“Government is committed to improving socio-economic status of street vendors through PM SVANidhi”

The pandemic impacted one and all but the urban poor were the worst affected. They lost their jobs and depended on financial assistance from governments and food supply from charitable institutions. Street vendors selling goods and providing services at our doorsteps suffered severely because of the lockdown restrictions. They spent whatever little saving they had to run their families and struggled to be back on their feet because of financial constraints. The Government of India took note of this and announced the Pradhan Mantri Street Vendor’s AatmaNirbhar Nidhi, or PM SVANidhi scheme, to help them with initial assistance with working capital to restart their businesses. To know more about the scheme, its nationwide implementation, how it transformed people’s lives and what are the long-term goals, Abhishek Pandey, Editor, Urban Update, interviewed Sanjay Kumar, Joint Secretary, Ministry of Housing and Urban Affairs
Excerpts from the interview…

It was impossible to conduct a fresh survey during the pandemic. So we allowed street vendors to submit their documents on the IT platform and mandated the ULBs to dispose of them within 15 days. So far, we have identified 25 lakh new street vendors, who were up till now untraceable”

Abhishek Pandey: Cities are vibrant places. Street vendors add colours to urban life and are an integral part of urban economies. Covid-19 has brought forward their vulnerabilities and concerns of their social security into focus. Government of India has made sincere efforts to empower them and provide them assistance required to run their day-to-day lives. PM SVANidhi is one scheme that focuses on their holistic development. Could you briefly explain how the scheme benefited street vendors?

Sanjay Kumar: You are right in saying that street vendors add colour to urban life because, in my opinion, there is no better sight than a bustling market with many street vendors. Vendors serve our day-to-day requirements at our doorsteps at affordable rates. However, when we talk of street vendors, we tend to visualise a vegetable or flower vendor. This is not the case as the street vending ecosystem is quite diverse. According to the Street Vendors Act 2014, any person conducting business at a roadside, or any public place, is considered a street vendor. PM SVANidhi Scheme covers an extensive range of occupations.
At the onset of the lockdown, the visuals of people walking to their native places became popular. As soon as the issue came to light, various ministries of the Government of India stepped into action and brought out many schemes for the urban poor. At MoHUA, we began looking into ways of helping the street vendors. We noticed that their access to formal lending institutions, say banks, was limited. Generally, they relied on taking loans from informal sources with interest rates as high as 6000 per cent. We noticed that their savings were exhausted in either getting their families back to their native places or simply running their families. There was an urgent need to assist them so that they could restart their businesses. This was the context in which the PM SVANidhi Scheme was introduced.
The scheme provides a blueprint for the street vendors to go up the economic ladder. In fact, under the scheme, the first tranche of the loan is 10,000. If repaid in time, the street vendor will be eligible for the second tranche of20,00. If this is repaid on time, the vendor becomes eligible for the third tranche of `50,000. The scheme’s main objective is to integrate street vendors into the formal urban economy and assist them in expanding their businesses. During implementation, umpteen vendors have expressed their gratitude that the government helped them restart their business.

AP: When the GoI envisioned the scheme, what challenges did you foresee in its implementation at such a large scale? How did you tackle them?

SK: When you deal with the urban poor, many challenges crop up. One is that our lending institutions are not designed to cater to them. They did not have adequate experience in dealing with this particular strata. After analysing the Mudra Shishu Loan scheme, under which loans of up to `50,000 are given, we observed that more than 90 per cent of the loans were in the upper end of the spectrum of the 0 to 50,000 group. In the case of loans of a smaller amount, say 10,000 or 20,000, there was no substantial contribution from the banks.
The main contributions to street vendors’ loans were from non-banking financial institutions (NBFCs) and microfinance institutions (MFIs). Our formal lending institutions were broadly unaware of the sector. The challenge was, therefore, in encouraging these formal institutions in lending to the street vendors. For that, we roped in the Department of Financial Services’ Reporting Department. We looked at the guarantee structure to determine what hinders the institutions in conducting business with the vendors, or primarily the urban poor. We noted that the government’s guarantee structure was inadequate, and we, therefore, decided to re-structure it.
The second challenge was rent-seeking. This happens every time the government introduces a new policy. To counter that, we designed an end-to-end IT system where no document is required. The applicant need not come to any government office. They can apply for a loan from any kiosk or can take the help of someone who knows how to use a computer or a laptop.
The third challenge was communication. According to information received by the officials, there was a possibility that this scheme might be viewed as a grants scheme instead of a loan scheme. This is, however, a loan scheme. The vendors have to repay the loan amount. We tried to communicate with the vendors through various channels like the state governments, media, social media etc.
The fourth challenge was in identifying who a street vendor is. Since the scheme is only available to street vendors, many people try to influence the system to become eligible. The challenge was to ensure proper documentation for street vendors. Following the Street Vendors Act 2014, urban local bodies are responsible for conducting surveys to identify street vendors. However, the overall quality of the survey varied. It was also impossible to conduct a fresh survey during the pandemic. So we allowed street vendors to submit their documents on the IT platform and mandated the ULBs to dispose of them within 15 days. So far, we have identified 25 lakh new street vendors, who were up till now untraceable.

AP:Since its launch in June 2020, the scheme has already sanctioned loans to over 23.5 lakh street vendors and disbursed loans to around 19.2 lakh out of 50 lakh targeted beneficiaries. The scheme seems to be on track and would likely benefit all as envisioned. What is the next step? How do you envision the long-term benefits of the scheme?

