Too many schemes

Isn’t ‘barefoot entrepreneurship’ initiative overlapping MUDRA?

SAJAD BAZAZ
Srinagar, Publish Date: Nov 14 2017 11:41PM | Updated Date: Nov 14 2017 11:41PM
Too many schemes

Financial architecture of India has remained a hot subject of debate for planners, commentators and experts in the field. Tremendous fall out of events since 2014 has been sweeping the financial system of the country. The makeover of the system taking place is basically an interesting tale which tells more about the plight of a common man than narrating any substantial prosperity stories. National Democratic Alliance (NDA) government lead by ‘charismatic’ prime minister Narendra Modi engaged itself in first demolishing the financial architecture of the country and then rebuilding it in its own style. This ‘renewed’ financial architecture was kick-started when the government launched mega financial inclusion programme through Jan Dhan Yojana immediately taking the reign of power at the centre. Later, many decades’ old financial initiatives were carried forward only after re-tailoring them under new nomenclature. However, all such demolition and specific reconstruction was (and is being) carried under the banner of generating employment opportunities for the unemployed among other things.

Whatever the political agenda behind all this revamping of financial system in the country, the ground situation only indicates a sort of mess in financial schemes, breeding fear psychosis even in ordinary citizen’s domain. Most interestingly, those with money fear of losing it to the sweeping changes made (still being carried out) in the system  and those having a little bit of it or struggling to find an appropriate means to support their living too fear to enter into the formal financial system.  First the scrutiny and then the surveillance of every financial transaction or any sale/purchase is today a major concern for common citizens. This situation has given them a sense of choking as, precisely, a notion is strongly building up that common man’s assets are not safe in the fast changing financial architecture.

The situation is so confusing. What will brew up when on one hand schemes for skill development are pushed as the only solution to generate employment avenues and negotiate the problem of employability. On the other, the government has strongly pitched MUDRA Yojana to transform small enterprises.

As far as skill development mission is concerned, we have a scenario where growing unemployment scenario is attributed to the lack of skilled force. It is a paradox in the economy that we have witnessed a widening mismatch between job openings and the skills of those looking for job. Basically, there are some major areas in our economy where huge potential has remained unexplored and skilled work force is required to bring those fortunes into our economy.  In such a skill-deficit scenario, skill development schemes were pushed to bridge the gap between employment opportunities and skilled but unemployed youth. 

Keeping general rules apart, these small businesses have time and again been working as partners - a way of working between people that makes a difference differently. Precisely, it’s this small enterprises’ sector which has kept the economy afloat to a large extent. In other words, the biggest economic strength is in hugely spread small enterprises - small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, food-service units, repair shops, small industries, artisans, food processors, horticulture activities and others, in rural and urban areas.

In the changing financial architecture the latest initiative in the series is MUDRA (Micro Units Development & Refinance Agency) Yojana which was forcefully promoted across country just in last month. The scheme is aimed to explore the potential of huge untapped economy scattered in the small enterprise sector through formal means of finance from banks and other financial institutions. The loans under the scheme range from Rs.50,000 to Rs. 10 lakhs, that too, without any collateral security.

So far so good. Aiming to create massive job opportunities by through skill development initiatives and strengthening the hugely spread small enterprises through mega MUDRA programme is a welcome step. Now what’s confusing is that a mission of ‘barefoot entrepreneurs’ is on cards. If reports are to be believed, the central government in the name of creating jobs, is planning to reach out small enterprises through “barefoot entrepreneurship initiative”. The plan envisages to train, mentor and equip ‘barefoot entrepreneurs’ largely in the informal economy and bring them into the fold of formal economy.

‘Barefoot entrepreneurs’ are those engaged in businesses ranging from kirana stores to tailoring shops, from roadside vendors to small business owners engaged in sundry services in smaller towns and subdivisions.

The new plan comes at a time when MUDRA Yojana has been strongly pitched to transform ‘barefoot entrepreneurs’. The new approach challenges success of MUDRA. Has MUDRA failed in its infancy stage alone? Or, is it a gimmick to exploit the potential of small enterprises’ sector for meeting their own  political ends? At the moment, ‘bearfoot entrepreneurship initiative’ would be an overdose.

(The views are of the author and not that of the institution he works for)