PM SVANidhi Scheme – A Comprehensive Guide for UPSC/JKAS Aspirants

By / August 10, 2025

Introduction: PM SVANidhi Scheme
The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi Scheme) scheme, launched by the Government of India in June 2020, is a flagship initiative aimed at empowering street vendors by providing them with affordable working capital loans. Designed in the wake of the COVID-19 pandemic, the scheme seeks to revive the livelihoods of millions engaged in the urban informal economy, ensuring financial inclusion and digital empowerment.

For UPSC and JKAS aspirants, PM SVANidhi is not just a government scheme to memorize—it is a rich case study in urban governance, social welfare, and inclusive growth. Understanding its objectives, features, and implementation mechanisms is crucial for tackling both Prelims (facts and figures) and Mains (analytical questions on poverty alleviation, urban economy, and government policy).

Background and Need for the Scheme

Street vendors are a vital part of India’s urban informal economy, providing affordable goods and services to millions of citizens. According to the Ministry of Housing and Urban Affairs (MoHUA), India has over 50 lakh street vendors, with a majority operating without formal credit access.

Before PM SVANidhi, these vendors relied heavily on informal moneylenders, often paying exorbitant interest rates. The COVID-19 lockdowns severely disrupted their daily income, pushing many into debt and poverty. There was a pressing need for a structured credit facility that:

  • Provided collateral-free loans.
  • Encouraged digital transactions.
  • Integrated vendors into the formal financial system.

PM SVANidhi was thus conceptualized as part of the AtmaNirbhar Bharat Abhiyan, focusing on financial empowerment, urban livelihood restoration, and promoting self-reliance among the most vulnerable sections of society.

Urban Informal Economy and Street Vendors in India

The urban informal economy in India consists of small-scale, unorganized activities that operate outside formal regulatory frameworks. Street vendors form a significant segment of this economy, selling vegetables, fruits, garments, snacks, and a variety of essential items.

According to the National Policy on Urban Street Vendors (2009), street vending is not just a survival activity but a crucial element of urban culture and economy. It ensures:

  • Affordable access to goods for urban residents.
  • Employment opportunities for unskilled and semi-skilled workers.
  • Local economic circulation, keeping money within communities.

However, street vendors often face challenges such as:

  • Lack of legal vending spaces and frequent evictions.
  • Absence of formal credit facilities.
  • Vulnerability to exploitation by middlemen and local authorities.

In this context, PM SVANidhi addresses the credit gap while also promoting digital inclusion and recognition of street vending as a legitimate economic activity.

Challenges Faced by Street Vendors Before PM SVANidhi

Before the launch of PM SVANidhi, street vendors operated in a cycle of uncertainty and financial insecurity. Their major challenges included:

  1. Limited Access to Credit
    • Most vendors lacked formal bank accounts or credit history.
    • They were dependent on informal moneylenders who charged interest rates as high as 200–300% annually.
  2. Legal and Regulatory Issues
    • Many operated without valid vending licenses.
    • Frequent evictions and confiscation of goods were common in cities.
  3. Income Instability
    • Earnings were heavily dependent on daily footfall.
    • Seasonal changes, bad weather, and market fluctuations often reduced their sales drastically.
  4. Digital Exclusion
    • Limited awareness and infrastructure for digital payments meant they could not tap into cashless transactions, reducing customer convenience.
  5. Impact of COVID-19
    • Nationwide lockdowns halted operations, leading to zero income for weeks.
    • Even after restrictions eased, customer confidence and spending remained low.

These issues created a cycle of poverty and exclusion for vendors, which PM SVANidhi aims to break by offering collateral-free loans, financial literacy, and digital empowerment.

