Poverty alleviation programmes in india

Poverty Alleviation Programmes in India: 6 Amazing Underperforming Schemes

In the last article, I have discussed the Employment Generation-based and Women Empowerment-based Poverty Alleviation Programmes in India. However, in this article, I will continue that topic and discuss Industry-based and Social Assistance-based Poverty Alleviation Programmes in India.

Industry based Poverty Alleviation Programmes in India

Micro firms build a significant economic sector in our nation and supply substantial employment after the farming sector. This sector comprises micro-units active in the manufacturing, processing, trade, and services sector. It gives the job to over ten crore people. Many of these sectors are sole proprietorship efforts and are often known as the Non-Corporate Small Business category.

MUDRA Yojana

The MUDRA Yojana under Poverty Alleviation Programmes in India is a government-run company that emphasizes micro-unit growth and refinancing. They give advances under three various provisions, i.e. Shishu, Kishor, and Tarun, to demonstrate the recipient micro unit’s development and capital requirements. This advance is available to Indian micro-businesses and entrepreneurs.

Beneficiaries might use the loans available under this plan for the following purposes:

  1. Car loan
  2. Commercial vehicle loan
  3. Loan for plant and machinery
  4. Revamping the business space
  5. Two-wheeler loan
  6. Working capital loan

The credit ceilings and interest rates during the developing phase of the corresponding firm availing of such credit vary depending on the financing options available under this Poverty Alleviation Programmes in India. The following are the features of respective elements of this scheme:

Shishu: In this part of the programme, loans up to ₹ 50,000 at a monthly interest rate of 12 percent per year are fixed. The allowed loan may be paid back within five years from receiving the amount.

Kishore: In this part of the programme, advances fluctuating from ₹ 50,000 to ₹ 5,00,000 are granted. The bank would regulate the interest percentage based on the schemes’ standards and the recipient’s credit history.  Also, It’s the bank’s discretion that determines the span of the credit payback period.

Tarun: In this part of the Poverty Alleviation Programmes in India, advances ranging from ₹ 5,000 to ₹ 10,000 are granted. According to the guidelines of these schemes and the recipient’s credit history, the bank would regulate the interest percentage. Also, It’s the bank’s discretion that determines the length of the loan payback period.

Poverty alleviation programmes in india
Pradhan Mantri MUDRA Yojana (PMMY), GOI

Mudra Offerings

This scheme is sanctioned through:

  1. 17 Private Banks
  2. 25 Non-Banking Financial Institutions
  3. 27 Public Banks
  4. 31 Regional Rural Banks
  5. 36 Microfinance Institutions
  6. 4 Cooperative Banks

The Shishu option is available for 60% of the advances under this arrangement, while the Kishore and Tarun choices are available for 40% of the advances.

Make in India

The fundamental purpose of showcasing India as a worldwide manufacturing hub is to persuade international and local enterprises to produce their products in India. The DIPP is responsible for this signature mechanism. This sector is projected to lift the manufacturing sector’s participation in GDP to 25 percent by 2025. Make in India has launched several additional Poverty Alleviation Programmes in India to attract foreign investment, protect intellectual property rights, and modernize the manufacturing sector. It concentrated on 25 main sectors of the economy, extending from autos to business process management and IT.

Poverty alleviation programmes in india
Make in India, GOI

It also seeks to generate employment, improve skill development, encourage innovation, and safeguard intellectual property. The insignia is a lion made of gear wheels, representing the significance of manufacturing in the Government’s economic development goals. The following four pillars underpin the approach:

New Processes: The Government is implementing several measures to build capacity for attracting foreign direct investment (FDI) and encourage businesses to bring investment possibilities to the nation. Some businesses have already begun to lessen the effects of outdated rules and regulations on the business climate. This change is also linked to the World Bank’s Ease of Doing Business index characteristics, which will help India improve its standing.

