Srinagar, May 12, KDC: Hundreds of unemployed youth and aspiring entrepreneurs who availed loans under the Prime Minister’s Employment Generation Programme (PMEGP) in Jammu and Kashmir are facing severe financial distress as subsidies promised under the scheme remain undispersed even after completion of their cases by December 2024.
According to Srinagar-based news gathering agency Kashmir Dot Com, despite assurances that funds would be released in the new financial year, beneficiaries are now being told that their applications will undergo additional verification through post offices, further delaying the process.
The PMEGP is a flagship credit-linked subsidy scheme implemented by the Khadi and Village Industries Commission (KVIC) to generate employment by setting up micro-enterprises in rural and urban areas. Under the scheme, beneficiaries can avail of loans up to ₹25 lakh for manufacturing units and ₹10 lakh for service units, with subsidies ranging from 15% to 35% depending on the category of the applicant (General, SC/ST/OBC, women, etc.).
Many beneficiaries who applied in 2021-22 were told their cases were approved and would be processed by December 2024. However, instead of receiving subsidies, they were asked to wait for the next financial year (2024-25). Now, authorities have introduced an additional layer of verification—physical confirmation via post offices—before disbursing the subsidy amount.
“I took a loan of ₹10 lakh to start a small garment unit. The bank is charging interest, but my subsidy has not come. Every month, I am paying ₹12,000 as EMI, and my business is struggling. If this continues, I will default,” said Sameer Ahmad, a beneficiary from Pulwama.
Another applicant, Nisar Ahmad from Anantnag, shared his ordeal: “I left my job to start a food processing unit under PMEGP. The officials kept saying ‘wait till March, wait till December.’ Now they say the post office will verify my address. How much longer?”
Since the subsidy amount reduces the loan liability, beneficiaries are forced to pay high EMIs on the full loan amount until the subsidy is credited. Many, already struggling with low revenues, fear slipping into debt traps.
“I took a ₹15 lakh loan for a handicraft unit. The subsidy of 25% (₹3.75 lakh) was supposed to reduce my burden, but without it, I am paying interest on the entire amount. The officials are not giving any clear timeline,” lamented Asif Iqbal, an artisan from Srinagar.
Beneficiaries argue that such verifications should have been done earlier. “Why approve the loan if they were not sure about our credentials? Now, after a year, they want post office verification. This is harassment,” said a group of applicants from Bandipora.
With no clear deadline, hundreds of PMEGP beneficiaries are left in uncertainty.
Meanwhile, financial experts warn that delays in subsidy disbursement could lead to increased NPAs (non-performing assets) for banks if borrowers default.
“The government must expedite the process or provide interim interest relief to these applicants. Otherwise, a scheme meant to boost entrepreneurship will push people deeper into debt,” said an economic analyst wishing not to be named.
As the wait continues, unemployed youth who pinned their hopes on PMEGP are left questioning whether the scheme’s delays will cost them their dreams—and their financial stability. (KDC)
