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MoU Under PM SVANidhi

  • 06 Oct 2020
  • 5 min read

Why in News

Recently, the Ministry of Housing and Urban Affairs (MoHUA) has entered into a Memorandum of Understanding (MoU) with Swiggy to onboard street food vendors on its e-commerce platform.

Key Points

  • The MoU will give the vendors online access to thousands of consumers and help them grow their businesses.
  • Aim:
    • To radically transform the business of street vendors across cities, by facilitating them to receive orders and serve customers using online mode of business.
      • It becomes important during the ongoing Covid-19 pandemic where physical distancing is the key to check it’s spread.
    • To empower street vendors with digital technology and facilitate greater income-earning opportunities through e-commerce platforms.
  • Phased Implementation:
    • In a first of its kind initiative, MoHUA and Swiggy will run a pilot program by on-boarding 250 vendors across five cities namely Ahmedabad, Chennai, Delhi, Indore, and Varanasi.
    • Upon the successful completion of the pilot, MoHUA and Swiggy plan to expand this initiative across the country in phases.
  • Key Stakeholders: MoHUA, Municipal Corporations, Food Safety and Standards Authority of India (FSSAI), Swiggy and Goods and Services Tax (GST) officials.
  • Assistance: The street vendors will be helped with Permanent Account Number (PAN) and FSSAI registration, training on technology/partner app usage, menu digitisation and pricing, hygiene and packaging best practices.

PM SVANidhi Scheme

  • It was announced as a part of the Economic Stimulus-II under the Atmanirbhar Bharat Abhiyan.
  • It has been implemented since 1st June 2020, for providing affordable working capital loan to street vendors to resume their livelihoods that have been adversely affected due to Covid-19 lockdowns, with a sanctioned budget of Rs. 700 crore.
  • Aims:
    • To benefit over 50 lakh street vendors who had been vending on or before 24th March 2020, in urban areas including those from surrounding peri-urban/rural areas.
    • To promote digital transactions through cash-back incentives up to an amount of Rs. 1,200 per annum.
  • Features:
    • The vendors can avail a working capital loan of up to Rs. 10,000, which is repayable in monthly instalments in the tenure of one year.
    • On timely/early repayment of the loan, an interest subsidy of 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on a quarterly basis.
    • There will be no penalty on early repayment of the loan. The vendors can avail the facility of the enhanced credit limit on timely/early repayment of the loan.
  • Recent Developments:
    • As of October 2020, over 20 lakh loan applications have been received under the scheme and out of these over 7.5 lakh loans have been sanctioned.
    • However, only 2 lakh applicants have received the money so far, with officials and applicants pointing to a number of hurdles that are slowing the process.
  • Challenges:
    • Several banks are seeking applications on stamp papers worth between Rs. 100 and Rs. 500.
    • There have also been instances of banks seeking PAN cards and even checking the CIBIL or Credit score of applicants or state authorities asking for voter ID cards, which many migrant vendors do not carry with them.
      • CIBIL score is an evaluation of one's credit history and determines their eligibility for a loan.
    • There have also been complaints of harassment by police and municipal officials.
  • Solutions:
    • States should be asked to ensure that street vendors are not harassed by the authorities as all they are asking is a right to livelihood.
    • The Centre has also decided to send the applications directly to bank branches listed by the applicant as a “preferred lender” or where the vendor holds a savings bank account.
    • A software has also been developed that can “push” around 3 lakh applications to the banks.

Source: PIB

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