Objectives of the PM SVANidhi Scheme

The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme was launched with the vision of empowering street vendors and integrating them into the formal financial system. Its primary objectives are:

  1. Provide Affordable Working Capital Loans
    • Offer collateral-free loans starting at ₹10,000 for one year to help vendors restart and expand their businesses post-pandemic.
  2. Promote Financial Inclusion
    • Link vendors to formal banking channels, enabling them to build credit history for future borrowing.
  3. Encourage Digital Transactions
    • Incentivize the adoption of UPI and digital payment systems through cashback rewards, promoting cashless economy goals.
  4. Support Incremental Lending
    • Allow vendors who repay on time to access higher loan amounts in subsequent cycles (₹20,000 and ₹50,000).
  5. Boost Livelihood Security
    • Ensure vendors have stable working capital to withstand economic shocks, thereby reducing vulnerability.
  6. Recognition and Integration
    • Facilitate the formal identification of street vendors through a Letter of Recommendation (LoR) from Urban Local Bodies, bringing them into official records.

For UPSC/JKAS aspirants, this scheme is a clear example of inclusive governance and targeted welfare delivery, making it relevant for topics in Polity, Economy, and Social Issues.

Launch Date and Implementing Agency

The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme was officially launched on June 1, 2020, as part of the AtmaNirbhar Bharat Abhiyan.

Implementing Ministry:

  • The scheme is implemented by the Ministry of Housing and Urban Affairs (MoHUA), Government of India.

Nodal Agency for Execution:

  • Small Industries Development Bank of India (SIDBI) is the key partner responsible for operational guidelines, lending facilitation, and monitoring of progress.

Target Beneficiaries:

  • Urban street vendors across all statutory towns as per the 2011 Census and towns notified subsequently.
  • Includes vendors in surrounding peri-urban and rural areas under certain conditions.

Implementation Partners:

  • Urban Local Bodies (ULBs) – identify and verify street vendors.
  • Lending Institutions – Scheduled Commercial Banks, Regional Rural Banks, Small Finance Banks, Cooperative Banks, and Non-Banking Financial Companies (NBFCs).

This multi-agency approach ensures that policy decisions, financial facilitation, and grassroots-level beneficiary identification happen in a coordinated and transparent manner.

Key Features of the Scheme

The PM SVANidhi Scheme has been designed with flexible yet targeted features to support street vendors’ recovery and growth. The core features include:

1. Collateral-Free Working Capital Loans

  • Initial loan of ₹10,000 for a tenure of 12 months.
  • Subsequent loan cycles offer ₹20,000 and ₹50,000, provided earlier loans are repaid on time.

2. Interest Subsidy Benefit

  • 7% annual interest subsidy directly credited to the beneficiary’s bank account on timely repayment.
  • Subsidy calculated on a quarterly basis.

3. Digital Transaction Incentives

  • Cashback incentives of up to ₹1,200 per year for promoting UPI and QR-based transactions.
  • Encourages digital literacy and reduces dependency on cash.

4. No Penalty for Early Repayment

  • Vendors can repay loans before the due date without any additional charges.

5. Flexible Eligibility

  • Includes identified vendors, those with vending certificates, and even vendors without prior documentation who can secure a Letter of Recommendation (LoR) from ULBs.

6. Inclusive Coverage

  • Applicable in all urban areas across India, covering millions of street vendors from diverse trades.

These features make PM SVANidhi more than just a loan program—it is a livelihood restoration initiative that combines credit access, financial inclusion, and digital empowerment.

Eligibility Criteria

To ensure that the PM SVANidhi Scheme reaches the intended beneficiaries, the government has laid out clear eligibility conditions:

1. Target Beneficiaries

  • All street vendors engaged in vending in urban areas as of March 24, 2020.
  • Includes vendors selling goods or services in markets, footpaths, pavements, and other public spaces.

2. Documentation Requirements

  • Certificate of Vending or Identity Card issued by the Urban Local Body (ULB).
  • Vendors without these documents can obtain a Letter of Recommendation (LoR) from ULBs or Town Vending Committees.

3. Coverage of Areas

  • All statutory towns under the 2011 Census and towns notified later.
  • Peri-urban and rural vendors can apply if they operate in urban areas.

4. Loan Eligibility

  • Must not have defaulted on previous loans from banks or NBFCs.
  • Must have a functional savings bank account linked with Aadhaar.

5. Special Considerations

  • Migrant vendors are also eligible if verified by ULBs.
  • Both stationary and mobile vendors are covered.

