bring the target audience into the formal financial fold.

What is MUDRA?

Micro Units Development and Refinance Agency Limited is MUDRA full form created as a refinancing institution providing loans up to Rs. 10 lakhs maximum to the eligible enterprises through the Commercial Banks, RRBS, Cooperative Banks, NBFC and MFI etc. The borrowers can approach the nearby branches of the lending institutions or apply for loans under the MUDRA scheme or apply online.

The genesis of MUDRA:

The largest economic sector of the country after agriculture comprises of non-corporate micro enterprises generating the bulk of the employment opportunities estimated to be approximately ten crores impacting the life of 50 crore Indians. They are mainly engaged in manufacturing, trading, processing and services, and the enterprises are broadly classified as proprietary or Own Account Enterprises (OAE). Understandably, this sector is deemed to be the economic bulwark of the country, yet it is reckoned to be the largest disorganized business eco-systems in the world. The NSSO survey of 2013 places the OAE at 5.77 crore units, which lie out of the ambit of the formal financial sector enjoying no credit facilities whatsoever. The MUDRA scheme under the aegis of the PMMY aims to be this huge sector into the fold of institutional credit, transforming them into a potent instrument of employment and GDP growth.

The mission statement of Pradhan Mantri Mudra Loan is to create an inclusive value based entrepreneurial culture which is sustainable in partnership with financial institutions in achieving financial security and success.

 key benefits of MUDRA loan:

  • Micro and small enterprises engaged in income generation are the prime target for extension of loan facilities.
  • The borrowers are not required to provide any collateral or security to avail of Mudra Loan.
  • There are no processing charges for availing of the loan.
  • The loans are provided for the funded and non-funded category, inducing an element of flexibility in the usage of funds.
  • The loans can be in the form of term loans, overdraft facility, letters of credit or bank guarantees, thus catering to a wide array of requirements.
  • The Mudra loan scheme does not prescribe any minimum amount.

MUDRA Loan Details:

The name of the type of loan facilities under the Pradhan Mantri Mudra Loan is suggestive of the developmental phases of an enterprise and the quantum of loan sanctioned. There are three Categories of the MUDRA loans based on the stated parameters making the business viable.

1. Sishu: This loan is meant for entrepreneurs who are looking to start a business or in the process of establishing one. The maximum loan sanctioned under this category is Rs.50000. The basic norms of the loan are:

  • To provide finance for machinery.
  • Valid quotation and supplier details are essential.

2. Kishor: Under the MUDRA scheme, this category of loan is targeted towards entrepreneurs looking to expand their business through the infusion of fresh funds. Thus, the loan sanctioned under this category is in the range of Rs.50001 to Rs.5 lakhs. The key requirements for availing of this loan are:

  • The existing balance sheet for the previous two years.
  • Bank account statement.
  • Income and sales returns.
  • Estimated balance sheet for the current year.

3.Tarun: The third type of loan under PMMY is for entrepreneurs who are well entrenched and have established themselves in the business and yet looking for further growth or diversification. The loan sanctioned under Pradhan Mantri Mudra Yojana for this type of loan is in the range of Rs.500001 to Rs.10 lakhs. The amount involved being the highest under the MUDRA Scheme, the requirements are more stringent than the other two loans. Some of the key requirements are:

  • All the requirements listed for Kishor Mudra Loan.
  • Address and Identity proof.
  • Caste certificate, if eligible for reservation.
  • Primarily the loan facilities are extended to non-corporate non-farm enterprises. However, farm sector enterprises involved in allied services like fisheries, food processing and horticulture, to name a few are eligible.

So, if you are thinking to start your own business, you can take benefits of this scheme and contact with your nearby bank branches, check the eligibility of banks and processes and take loan according to your business.

skill india mission

 Skill India Mission is a government scheme launched in 2015. It is an umbrella scheme that has many skilling schemes and programmes under it. The chief objective is to empower the youth of the country with adequate skill sets that will enable their employment in relevant sectors and also improve productivity. 

Skill India Objectives

The chief objective of the Skill India Mission is to provide market-relevant skills training to more than 40 crore young people in the country by the year 2022.

  • The mission intends to create opportunities and space for the development of talents in Indian youth.
  • It aims to develop those sectors which have been put under skill development for the last many years, and also to recognize new sectors for skill development.

Other objectives are:

  1. Closing the gap between skill required by the industry and skills people possess for employment generation.
  2. Reducing poverty in the country.
  3. Increasing the competitiveness of Indian businesses.
  4. Ensuring that skill training imparted is relevant and of quality.
  5. Preparing Indians to take on the world manpower/resources market.
  6. Diversifying the existing skill development programmes to meet today’s challenges.
  7. Building actual competencies rather than giving people mere qualifications.
  8. Offering opportunities for lifelong learning for developing skills.
  9. Augmenting better and active engagement of social partners and building a strong public-private partnership in skill development.
  10. Mobilising adequate investments for financing skills development sustainable.

