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PM Modi’s pet schemes underperforming in Gujarat: Report

Stress faced by certain industries, drought in some areas hurt patronage of financial schemes for MSMEs, says State Level Bankers’ Committee report

Written by Avinash Nair | Ahmedabad | Updated: March 20, 2019 7:34:20 am
PM Modi’s pet schemes underperforming in gujarat: Report Despite the extension, Vadodara, Gir Somnath and Kutch districts reported less than 50 per cent achievement of targets. (Express file photo)

The Union government’s high profile financial aid schemes meant to support the micro, small and medium enterprises of the country have not performed as well as expected in Gujarat, a report of the State Level Bankers’ Committee (SLBC) released on Tuesday showed. Districts such as Vadodara, Gir Somnath and Kutch achieved less than 50 per cent of the target for the “loan in 59 minutes” scheme, while Stand-Up India, which facilitates loans for people from Scheduled Castes and Scheduled Tribes as well as women, and the MUDRA loan scheme had been underperforming, the report said.

Stress faced by certain industries as well as drought were found to be the reasons that some districts performed poorly. Underachievement of targets of the “PSBloansin59minutes” scheme—floated to provide micro, small and medium enterprises (MSME) loans up to Rs 1 crore in just a matter of 59 minutes—in Gujarat forced the campaign to be extended by over a fortnight in the state.

Despite the extension, Vadodara, Gir Somnath and Kutch districts reported less than 50 per cent achievement of targets, the SLBC report shows.

“Earlier, the campaign was slated for 100 days. However, owing to the under-achievement of targets by few districts, the campaign was extended till February 28, 2019,” states the report that was made public on Tuesday after the 160th meeting of SLBC-Gujarat.

The MSME support and outreach campaign was launched by Prime Minister Narendra Modi on November 2, 2018 in 100 districts across India, out of which nine districts are from Gujarat.

Despite this, high performance in certain districts ensured that at the end of February 2019, the scheme managed to achieve almost 98 per cent of the target. In all, the scheme reached out to 2,09,746 MSMEs out of the targeted 2,14,616 in the nine districts of Ahmedabad, Kutch, Rajkot, Gir Somnath, Bharuch, Vadodara, Valsad, Surat and Surendranagar.

The target was mainly achieved because Surendranagar, which serves as the sanitaryware cluster, achieved 207 per cent of its target, while Valsad and Bharuch, serving the chemical clusters, achieved 164 and 126 per cent. Similarly, Surat (powerloom textiles) and Ahmedabad (Plastics) achieved 136 and 100 per cent.

It was the four districts of Gir Somnath, Kutch, Vadodara and Rajkot that fared poorly under the 59-minute loan programme, with as low as 34 per cent of the target achieved in Gir Somnath while Rajkot achieved at least 70 per cent. “There were not many MSMEs seeking loans in Gir Somnath (which serves the food processing cluster). In Rajkot (foundry cluster) the industries are already under stress and so were not in a position to take loans. In Kutch (handicrafts cluster), drought has affected the industry,” a senior official who attended the SLBC meeting said.

For instance, in Gir Somnath which is a hub of units involved in export of fisheries, only 1,015 of the targeted 2,962 MSME units were tapped. Similarly in Kutch, only 6,830 of the proposed 14,534 units took advantage of the scheme.

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