This inclusive approach ensures that even those without formal recognition can enter the formal credit ecosystem, promoting financial and social security for street vendors.

Loan Amounts and Tenure

The PM SVANidhi Scheme offers a progressive loan structure to encourage timely repayment and business growth for street vendors.

1. First Loan Cycle

  • Amount: ₹10,000 working capital loan.
  • Tenure: 12 months.
  • Repayment Mode: Monthly or as agreed with the lending institution.

2. Second Loan Cycle

  • Amount: ₹20,000.
  • Eligibility: Available to vendors who repay the first loan on time and maintain a good credit record.
  • Tenure: 12 months.

3. Third Loan Cycle

  • Amount: ₹50,000.
  • Eligibility: Granted to vendors with consistent repayment history in the previous two loan cycles.
  • Tenure: 12 months.

4. Repayment Flexibility

  • No prepayment penalty – Vendors can repay early without extra charges.
  • Loan installments can be made via digital transactions to earn cashback incentives.

5. Purpose of Loan

  • Meant for working capital needs like purchasing raw materials, restocking goods, or upgrading vending infrastructure.

This structured approach motivates street vendors to maintain financial discipline while gradually increasing their credit access for long-term stability.

Interest Subsidy and Incentives

One of the most attractive aspects of the PM SVANidhi Scheme is the financial relief it offers through interest subsidies and performance-based incentives.

1. Interest Subsidy

  • Beneficiaries receive a 7% annual interest subsidy on the loan amount.
  • The subsidy is credited directly to the vendor’s bank account quarterly.
  • Example: If a vendor takes a ₹10,000 loan at 12% interest, they effectively pay only 5% after subsidy.

2. Digital Transaction Cashback

  • To promote cashless payments, vendors earn cashback for using UPI, QR codes, and digital wallets.
  • Cashback Rates:
    • ₹50 per month for 50 digital transactions.
    • ₹75 per month for 100 transactions.
    • ₹100 per month for 200 or more transactions.
  • Annual incentive can go up to ₹1,200.

3. Benefits of Incentives

  • Reduces effective interest burden.
  • Encourages adoption of digital payment infrastructure.
  • Builds a documented transaction history, which helps vendors secure larger loans in the future.

Through these benefits, PM SVANidhi not only provides affordable credit but also nudges street vendors towards financial literacy and digital inclusion—key goals in India’s journey towards a less-cash economy.

Digital Transaction Incentives

A key innovation under the PM SVANidhi Scheme is the push towards a digitally empowered street vending sector. The government rewards vendors who adopt cashless payment systems, ensuring both convenience and transparency.

1. Purpose of Digital Incentives

  • Encourage financial inclusion by bringing vendors into the digital economy.
  • Reduce dependency on cash transactions, making businesses more resilient and customer-friendly.
  • Build a verifiable transaction history to support future credit applications.

2. Incentive Structure

  • Vendors using UPI, QR codes, or digital wallets are eligible for cashback every month.
  • Slab-wise Cashback:
    • ₹50/month for 50 digital transactions.
    • ₹75/month for 100 transactions.
    • ₹100/month for 200 or more transactions.
  • Maximum annual incentive: ₹1,200.

3. Long-Term Benefits for Vendors

  • Attracts tech-savvy customers who prefer cashless payments.
  • Reduces theft risks by minimizing cash handling.
  • Helps vendors become creditworthy borrowers by recording consistent digital income.

By integrating financial support with technology adoption, PM SVANidhi aligns with India’s broader goals of Digital India and a less-cash economy.

Role of Urban Local Bodies (ULBs)

Urban Local Bodies play a central role in the successful implementation of the PM SVANidhi Scheme. Their responsibilities extend beyond just verifying beneficiaries—they act as the link between street vendors and the formal banking system.

1. Identification and Verification of Vendors

  • Maintain and update the Street Vendor Database.
  • Issue Certificates of Vending or Letters of Recommendation (LoR) to eligible vendors, including those without prior documentation.

2. Facilitation of Loan Applications

  • Assist vendors in filling loan forms and ensuring documents are complete.
  • Forward verified applications to lending institutions for processing.