New Infrastructure: Infrastructure is critical for every industry’s growth. The Government of India is opposing industrial corridors’ development to create smart cities with cutting-edge technology and high-speed communication networks. A quick registration system and improved infrastructure for Intellectual Property Rights certifications help keep modernizing and exploring operations.

New Sectors: This plan has selected 25 segments to stimulate comprehensive information sharing through a collaborative online platform. The GOI has permitted 100 percent FDI with some necessary minute restrictions. It has also augmented the FDI ceiling to 100% in the defence and pharmaceutical industries.

New Mindset: GOI has always been seen as a regulator rather than an implementer. This strategy aims to correct this misconception by introducing a paradigm change in how the Government interacts with a variety of sectors. It will emphasize its role as a partner in economic growth.

Skill Development

In July 2015, the Indian Prime Minister announced the commencement of the Skill India initiative, which aims to teach more than 40 crore Indians a variety of skills by 2022. It includes several government-sponsored projects, including the scheme’s goal to provide an overarching framework for all skilling initiatives, allowing them to be compared to standard criteria and linked to demand centers. This classification approach will also categorize the many institutional frameworks that may favor desired results favorably.

National Skill Development Mission: This project was developed to strengthen innovation among various industries and state governments in developing skills. In addition, to realize the notion of the Skill India Programme, this arrangement will also merge and consolidate crafting activities and facilitate decision-making across numerous businesses to achieve unified and speedy training.  It is conducted via a well-established official apparatus under the Ministry of Skill Development and Entrepreneurship.

Skill Loan Scheme: Students enrolled in technical courses at polytechnics, training institutes, and other institutions are eligible for a skill-based loan. The amount of credit fluctuates between ₹ 5,000 and ₹ 1,50,000. The time it allows to repay the loan is determined by the amount borrowed, and it may be as long as seven years.

Pradhan Mantri Kaushal Vikas Yojana: PMKVY’s objective is to promote a large population of youthful individuals to participate in industry-based vocational learning to maintain the economy’s health. People who currently have talent will be evaluated and certified using the Recognition of Prior Learning. The administration takes complete accountability for all training and accreditation expenditures underneath this arrangement. Any Indian resident who has left high school or college, and is currently jobless, is covered under it.

The National Skill Development Corporation of India was founded as a public-private partnership (PPP) to improve the technical abilities of Indian citizens and empower them to become independent. The grounds upon which it is constructed are as follows:

  • To lower the risk by providing long-term financial support, such as research grants.
  • To formulate a numerous variety of high-quality vocational educational institutions.
  • To ascertain the formation and long-term feasibility of the skill-expansion modalities.

The Industry-Directed Sector Skill Councils are also part of it. Various more Poverty Alleviation Programmes in India introduced by the Indian Government that contributes to the overall skill development programme include:

  1. Apprenticeship training
  2. Green Skill Development Programme
  3. National Apprenticeship Promotion Scheme
  4. Pradhan Mantri Kaushal Kendra
  5. Pradhan mantri Kaushal Vikas Yojana
  6. Skill development for minorities
  7. Deen Dayal Upadhyaya Grameen Kaushalya Yojana
  8. Craftsmen Training Scheme
  9. Financial Assistance for Skill Training of Persons with Disabilities

Social Assistance based Poverty Alleviation Programme in India

The National Social Assistance-based Poverty Alleviation Programme in India provides financial help to handicapped and elderly people, widows, and bereaved families that live in below-poverty-line homes after the death of the family’s head.

National Social Assistance Programme

The National Rural Employment Guarantee Programme (NSAP) was first implemented in August 1995 by the Rural Development Ministry under the Indian Government. The NSAP is an important element in putting the DPSP’s stated in Articles 41 and 42 of the Constitution into practice.

National Social Assistance Programme
National Social Assistance Programme

Currently, there are four schemes in this programme, notably

Indira Gandhi National Old Age Pension Scheme: Only people who are 60 years or older are eligible for this arrangement. The monthly pension payout for those aged 60 – 79 years of age is ₹ 200. A monthly pension of ₹ 500 is available to individuals over the age of 80. It also includes the Annapurna Scheme, which provides 10 kilos of wheat & rice to beneficiaries monthly. The goal of the programme is to offer food security to those older people who qualify but are not yet supported by the IGNOAPS.

