UrbanizationGeneral Studies IISchemes


Ministry of Housing & Urban Affairs


22.7 lakh loans amounting to ₹2,243 crore have been disbursed to street vendors under SVANIDHI scheme

About PM SVANidhi:

  • The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) was launched by the Ministry of Housing and Urban Affairs
  • Scheme launched on June 01, 2020
  • It aim to provide affordable Working Capital loan to street vendors to resume their livelihoods that have been adversely affected due to Covid-19 lockdown.
  • The duration of the scheme is until March 2022.
  • The vendors can avail a working capital loan of up to Rs. 10,000.
  • It will be repayable in monthly instalments in the tenure of one year.
  • On timely/early repayment of the loan, an interest subsidy at 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on six monthly basis. 
  • There will be no penalty on early repayment of loan.
  • Over 50 lakh people, including vendors, hawkers, thelewalas, etc. are likely to benefit from this scheme.
  • Street vendors from peri- urban/ rural areas have become beneficiaries of an urban livelihood programme for the first time.
  • MFIs/ NBFCs/ SHG Banks have been allowed in a scheme for the urban poor due to their ground level presence for the first time.

Salient Features Of PM SVANidhi

  • It is a central sector scheme
  • It will provide affordable working capital loans to street vendors who are left affected by the novel coronavirus pandemic.
  • It will be implemented till March 2022.
  • Vendors will be provided with an initial working capital of up to Rs. 10000
  • A vendor will get an interest subsidy at 7 per cent at early or timely repayment of loans.
  • There is a provision of monthly cash-back incentive on digital payments.
    • Monthly cashback in the range of Rs. 50-100.
  • A vendor has the high probability to be eligible for a higher loan if he/she repays the first loan on time.
  • A vendor does not have to provide any collateral security to access the loan.

Objectives Of PM SVANidhi

  • To give vendors access to affordable working capital loans which can help them to resume their livelihood activities post-countrywide lockdown (due to the pandemic.)
  • To incentivize regular repayment of loans by provisions like cash-back, higher loans on subsequent demands etc.
  • To promote digitalization by rewarding vendors who opt for digital repayments of loans.

Why was this scheme rolled out?

  • The COVID-19 pandemic and the nationwide lockdown left daily wage workers and street vendors out of work. The scheme aims at aiding the vendors at getting back on their feet financially. In the long term, it aims at establishing a credit score for the vendors as well as creating a digital record of their socio-economic status, so that they can avail the Central government schemes later. The scheme also attempts to formalise the informal sector of the economy and provide them safety nets and a means of availing loans in the future.
  • Many vendors belong to what we call the informal economy, and often borrow from private lenders which charge them exorbitant rates of interest. This loan charges below 12% rate of interest, and creates a credit score of the vendors, so that if they repay the loan on time, they can avail more. Moreover, by creating a digital record of them and their socio-economic profile, it will help them avail various other 8-9 central government schemes which provide a form of a safety net, helping in their poverty alleviation.

vendors eligibility for the loan

  • All vendors who have been vending from or before March 24, 2020 and with a certificate of vending can avail the loan.
  • As per the Street Vendors Act of 2014, the Town Vending Committees (which comprises the local authorities and vendors from an area) issue a certificate of vending after a survey has been conducted of all the vendors.
  • But since many states and cities have not conducted the survey yet, many vendors are unable to provide any such certificate of vending. Instead, as per the scheme, the urban local bodies – in this case, the municipalities – shall provide a Letter of Recommendation for every vendor who wishes to avail the loan.
  • Survey is not required for this scheme. The ULBs can issue an LOR, or if the vendor is a member of a vendor association, he or she can apply. Requirements for an LOR vary, with many ULBs asking for any proof of vending, including even a photo of a vendor at the spot.
  • These documents, including the identification proof, are uploaded on a special portal made for the scheme, and the loans are sanctioned by banks and disbursed, ideally, in 10-15 days.

The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2012

Highlights of the Bill

  • The Bill aims to protect the livelihood rights of street vendors as well as regulate street vending through demarcation of vending zones, conditions for and restrictions on street vending.
  • Any person intending to undertake street vending needs to register with the Town Vending Committee (TVC).  He may then apply for a vending certificate that will be issued based on various criteria.  
  • The state government shall frame a scheme for street vendors.  The local authority shall, in consultation with the planning authority, frame a street vending plan once every five years.
  • The TVC comprises of the municipal commissioner, representatives of street vendors, local authority, planning authority, local police, resident welfare association and other traders associations. 
  • This Bill shall not apply to Railways land, premises and trains.

Key Issues and Analysis

  • Currently, street vending is regulated under municipal laws enacted by state legislatures. Parliament’s competence to legislate on this issue depends on whether the Bill is interpreted as substantively addressing rights and obligations of street vendors (Concurrent List) or relating to municipal zoning (State List). 
  • The Bill does not specify principles to be followed by governments in issuing vending certificates, allocating vending zones and the number of vendors per zone.  Absence of such norms could defeat the purpose of enacting a law to ensure uniformity in the legal framework. 
  • The Bill does not require the stakeholders to be consulted in the formulation of the street vending plan.  This could lead to a lack of safeguards in ensuring that plan is determined in a fair manner.  
  • The central law will have overriding effect on state laws that are inconsistent with the Bill.  Current state laws differ with the Bill in terms of powers of the TVC, and mechanism for dispute resolution.
  • The Standing Committee suggests making the Bill applicable to the Railways, incorporating specific provisions of the scheme in the Bill, and consultation with the TVC on the vending plan.

Town Vending Committee

The act provides for the creation of a Town Vending Committee (TVC) in each Local Authority. This TVC is envisaged as the central authority implementing the provisions of the bill. The Town Vending Committee will be headed by Municipal Commissioner or Chief Executive Officer as chairperson. It will have other members as decided by the state government, representing the local authority, medical officer, planning authority, traffic police, NGOs etc. along with street vendors market associations. Here we not that at least 10% to be from non-governmental organizations, and at least 40% members will be members representing the street vendors, to be selected through election, of which one-third shall be women. The act makes provisions for due representation to SCs, STs, Minorities, OBCs and Persons with disabilities.

Street Vendors Survey

The Town Vending Committee will conduct a survey of all existing street vendors, within the area under its jurisdiction. It has also been mandated to carry out such survey in at least five years subsequently. Every street vendor, identified under the survey will be issued a certificate of vending (license) by the Town Vending Committee. This certificate would allow the vendors to carry out their business activities legally. The entire process of carrying out a survey before handing out licenses is to prevent arbitrary number of licenses being issued, which is the case in most cities as of now.

Vending Zones

A maximum of 2.5% of the total population of a ward or town or city will be given licenses for street vending. All vending activity will be carried out in the vending zones. In cases where the number of identified street vendors is more than the available licenses in a particular vending zone, licenses will be given on the basis of draws or lottery. The remaining vendors will be given licenses in any adjoining vending zone.  

Source: PIB

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