3. Awareness and Outreach

  • Conduct awareness drives in markets, weekly haats, and vending zones to inform vendors about the scheme.
  • Use posters, community meetings, and local announcements to spread information.

4. Monitoring and Support

  • Track the progress of loan disbursement and repayment status.
  • Provide grievance redressal support for vendors facing delays or issues with banks.

5. Promotion of Digital Transactions

  • Collaborate with payment service providers to install QR codes and train vendors in using digital payment apps.
  • Encourage participation in the cashback incentive program under PM SVANidhi.

By playing these roles, ULBs ensure that PM SVANidhi is inclusive, transparent, and efficient, directly contributing to the economic empowerment of street vendors.

Funding Pattern and Financial Outlay

The PM SVANidhi Scheme is structured to provide financial support while ensuring minimal fiscal burden on street vendors. Its funding pattern combines central assistance, lending institution participation, and interest subsidy mechanisms.

1. Central Government Allocation

  • Implemented as a Central Sector Scheme, meaning 100% funding comes from the Government of India.
  • Initial allocation for the scheme’s launch phase was around ₹700 crore, with provisions for expansion based on demand.

2. Role of Lending Institutions

  • The working capital loans are extended by Scheduled Commercial Banks, Regional Rural Banks, Small Finance Banks, Cooperative Banks, and NBFCs.
  • These institutions bear the credit risk, backed by government interest subsidy and credit guarantee mechanisms.

3. Interest Subsidy Expenditure

  • The 7% interest subsidy is fully funded by the Central Government.
  • Disbursed quarterly directly to beneficiaries via Direct Benefit Transfer (DBT).

4. Credit Guarantee Support

  • Loans under PM SVANidhi are covered by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), reducing risk for lenders.

5. Progressive Lending Model

  • The outlay accounts for incremental lending cycles—₹10,000 (first cycle), ₹20,000 (second), ₹50,000 (third).
  • Encourages timely repayment and promotes credit discipline among vendors.

This funding structure ensures the scheme is financially sustainable, scalable across urban India, and attractive for both borrowers and lenders.

Achievements and Progress So Far

Since its launch in June 2020, the PM SVANidhi Scheme has made remarkable progress in extending formal credit and promoting financial inclusion among street vendors.

1. Beneficiaries Reached

  • As of recent government data, over 40 lakh street vendors have benefited from the scheme across India.
  • Coverage includes vendors in metropolitan cities, small towns, and peri-urban areas.

2. Loan Disbursement Statistics

  • First Loan Cycle (₹10,000): The majority of beneficiaries have successfully availed this initial working capital.
  • Second Loan Cycle (₹20,000): A significant number of vendors have upgraded after timely repayment.
  • Third Loan Cycle (₹50,000): Currently in the rollout stage for vendors with consistent repayment records.

3. Digital Payment Adoption

  • Over 25 lakh vendors have adopted UPI/QR code payments.
  • Substantial growth in monthly cashback disbursements under the digital incentive program.

4. Women and Marginalized Beneficiaries

  • High participation from women vendors and those belonging to Scheduled Castes, Scheduled Tribes, and OBC communities, showcasing the scheme’s inclusivity.

5. State-Level Performance

  • States like Uttar Pradesh, Madhya Pradesh, and Telangana lead in loan disbursements.
  • North-Eastern states have also shown rapid adoption in recent months.

These achievements highlight PM SVANidhi’s role as not just a credit program, but as a social empowerment initiative reshaping the street vending sector.

Challenges and Criticism of the Scheme

While PM SVANidhi has achieved notable success, certain challenges and criticisms highlight areas where the scheme’s implementation could improve.

1. Low Awareness Among Vendors

  • Many street vendors, especially in smaller towns, are unaware of the scheme or unsure about the application process.
  • Limited outreach campaigns in regional languages reduce accessibility.

2. Documentation and Verification Delays

  • Vendors without a Certificate of Vending or proper ID face delays in getting the Letter of Recommendation (LoR) from Urban Local Bodies.
  • Bureaucratic procedures can discourage applicants.

