One Year of PM SVANidhi

The PM SVANidhi, a micro-credit scheme of the Central Government, was largely touted as an emergency relief measure for street vendors who had suffered immense financial distress during the lockdown ensuing from the pandemic.


Naresh, a street vendor from the Anand Vihar area of Delhi applied for a Letter of Recommendation (henceforth LOR) from the relevant municipal corporation in December 2020. This letter was supposed to help him avail a loan of INR 10,000 under the PM SVANidhi scheme. However, upon receiving his LOR, he saw false information in the letter. Where he had written ‘fixed’ vendor and the exact address of his almost 20 year old stall, the letter said that Naresh was a ‘mobile’ vendor situated in the ‘NDMC area’. The letter of recommendation within the PM SVANidhi scheme facilitates the loan application while also providing proof of vending. Naresh was skeptical of applying for the loan with the false letter of recommendation because in the larger scheme of things, he said it undermined the security of his livelihood. He also reports that he knows many more vendors who have got similar erroneous LORs. This is the story of the PM SVANidhi scheme in its first year of existence.

According to a recent survey report conducted by Indo Global Social Service Society, the first year of the PM SVANidhi scheme has been rife with issues of implementation and has had a limited impact on the most vulnerable street vendors in most cities. This survey included more than 1600 respondents from 15 cities spanning 9 states. The survey was conducted just before the advent of the 2nd wave of the pandemic which has augmented the financial and livelihood crisis for street vendors.This study presents the situation on the ground for the most vulnerable street vendors in the context of the PM SVANidhi scheme.

62% of all respondents have never been surveyed in the mandated street vendor survey. This survey awards vendors identity documents that if furnished would help their loan application.

Only 25% of all respondents have some form of identification i.e. Vendor Certificates/Vendor ID Card/Survey Slip. In most cases, the respondents had temporary survey slips or hawker union member cards but not the certificates of vending granted by the municipal corporation and TVC after a survey.

40% of respondents were not aware of the PM SVANidhi loan scheme.

65% of respondents reported facing harassment or eviction from their place of work since June 2020, after the PM SVANidhi scheme was announced and 2 months after the Ministry of Housing and Urban Affairs declared street vendors ‘essential service providers’ during the pandemic.

51% of all respondents have not applied for a loan under the PM SVANidhi scheme. Not being able to repay the loan, not receiving any help in the application process, unaware of eligibility for the scheme and not knowing where or how to apply for the loan were the major reasons behind this.

85% of those who have applied for the loan scheme, do not have an LOR (Letter of Recommendation) from their local municipal corporation, which is an important document that facilitates availing the loan. The bulk of the respondents were vendors from the most vulnerable C and D categories under the scheme (not possessing certificates of vending).

Only 11% of the respondents have received loans under the PM SVANidhi loan scheme.

These findings are from bigger cities, state capitals where there is a sizeable presence of NGOs, civil society organisations and Hawker Unions to guide, organise and assist street vendors to avail schemes such as these. The situation in smaller cities remains to be seen.

The loan scheme was announced as a welfare measure however it is hardly secured. With a government financial guarantee of only 15%, the financial risks of the Svanidhi scheme falls squarely on the banks. Banks are therefore extremely hesitant to provide loans to vulnerable vendors without documentation. There have been reports from Ranchi where street vendors who was awarded an LOR from the municipal corporation were told by the bank to furnish unnecessary documents such as husbands ID (if they were female), relatives’ address, village addresses and other such unnecessary documents. Clearly designed to frustrate vendors, many turned away from the loan. In Udaipur, a group of vendors were evicted right before the municipal corporation started issuing LORs. Their names were struck off the survey list before they could approach the corporation or banks. Many of them answered saying ‘we don’t need the loan when we don’t even have a place to sell our wares’.