Features of Skill India

There are many features to the Skill India Mission that make it different from the previous skill development missions.

  • The focus is on improving the employability of the youth so that they get employment and also enhances entrepreneurship among them.
  • The mission offers training, guidance and support for all traditional types of employment like weavers, cobblers, carpenters, welders, masons, blacksmiths, nurses, etc.
  • New domains will also be emphasised on such as real estate, transportation, construction, gem industry, textiles, banking, jewellery designing, tourism and other sectors where the level of skill is inadequate.
  • Training imparted would be of international standards so that India’s youth get jobs not only in India but also abroad where there is demand.
  • An important feature is the creation of a new hallmark ‘Rural India Skill’.
  • Customised need-based programmes would be started for specific age groups in communication, life and positive thinking skills, language skills, behavioural skills, management skills, etc.
  • The course methodology would also not be unconventional and would be innovative. It would involve games, brainstorming sessions, group discussions, case studies and so on.

Why does India need a skills development programme?

As of a 2014 report, India’s formally skilled workforce is just 2%. Additionally, there is a huge problem of employability among the educated workforce of the country. Lack of vocational or professional skills makes it difficult for the youth to adapt to changing demands and technologies of the marketplace. The high level of unemployment is due to the failure to get jobs and also due to a lack of competency and training.

  • A study by the Skill Development Council (NSDC) indicates that there will be a need for around 12 crores skilled manpower by 2022 across 24 key sectors.
  • Casual workers, who constitute about 90% of the labour force, are poorly skilled as they do not get adequate training. Current vocational training programmes do not meet their demands.
  • There is a problem of social acceptability when it comes to vocational education. Vocational courses are looked down upon and this needs to change.
  • Changing technology is a big challenge and opportunity for the labour force. Employees will have to constantly upgrade their skills if they are to remain relevant in the job market.
  • There is a problem with the lack of infrastructure in the current training institutes.
  • Another problem is the poor quality of trainers available. Students trained by such trainers are not employable in the industry.
  • There is a big issue with the standardisation of skills in the country. New schemes are designed to resolve this issue by having nationwide standards that also stand up to international benchmarks.

Skilling is important because of the following factors:

  1. Demographic dividend: Most major economies of the world have an ageing population. India, with a favourable demographic dividend, can grab this opportunity and serve the manpower market. But, for this adequate skilling is to be provided to up the employability. To capitalise on this, there is only a narrow demographic window, that of a few decades.
  2. The percentage of the workforce receiving skill training is only 10% in India which is very small compared to other countries – Germany (75%), Japan (80%), South Korea (96%).
  3. Sectoral mobilisation: As productivity improves in agriculture due to increased mechanisation, there will be fewer people required in the farming sector. There will thus be a shift from this sector to other secondary and tertiary activities.

National Policy for Skill Development and Entrepreneurship 2015

The chief objective of this policy is to match the challenge of skilling at scale with speed, standard (quality) and sustainability. It aims to offer an umbrella framework to all skilling activities carried out within India, to align them to common standards and connect skilling with demand centres. In addition to laying down the objectives and expected outcomes, the policy also identifies the overall institutional framework which will act as a means to achieve the expected results. 

Skill Loan Scheme

Under this scheme, loans ranging from Rs.5000 to Rs. 1.5 lakhs will be provided for those seeking to attend skill development programmes. The idea behind the scheme is to remove financial hurdles for people who want to upgrade their skills and learn new skills.

Conclusion

Though skill training in the country has improved in recent years, the absence of job linkages is only aggravating the problem of unemployment. The newly appointed Minister for Skill Development and Entrepreneurship, Dharmendra Pradhan has echoed a similar concern. “We have to think big way, a lot of technologies are coming, conventional jobs are squeezed, new verticals are emerging, what are they, they have to be informed to employable youths which all big jobs are there.”

Skill development starts with identifying future job prospects and segmenting it according to the need and feasibility of training candidates. The PPP model of operation of SSCs presents a great chance of bringing industry best practices in learning and development into such training modules. Private players can use technology to automate, improve and scale training and certification approach of skill-based training. By creating better linkages between the many stakeholders in the process and establishing key deliverables and a clear chain of accountability would help make such training programs more effective. Working towards increasing the accessibility of such training programs, in parallel, should also be looked at. A recently proposed move of making such training more district centric is a step towards that direction.

As India aims to have one of the strongest economic growth stories in the 21st century, it becomes vital for it ensure it growing workforce is capable to handle the incoming disruptions and find suitable jobs. And a core part of this is to tackle the problem of unskilled labor in India and fix its skilling initiatives, today rather than tomorrow.