3. Digital Divide

  • Not all vendors are comfortable with digital transactions, especially older or less-educated vendors.
  • Lack of smartphones or stable internet hinders adoption of cashless payment incentives.

4. Limited Loan Amounts

  • The initial ₹10,000 loan, though helpful, may be insufficient for vendors with higher operational costs.
  • Inflation and rising supply costs reduce the impact of the credit provided.

5. Regional Disparities in Implementation

  • Some states have been more proactive than others, leading to uneven benefits across the country.
  • Urban areas with better ULB capacity show faster uptake than smaller municipalities.

Addressing these issues through simplified processes, wider awareness drives, and targeted digital literacy programs can significantly enhance the scheme’s effectiveness.

Government Measures to Improve Implementation

Recognizing the challenges faced in the initial phases, the government has taken proactive steps to make the PM SVANidhi Scheme more accessible, efficient, and impactful.

1. Strengthening Awareness Campaigns

  • Launch of PM SVANidhi Se Samriddhi program to create awareness about the scheme and link beneficiaries with other government welfare schemes.
  • Use of radio jingles, street plays, and local influencers to spread information in regional languages.

2. Simplifying Documentation

  • Allowing self-declaration in certain cases where official vending certificates are unavailable.
  • Streamlining the issuance of Letters of Recommendation (LoR) by Urban Local Bodies.

3. Promoting Digital Literacy

  • Collaboration with banks, fintech companies, and NGOs to train vendors in UPI, QR codes, and mobile wallet usage.
  • Distribution of low-cost smartphones to vendors in some pilot projects.

4. Expanding Loan Coverage

  • Introduction of higher second and third loan cycles (₹20,000 and ₹50,000) to meet the needs of vendors aiming for business expansion.

5. Improving Monitoring Mechanisms

  • Real-time tracking of applications through the PM SVANidhi Portal.
  • State-level review meetings to ensure uniform implementation across regions.

These measures reflect the government’s commitment to making PM SVANidhi inclusive, vendor-friendly, and future-ready, ensuring it benefits the maximum number of street entrepreneurs.

Relevance of PM SVANidhi in UPSC/JKAS Exam Preparation

For UPSC and JKAS aspirants, the PM SVANidhi Scheme is more than just a welfare program—it’s a case study in governance, economic inclusion, and urban policy-making. Its multidimensional nature makes it relevant for Prelims, Mains, and even Interview stages.

1. Prelims Relevance

  • Static Facts: Launch year, implementing ministry, loan amounts, interest subsidy rate.
  • Current Affairs: Progress reports, new initiatives like PM SVANidhi Se Samriddhi.

2. Mains Relevance

  • Polity & Governance: Role of Urban Local Bodies and central schemes in urban management.
  • Economy: Financial inclusion, credit access for the informal sector, digital transactions.
  • Social Issues: Upliftment of marginalized communities, women empowerment, and poverty alleviation.

3. Essay Paper Potential

  • Topics on “Empowering the Informal Economy” or “Digital Inclusion in India’s Growth Story” can draw on PM SVANidhi as an example.

4. Interview Use

  • Candidates can cite PM SVANidhi in responses about urban livelihoods, post-COVID recovery measures, and inclusive governance.
  • Knowledge of local/state implementation can give aspirants an edge in JKAS interviews.

5. Linkages with Other Schemes

  • Relevant in the context of DAY-NULM, AtmaNirbhar Bharat Abhiyan, and Digital India.

Understanding PM SVANidhi equips aspirants with concrete examples for exam answers, helping them demonstrate both awareness of policy and analytical ability.

Static Portion (Polity, Governance, Economy)

When preparing for UPSC or JKAS, aspirants must not only know the factual details of PM SVANidhi but also place it within the framework of static syllabus topics.

1. Polity and Governance

  • Constitutional Context:
    • Street vending is linked to Article 19(1)(g) – the right to practice any profession, trade, or business.
    • Role of Urban Local Bodies (ULBs) under the 74th Constitutional Amendment Act, which empowers municipalities to regulate street vending.
  • Legal Framework:
    • Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 – provides legal recognition and safeguards.
    • Powers of Town Vending Committees in identifying and issuing vending certificates.