What is the PM SVANIDHI Scheme?
The PM SVANidhi scheme is a landmark government micro-credit scheme meant exclusively for street vendors. The scheme was officially launched on July 2nd. Beneficiaries are defined as “hawkers, thelewala, rehriwala who supply vegetables, fruits, street food, tea, pakodas, bread, eggs, apparel, footwear, artisan products, books/stationery, etc. The services include barbershops, cobblers, pan shops, laundry in different areas and contexts”. This scheme provides INR 10,000 as a loan with a repayment period at regular intervals over a year. Timely repayment can lead cash back offers.

This scheme was largely touted as an emergency relief measure for street vendors who had suffered immense financial distress during the lockdown ensuing from the pandemic. All street vendors are daily wage earners and the pandemic is acutely affecting their livelihood and access to resources. Their daily transactions involve busy markets and hand to hand transactions which have been decimated due to the lockdown. Restricted mobility in cities meant that the city’s vendors immediately lost their source of income and were faced with enormous financial stress.

What is the Economic Contribution of Hawkers?
Street vendors in India constitute the bulk of the informal sector workforce in urban areas. It is estimated that there are more than 2
crore street vendors in the entire country, while the Svanidhi Yojana was launched for only upto 50 lakh vendors. Street vendors represent 4% of the urban workforce across India and play a variety of roles in city life. The vending economy approximately has a parallel turnover of Rs 80 crore a day and every street entrepreneur or trader supports an average of three others as employees or partners or workers on commission.

In the current lockdown due to the second wave, a few state governments (for eg. Karnataka, Maharashtra and Madhya Pradesh) have announced cash relief measures specifically for street vendors ranging from 1000-2000 rupees as a one time cash transfer. However, these relief measures are restricted to vendors who are registered beneficiaries of the SVANidhi scheme, which as the survey report shows, most vulnerable vendors are not.

The responses of state and local administrations have still been harsh with vendors. There have been reports of undue restrictions and heavy fines imposed. After the brief return to pre-lockdown levels of customers in January of 2021, the second wave has spelt disaster for street vendors all over the country. After a year of the initial lockdown, most food, garment and plastic goods hawkers could not restart their businesses at all, causing financial distress to rise. The current situation and the impending danger of a 3rd wave of the pandemic makes their futures look bleak.

Shaktiman Ghosh, All India General Secretary of the National Hawker Federation and a veteran of street vendor issues recommends simple modifications to the Svanidhi scheme which must be considered seeing the realities of the pandemic and the fear of a 3rd wave.

PM SVANidhi scheme should be permanent: The Svanidhi scheme was introduced as a measure to be adopted during a crisis for the large population of street vendors. The approach being – one time year long access to credit and immediate repayment in order to tide over the woes of the pandemic. This approach needs to be modified, and the Svanidhi scheme should be reimagined as a developmental scheme for the ultra micro industries (street vendors). This scheme should be a permanent government scheme for street vendors to access credit from the formal banking system.

Provision of LORs to all vendors, not just documented: The categorisation of vendors as A, B, C and D categories has resulted in the C and D categories of vendors being left out of the credit scheme. These vendors, who are less likely to have been surveyed, and do not possess a vending certificate from the ULB require an LOR. These vendors are completely dependant on the municipal corporations who were supposed to have conducted surveys and registered them. The report indicates that local governments have greatly hindered the progress of the scheme in its inaugural year. Local governments must be more proactive in providing LORs to all eligible vendors.

Inclusion of All India Vendor Representatives in Monitoring Committees: Section 19 of the SVANidhi guidelines (which establishes monitoring committees at the central, state and local level to assess the progress of the scheme within their jurisdiction) should be modified to include representatives from the All India Hawker/Vendor Organisations in these monitoring committees. If these organisations were involved in the conception of the scheme, they should be included in the operations.

Local administrations should operate according to Street Vendors Act: Primacy should be awarded to the Street Vendors Act 2014. To get rid of widespread evictions and harassment of vendors the scheme must be seen and implemented within the context of the Act. Guidelines for the administration should reflect the rules of the Street Vendors Act which ensures harassment-free operations for vendors until they are surveyed and documented.

Adrian Dcruz is working as a Programme Officer at Indo Global Social Service Society, a non-profit organisation in Delhli, closely working on issues of street vendors and urban housing.