Remember the Atma Nirbhar – TV Show of Mrs. Nirmala Sitaraman and Mr. Anurag Thakur? After that, both have disappeared for long. May be rehearsing for the next show. Mr. S.Gurumurthy has announced that more will come in September. Let’s wait and see. Suddenly there was speculation that Mr. K.V.Kamath will be the Finance Minister. But he is busy fixing NPA norms. He himself is a NPA who groomed Ms. Chanda Kochhar and is under investigation. Dr. Subramaniam Swamy is making fun of FM and PM in public but insists that he will support this PM and BJP will win the elections with Hindutva. He has publicly announced Khasi and Madura next.

In the mean while the MSMEs which hailed Madam’s announcements are crying because of the procedural problems and inadequate supply of credit. One major announcement of the FM was a street vendors loan to 50 lakh street vendors who will be provided Rs.10,000 loan each with 100% government guarantee.

Finally circulars reached the banks much late but with an instruction to implement a scheme w.e.f.1.7.2020.

You read the circular you will understand how the street vendors and the public in general are cheated. I had made a demand in my article the next day of the announcement that this amount should not be a loan but a direct cash benefit to the street vendors who should not be asked to run from pillar to post. Let’s have a look.

PM Street Vendors Atma Nirbhar Nidhi or PM SVANidhi is implemented by the Ministry of Housing and Urban Affairs to make street vendors self reliant. With Rs.10,000/- loan in this country people can become self-reliant ! Minimum basic salary is Rs.18000/- in central government (plus DA & other Allowances) arrived at through a formula called Aykroyd formula which calculates minimum basic needs for a family.

Now see the details:
The loan will be available to street vendors engaged in vending in urban / surrounding development / peri urban / rural areas on or before March 24, 2020 and in procession of certificate of vending / Identity cards issues by Urban Local bodies (ULB) or identified in the survey but yet to be issued identity card / or notified in the website of Ministry / State Govt / ULB and portal created for the purpose by the government.

When you search the website of Ministry of Housing and Urban Affairs, the computer says that the site is “Not Secure”. Inspite of it you browse, there are only guidelines which are more complicated. The scheme will be implemented only in states and UTs who have framed rules and notified schemes under Street Vending Act 2014.

If you search the website it has another condition that your mobile number has to be linked to Aadhar.

How many street vendors would have license before 24th March 2020? How many would have mobile linked to Aadhar? Are there no street vendors in rural areas?  Who gives them license?

Interestingly the loan is not Rs.10,000/-. The circular says working capital upto Rs.10,000/- . So banks can give less also. The funniest is that the loan has to be repaid within 12 months. So on an average one has to pay Rs.1000 PM for a loan of Rs.10000/-. You can imagine!

Another innovation is that the scheme will incentivize digital transactions. Rs.50 for 50 digital transactions R. 25 more for the next 50 transactions and Rs.25 for next 100 transactions. This is to benefit BHIM (NPCI), PayTM, Googlepay, Bharat Pay, Amazon Pay, Phonepe etc. What a rotten idea to incentivize these agencies?

The scheme has also suggested that business correspondents may be used to source applications. They are poorly paid and everyone knows that they take some commission.

Then comes the 100% Credit Guarantee. Now the scheme says it has provisions of Graded Guarantee Cover by CGTMSE.

First loan default (Upto 5%) will be 100%. Second Loses (beyond 5% to 15%) will be 75% of default portfolios. Maximum guarantee coverage will be 15% of the year portfolio. You can guess what it is, Where is the 100%?

What will happen?
Real street vendor won’t have time to bribe and get a license, bribe to submit an application and finally waste days of his work to get some amount, definitely less that Rs.10000/- in his hand. So there will be fraudsters, who will get all the certificates and loans and they will never repay. Banks will get 15% guarantee amount and write off 85%. After all it is Rs.5000 crores. Is it worth the whole trouble for banks? Straight away debit profit and loss account and pay my dear bankers. Because the government is bankrupt it cannot even afford Rs.5000 crores for the poor telewalahs. God save our country.

Thomas Franco is former General Secretary of All India Bank Officers’ Confederation.

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