2. Economy

  • Sectoral Importance:
    • Street vending contributes significantly to urban informal sector GDP.
    • Enhances last-mile delivery of goods at affordable prices.
  • Financial Inclusion:
    • PM SVANidhi as an example of integrating the unbanked population into the formal credit ecosystem.
    • Linkages with other schemes like Jan Dhan Yojana and Digital India.

3. Urban Development

  • Planning & Infrastructure:
    • Creation of vending zones and integration of vendors in Smart City Mission designs.
  • Social Inclusion:
    • Empowering women vendors and marginalized communities through targeted lending.

By connecting PM SVANidhi to static syllabus areas, aspirants can make their answers richer, more analytical, and exam-ready.

Current Affairs Linkages

The PM SVANidhi Scheme frequently appears in current affairs, making it highly relevant for both UPSC and JKAS aspirants. Keeping track of updates helps in Prelims and adds depth to Mains answers.

1. PM SVANidhi Se Samriddhi

  • Launched as an extension program to link beneficiaries with eight other welfare schemes like PM Suraksha Bima Yojana, PM Jeevan Jyoti Bima Yojana, and Ayushman Bharat.
  • Expands the scheme from just a credit facility to a comprehensive welfare package.

2. Digital Inclusion Push

  • Introduction of cashback incentives for UPI/QR code transactions.
  • Partnerships with fintech companies for QR code installation drives in markets.

3. Post-COVID Economic Recovery

  • Highlighted in Economic Survey of India as an example of targeted government intervention in the informal sector.
  • Used in G20 discussions on inclusive urban economic growth.

4. State-Level Innovations

  • Telangana: Door-to-door awareness campaigns for PM SVANidhi.
  • Madhya Pradesh: Integration with Chief Minister Street Vendor Scheme to offer higher loan limits.

5. Exam Trends

  • Questions in recent UPSC and state PSC Prelims on loan amounts, interest subsidy, and implementing agency.
  • Mains essay topics around digital empowerment and urban livelihoods often benefit from citing PM SVANidhi.

Tracking such updates ensures aspirants can quote the latest data and initiatives, making their answers factually strong and contextually relevant.

Way Forward for PM SVANidhi Scheme

While PM SVANidhi has already impacted millions of street vendors, there is room for further strengthening the scheme to ensure long-term sustainability and wider outreach.

1. Expanding Awareness and Outreach

  • Launch localized campaigns in regional languages using radio, community leaders, and street vendor associations.
  • Increase partnerships with NGOs and self-help groups for last-mile awareness.

2. Simplifying Application Processes

  • Introduce single-page loan application forms for vendors with minimal literacy.
  • Expand self-declaration provisions for vendors without formal identification.

3. Enhancing Loan Amounts

  • Adjust loan slabs periodically to keep up with inflation and rising input costs.
  • Provide special higher credit limits for vendors running multi-person operations.

4. Strengthening Digital Literacy

  • Conduct hands-on training camps for digital payments in weekly markets.
  • Offer subsidized smartphones and data packages in partnership with telecom companies.

5. Integrating with Other Schemes

  • Link PM SVANidhi beneficiaries to skill development programs, micro-insurance, and pension schemes.
  • Align with Smart City Mission to create dedicated vending zones with infrastructure support.

6. Robust Monitoring and Feedback

  • Set up vendor feedback systems via SMS or mobile app.
  • Use AI-based analytics on transaction data to assess vendor growth and repayment patterns.

By focusing on these areas, PM SVANidhi can evolve from being just a pandemic recovery initiative to a permanent pillar of India’s urban livelihood framework.

Conclusion

The PM SVANidhi Scheme stands out as a pioneering initiative in India’s journey towards inclusive urban development. By offering collateral-free credit, promoting digital payments, and linking beneficiaries to broader welfare schemes, it addresses the financial, social, and technological needs of street vendors in a holistic manner.

For UPSC and JKAS aspirants, PM SVANidhi is not merely a fact to memorize—it is a case study that demonstrates how targeted policy interventions can uplift marginalized communities while fostering economic resilience. Its relevance spans across polity, economy, governance, and social justice, making it a vital example to cite in both Prelims and Mains.

