the PM SVANidhi scheme for street vendors

Launched in June 2020 amid the pandemic.

It is a micro-credit facility that provides street vendors a collateral-free loan of Rs 10,000 with low rates of interest for a period of one year.

the scheme – part of the AtmaNirbhar Bharat package – has received 31,64,367 applications from across the country (except from Sikkim, which is officially not taking part in it).

Why Launched?  nationwide lockdown left daily wage workers and street vendors out of work. 

 In the long term, it aims at establishing a credit score for the vendors as well as creating a digital record of their socio-economic status, so that they can avail the Central government schemes later.

The scheme also attempts to

•  formalise the informal sector of the economy and 
• provide them safety nets and
•  a means of availing loans in the future.

This loan charges below 12% rate of interest, and creates a credit score of the vendors, so that if they repay the loan on time, they can avail more

All vendors who have been vending from or before March 24, 2020 and with a certificate of vending can avail the loan.

 As per the Street Vendors Act of 2014, the Town Vending Committees (which comprises the local authorities and vendors from an area) issue a certificate of vending after a survey has been conducted of all the vendors.

States across the country have unevenly implemented the Street Vendors Act of 2014, which necessitates a survey of the vendors to provide them with a certificate of vending.

But since many states and cities have not conducted the survey yet, many vendors are unable to provide any such certificate of vending. Instead, as per the scheme, the urban local bodies – in this case, the municipalities – shall provide a Letter of Recommendation for every vendor who wishes to avail the loan.

Survey is not required for this scheme. The ULBs can issue an LOR, or if the vendor is a member of a vendor association, he or she can apply.

Issues:

1. Lack of certificate of vending.
2. Some municipalities are also slow in issuing LORs, which has kept hundreds of vendors waiting for the loan for months.
3. LOR applications also tend to be rejected.
4. mobile numbers of various vendors were not linked with their Aadhar cards. To address this, various ULBs have now set up camps.
5. the mindset of local authorities against vendors.
6. In Delhi, various vendors who have received the loans are often evicted from their place by either the police or by the ULB officials, hitting their only source of income and their ability to repay the loan
7. The LORs issued by the ULB do not give any legal authorisation or rights for vending: Once an LOR is issued by the ULBs, its mandate lasts a month, after which the survey for the issuance of the certificate of vending should be undertaken by the ULBs. But since it is a state subject, the central government can only direct or sensitise the state governments on the importance of doing so, and not evicting vendors who have availed the loan but do not have a certificate.

Credits: Indian Express Article