Economy & BudgetImportant2025-08-27

Cabinet Extends PM SVANidhi Scheme to 2030

In News

What Happened

In August 2025, the Union Cabinet approved the restructuring and extension of the PM SVANidhi scheme for street vendors until March 2030. The extension includes a new financial outlay of Rs 7,332 crore and expands coverage to include peri-urban areas and census towns. Additionally, the working capital loan limits were increased to provide greater credit access.

Why It Matters

This extension provides continued financial security to the unorganized sector, specifically street vendors, helping them sustain and expand their micro-businesses. By incentivizing digital payments and offering collateral-free credit, it aids in formalizing a massive segment of India's urban informal economy and protects vendors from exploitative moneylenders.

Background

History & Context

The PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) scheme was launched in June 2020 by the Ministry of Housing and Urban Affairs (MoHUA) as part of the Atmanirbhar Bharat Abhiyan. It was originally designed to provide emergency working capital loans to street vendors whose livelihoods were severely impacted by COVID-19 lockdowns. The scheme utilizes SIDBI as its implementing partner and uses an interest subvention mechanism to make credit affordable.

What Changed

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BEFORE: First tranche working capital loan limit was Rs 10,000. NOW: First tranche limit is increased to Rs 15,000.
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BEFORE: Second tranche loan limit was Rs 20,000. NOW: Second tranche limit is increased to Rs 25,000.
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BEFORE: The scheme's mandate was set to expire in December 2024. NOW: The scheme is extended for five more years until March 2030.
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BEFORE: Scheme coverage was largely focused on vendors within statutory Urban Local Bodies (ULBs). NOW: Coverage is formally expanded to include street vendors in peri-urban areas and census towns.

Prelims Angle

NCERT Connection

This connects to Class 10 Economics (Understanding Economic Development), specifically the chapter on 'Money and Credit'. PM SVANidhi serves as a real-world example of government intervention to provide formal sector credit (collateral-free microfinance) to informal workers who would otherwise depend on informal, high-interest lenders.

Practice Questions

Q1

Correct Statement(s)

Which of the following statements regarding the restructured PM SVANidhi scheme (extended to 2030) is/are correct? 1. The working capital loan limit for the first tranche has been increased to Rs 15,000. 2. The scheme's coverage is strictly restricted to statutory towns and excludes census towns.

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