Indira Gandhi National Widow Pension Scheme: The beneficiary must be above 40 years of age to be qualified for the IGNWPS, and also the monthly pension payment is ₹ 300. A monthly pension of ₹ 500 is available only to those who are above 80 years of age.

Indira Gandhi National Disability Pension Scheme: The monthly pension under the IGNDPS scheme is ₹ 300. To be eligible, the beneficiary or pensioner must be above 18 years old. Furthermore, the proportion of those who are handicapped must be 80% at least. A monthly pension of ₹ 500 is available to anyone over the age of 80. People who are dwarfs will be considered qualifying beneficiaries under this scheme.

The National Family Benefit Scheme: It is a form of poverty-relief programme that gives cash support to households. A total of ₹ 20,000 would be sanctioned to the bereaved family in the event of the death of the household head, who was between the ages of 18 and 60 and was the only earning individual of the household. The award will be handed to the member of the household who is identified as the next household leader. The concept of household under this model includes dependent parents, spouses, unmarried daughters, and minor children. The term “household” would include an unmarried adult’s dependant parents and younger brothers or sisters in the event of his or her death.

Atal Pension Yojana

Atal Pension Yojana (APY) under Poverty Alleviation Programmes in India lectures on the old age income safety of the employed poor and the long-life risks among the workforces in the unorganized segment. It inspires the workforces in the unorganized segment to willingly save money for their retirement. The scheme was launched under the Ministry of Finance, Government of India, in June 2015. This arrangement substitutes the Swavalamban Yojana or NPS Lite scheme.

Atal Pension Yojana (APY) is available to those bank account holders who are not enrolled or taking benefits from any other social assistance programme. Any qualified person to obtain benefits under this scheme will have to provide proof of the Aadhaar number.

Stand-Up India Scheme

The Stand-up India initiative under Poverty Alleviation Programmes in India promotes scheduled castes, scheduled tribes, and women to start their own businesses. The Department of Financial Services under the Ministry of Finance, Government of India, is responsible for the structure’s security. The goal of this arrangement is to provide bank loans ranging from ten lakhs to one crore rupee to at least one ST or SC borrower and one woman beneficiary per bank branch for the establishment of a greenfield enterprise. This project might be in any industry, such as manufacturing, commerce, or service.

Stand up India
Stand Up India, GOI

The loan under this Poverty Alleviation Programmes in India should be granted if a person qualifies these following conditions:

  1. ST, SC, or woman businesspersons who are more than 18 years of age.
  2. Advances under the arrangement are obtainable only for a greenfield project. It means the first-time undertaking of the recipient in the trading, manufacturing, or services sector.
  3. In non-individual projects, at least 51 percent of the equity and monitoring stake should be captured by either an ST, SC, or Woman businessperson.
  4. The beneficiary should have defaulted to any financial institution or bank.

Size of Loan: Composite advance of 75% of the sanctioned project’s cost comprehensive of term credit and working capital. The condition of the credit being predictable to shelter 75% of the project cost will not apply if the beneficiary’s contribution along with convergence funding from any other arrangements exceeds 25 percent of the sanctioned project’s cost.

Interest Rate: It would be the bank’s minimum acceptable rate for that group (rated category) that did not exceed the standard rate (MCLR) plus 3 percent plus tenor premium.

Security: In addition to primary security, the advance may be secured by guaranteeing the Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) as decided by the banks.

Repayment: The advance should be paid back or returned within 7 years. A beneficiary can also avail freeze period of a maximum of 18 months.

Additional Reading

4 Empowering and Alluring Poverty Alleviation Programmes in India

5 Underused Poverty Alleviation Programmes in India

Poverty Simplified in Top 9 Points


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