Going forward, with wider awareness, increased loan capacities, and integrated welfare linkages, PM SVANidhi has the potential to transform India’s street vending sector into a more secure, dignified, and growth-oriented profession.

Frequently Asked Questions (FAQs) on PM SVANidhi for UPSC/JKAS Aspirants

1. What is the PM SVANidhi Scheme?

The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) is a Central Sector Scheme launched on June 1, 2020, to provide collateral-free working capital loans to street vendors. It also promotes digital transactions and aims to integrate vendors into the formal financial system.

2. Who implements the PM SVANidhi Scheme?

The scheme is implemented by the Ministry of Housing and Urban Affairs (MoHUA) with operational support from the Small Industries Development Bank of India (SIDBI) and Urban Local Bodies (ULBs).

3. What are the loan amounts available under PM SVANidhi?

  • First Cycle: ₹10,000 (1-year tenure)
  • Second Cycle: ₹20,000 (on timely repayment of first loan)
  • Third Cycle: ₹50,000 (on timely repayment of second loan)

4. What is the interest subsidy provided under the scheme?

Beneficiaries receive a 7% annual interest subsidy, credited quarterly to their bank account via Direct Benefit Transfer (DBT).

5. How does the scheme promote digital transactions?

Vendors earn cashback incentives of ₹50, ₹75, or ₹100 per month based on the number of digital transactions. The maximum annual cashback is ₹1,200.

6. Why is PM SVANidhi important for UPSC/JKAS exam preparation?

It is a perfect example of inclusive governance, urban policy, and financial inclusion, relevant for Polity, Economy, Governance, and Social Issues sections of the syllabus. It also connects with current affairs and can be used as a case study in Mains or Essay papers.

PM SVANidhi – UPSC/JKAS MCQs with Explanations

1. Consider the following statements regarding the PM SVANidhi Scheme:

  1. It is a Centrally Sponsored Scheme implemented by the Ministry of Housing and Urban Affairs.
  2. It provides collateral-free working capital loans to street vendors.
  3. The loans are provided only to vendors having a Certificate of Vending.

Which of the above statements is/are correct?

A. 1 and 2 only
B. 2 only
C. 1 and 3 only
D. 1, 2, and 3

✅ Answer: B. 2 only

Explanation:

  • Statement 1: Incorrect. PM SVANidhi is a Central Sector Scheme (100% funded by the Central Government), not a Centrally Sponsored Scheme.
  • Statement 2: Correct. It provides collateral-free working capital loans to street vendors to restart their businesses.
  • Statement 3: Incorrect. Vendors without a Certificate of Vending can also apply if they obtain a Letter of Recommendation (LoR) from the Urban Local Body (ULB).

2. Which of the following is/are features of the PM SVANidhi Scheme?

  1. Interest subsidy of 7% per annum is provided on timely repayment.
  2. The scheme is implemented through SIDBI and Urban Local Bodies.
  3. Only rural street vendors are eligible for the scheme.

A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2, and 3

✅ Answer: A. 1 and 2 only

Explanation:

  • Statement 1: Correct. The scheme provides a 7% annual interest subsidy credited quarterly through DBT.
  • Statement 2: Correct. Implemented by the Ministry of Housing and Urban Affairs with SIDBI and ULBs as partners.
  • Statement 3: Incorrect. The scheme is for urban street vendors, but certain peri-urban and rural vendors operating in urban areas can also apply.

3. In the context of the PM SVANidhi Scheme, which of the following is NOT correct?

A. The first loan cycle is for ₹10,000 with a one-year tenure.
B. There is a penalty for early repayment of loans.
C. The scheme promotes digital transactions by offering cashback incentives.
D. The scheme was launched in June 2020 as part of AtmaNirbhar Bharat Abhiyan.

✅ Answer: B. There is a penalty for early repayment of loans.

Explanation:

  • The scheme does not impose any penalty for early repayment. Vendors can repay before the due date without extra charges.
  • A, C, and D are correct statements — initial loan of ₹10,000, cashback for digital payments, and launched under AtmaNirbhar Bharat in June 2020.