SK: The first benefit is that the street vendors must have access to formal credit facilities. I’m thankful to public sector banks for supporting this scheme and set the interest rate of the loans issued under the scheme between 10-12 per cent. This interest rate is not even 1/10th of the actual interest rates that the street vendors paid for when they took loans from the NBFCs or the MFIs. Secondly, we have also incentivised regular repayment. The government is providing an interest subsidy of 7 per cent on timely payment of the instalments.
Simultaneously, the government is also trying to create a credit trail for the vendors, helping build their credit score. We are giving incentives worth `1200 for digital transactions during the period of a loan.
We have also started the ‘SVANidhi se Samriddhi Scheme’ where the government conducts the socioeconomic profiling of street vendors and their families to facilitate access to various government welfare schemes under implementation post-2014. We have selected eight schemes which have been divided into three categories. The welfare schemes like that of Janani Suraksha Yojana, Matru Vandana Yojana, Jeevan Jyoti Bima Yojana and Suraksha Bima Yojana have received tremendous response from street vendors and their families. These schemes have witnessed the highest enrolment. Shram Yogi Maandhan Yojana, which will entitle beneficiaries from the unorganised sector to a steady pension, has been selected by the government to create a social security net around the street vendors.
The Street Vendors Act 2014 gives the role of administration of vending affairs to the street vendors themselves. There is a provision of a town vending committee where 40 per cent of the members are street vendors. Though this has been in place since 2014, the government is trying to strengthen this network and build their capacities to make decisions for their administration.

AP: India is in a phase where approximately 35 per cent of the population resides in cities. This number could increase significantly when the results of the next census are out. How important do you think is the role of the urban poor in India’s growth story?

SK: Any society is rated based on how the government treats the poor. Initially, India was termed as a ‘reluctant urbaniser’. However, as per the 2011 Census, our urban population was close to 38 crores. But, if we consider the peri-urban areas, which look like cities but have not been declared so by the respective state governments, the proportion of the urban population in India may very well cross 60 per cent.
The role of urban poor is vital because if we extrapolate the concept of national domestic product or state domestic product to the city-level and calculate the city domestic product, then the urban poor’s role is magnified. Our Hon’ble prime minister’s vision of making India a $5 trillion economy will never be fulfilled till we take care of our urban poor.
The main constituents of urban poor are migrants from rural areas or small towns who come to cities searching for employment and better opportunities. The government is already working on formulating a mechanism to handle migration. The government has commissioned many studies. We are also making sincere efforts to enable them to access our welfare schemes and convince state governments to extend their schemes’ benefits.
The Deendayal Antyodaya Yojana-National Urban Livelihoods Mission, which is being implemented since 2014 for the urban poor, has different components. One of them is skill development and placement. We train urban poor in market-oriented skills through the scheme and provide them opportunities to either join wage employment or set up their micro-enterprise.
As part of the scheme’s second component, we also organise our urban poor women into self-help groups (SHGs). So far, we have close to 60 lakh urban poor women across the country enrolled in SHGs, allowing them to access loans at affordable rates. The collective so formed also helps them raise their voice and demand for services for which they are eligible. The third component is concerned with providing shelters to the urban homeless. We have so far created shelters for close to one lakh urban homeless. The fourth component is, of course, street vendors. So, the Ministry is trying to help the urban poor, but it is ultimately the role of the state governments and the ULBs to take care of them as it is a state-subject. Nonetheless, the Ministry keeps issuing advisories and keeps conversing with state governments on how to make the lives of the urban poor better.

AP: You rightly said that the role of the urban poor in India in achieving the $5 trillion economy goal is essential. You are a qualified civil engineer from IIT and studied public management and governance at the London School of Economics (LSE). What is your outlook on India’s changing urban landscape? What should be the nation’s priorities?

SK: We have been taught from our childhood that India lives in villages. Soon, this narrative will change as a majority of our population will be living in urban areas. Since we know that this will happen, we need to prioritise and focus on a few things. The first is infrastructure in urban areas. We still cannot claim that all houses are covered with water supply or sewage system. Cities need loads of infrastructure to prepare for the migrants.
Urban governance is another aspect. In the implementation stage of the 74th Constitutional Amendment Act, many states and ULBs performed tremendously well. Some did not do so well, and a few others still need to be pulled up to improve their services. Unless urban governance is improved and every person living in the jurisdiction of a ULB is given a voice, planned development of any city is impossible. We must keep in mind that urban development should
not be an accident but be planned well in advance.
The third aspect is that we have to change our notion of judging cities based only on their infrastructure. We must realise that the cities, or even rural areas for that matter, are made up of people and must make the lives of the people better. We have so many schemes and so many Acts in the Indian Constitution. The only thing we need to do is ensure that the people that these schemes and Acts are formulated for can enjoy its benefits. I think this would be a great service to the people.

AP: Do you think ULBs are equipped well enough to handle this rapid urbanisation rate or do they need specialised training for that? How vital will be the role of local governments in achieving the targets of Sustainable Development Goals, New Urban Agenda, Paris Climate Accord? Are they prepared to take the challenges head-on?

SK:

ULBs have a role in mitigating climate change, but there are numerous other departments. However, they are not all under the jurisdiction of the ULBs. We have a multiplicity of organisations and departments working to make cities resilient. It was not the idea of the 74th Constitutional Amendment Act to have multiple departments working in the urban landscape. The time has come to hand over all the functions mentioned in the CAA to the ULBs. Of course, we need to engage the ULBs in capacity building. But as the saying goes, “The kind of responsibility you give to a person, they will exhibit similar talents.” Once you give the responsibilities to the ULBs, I am sure that they will be able to perform.
The central and the state governments will have to chip in to build their capacities.

(You can also watch this interview on YouTube Channel of Urban Update)