Page 362 - economic review

EMPLOYMENT334

Prime Minister’s Employment Generation Programme (PMEGP)

9.50 The PMEGP is a credit linked subsidy programme of the Government of India implemented
under the Ministry of Micro, Medium and Small Enterprises aimed at generating employment
opportunities through setting up of new self-employment ventures/projects/micro enterprises. The
State Directorate of the Khadi & Village Industries Commission (KVIC), State Khadi and Village
Industries Board (KVIB), District Industries Centres, (DICs) and Bankers are the agencies involved
for implementation in the State.

9.51 The Bank will sanction 90 per cent of the project cost in case of general category of beneficiary/
institution and 95 per cent in case of special category of the beneficiary/institution. Bank Finance of
capital expenditure will be in the form of Term Loan and Working Capital in the form of cash credit.
The amount of Bank Credit will be ranging between 60-75 per cent of the total project cost after
deducting 15-35 per cent of margin money (subsidy) and beneficiary contribution of 10 per cent from
general category and 5 per cent from special categories. During the year 2013-14 an amount of
2720.50 lakh was disbursed as margin Money for 1629 projects by various banks in Kerala.

State Schemes and the role of other Agencies

9.52 Various Departments of the State Government, Local Governments, agencies like Kudumbshree
are implementing schemes aimed at employment generation and skill development. The role of
Kudumbashree in poverty reduction, particularly among rural poor, is commendable. List of schemes
implemented by various State Government Departments with substantial outlay are presented in
Appendix 9.17. Most of the State schemes are found to be continuous in nature and not fulfilling
the overall demand of the modern society. Further these schemes are scattered in various sectors
with different Departments/ organisations acting as implementing agencies. Multiplicity of schemes
with different implementing agencies may create problems such as unawareness of schemes by
the potential beneficiaries. To address these issues a number of initiatives have been taken by the
Government recently, some of which are described in later parts.

Issues related to the Employment Situation in the State

9.53 The economy of Kerala has changed from one dominated by the Agriculture to one dominated
by the Service Sector over the years. Now the contribution of Service sector to the GSDP comes
to 70.9 per cent (2013-14). The changing structure of the economy itself necessitates appropriate
strategies in the labour market. There are several issues in the Employment sector in Kerala, which
needs to be addressed immediately. The important ones are summed up below:

Mismatch between demand and supply of labour

9.54 There exists a severe mismatch between the talents and skills required for various sectors and
skill-sets possessed by the population. This results in majority of the people being educated but
unemployed. For instance, there is labour shortage for manual work as well as for trained and skilled
personnel in emerging areas of employment. The shortage of demand in manual work is largely met
by the in-migrants from other States. In the case of technical fields there exists acute shortage of
skilled personnel. A mechanism will have to be put in place to assess the skill gap through various
processes at periodic intervals and to impart gap filling training so as to minimize the mismatch and
enable the job seekers to attain gainful employment.

Kerala State Planning Board