4. Which ministry is responsible for implementing the PM SVANidhi Scheme?

A. Ministry of Micro, Small and Medium Enterprises
B. Ministry of Rural Development
C. Ministry of Housing and Urban Affairs
D. Ministry of Finance

✅ Answer: C. Ministry of Housing and Urban Affairs

Explanation:

  • PM SVANidhi is implemented by the Ministry of Housing and Urban Affairs (MoHUA) in partnership with SIDBI. It targets urban street vendors, so rural development ministry is not involved in its primary execution.

5. Which of the following schemes is directly linked with PM SVANidhi under the “PM SVANidhi Se Samriddhi” program?

  1. PM Suraksha Bima Yojana
  2. Ayushman Bharat – PMJAY
  3. PM Jeevan Jyoti Bima Yojana
  4. Pradhan Mantri Shram Yogi Maandhan Yojana

A. 1, 2, and 3 only
B. 2 and 4 only
C. 1, 2, 3, and 4
D. 1 and 3 only

✅ Answer: C. 1, 2, 3, and 4

Explanation:

  • The PM SVANidhi Se Samriddhi initiative aims to integrate PM SVANidhi beneficiaries with eight other central welfare schemes, including PMSBY, PMJJBY, Ayushman Bharat, and PM-SYM, among others.

Advanced MCQs on PM SVANidhi

1. The PM SVANidhi Scheme was launched to support which of the following categories of workers?

  1. Street vendors operating in notified urban areas.
  2. Migrant agricultural laborers.
  3. Street vendors in peri-urban areas.

A. 1 only
B. 1 and 3 only
C. 1 and 2 only
D. 1, 2, and 3

✅ Answer: B. 1 and 3 only

Explanation:
The scheme is primarily for urban street vendors and includes those in peri-urban/rural areas who operate in urban regions. It does not cover agricultural laborers.

2. Which of the following are correct regarding the loan cycles under PM SVANidhi?

  1. First loan cycle: ₹10,000; Second: ₹20,000; Third: ₹50,000.
  2. Interest subsidy is given only for the first loan cycle.
  3. Timely repayment of loans is necessary to progress to the next cycle.

A. 1 and 3 only
B. 1 and 2 only
C. 1 only
D. 2 and 3 only

✅ Answer: A. 1 and 3 only

Explanation:
Interest subsidy is applicable in all loan cycles, not just the first. Timely repayment is mandatory for moving to the next cycle.

3. Consider the following regarding digital transaction incentives under PM SVANidhi:

  1. Cashback is available up to ₹200 per month.
  2. The incentive is linked to the number of eligible digital transactions per month.
  3. The maximum annual cashback possible is ₹1,200.

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2, and 3

✅ Answer: B. 2 and 3 only

Explanation:
The monthly cashback is up to ₹100, not ₹200. Vendors can earn ₹50, ₹75, or ₹100 depending on their digital transaction count.

4. With reference to PM SVANidhi Se Samriddhi, which of the following statements is/are correct?

  1. It links PM SVANidhi beneficiaries to other Central Government welfare schemes.
  2. It was initially launched in 125 cities and later expanded nationwide.
  3. It is implemented by the Ministry of Social Justice and Empowerment.

A. 1 and 2 only
B. 2 only
C. 1 and 3 only
D. 1, 2, and 3

✅ Answer: A. 1 and 2 only

Explanation:
The program is under Ministry of Housing and Urban Affairs, not the Ministry of Social Justice. Its pilot phase began in 125 cities before expansion.

5. Which financial institution partners with the Ministry of Housing and Urban Affairs for PM SVANidhi implementation?

A. NABARD
B. SIDBI
C. RBI
D. NCDC

✅ Answer: B. SIDBI

Explanation:
The Small Industries Development Bank of India (SIDBI) is the implementation partner for PM SVANidhi, providing technical and financial expertise.

6. Which of the following is/are eligibility conditions for a street vendor to avail PM SVANidhi benefits?

  1. Must be engaged in vending on or before March 24, 2020.
  2. Must have a Certificate of Vending or a Letter of Recommendation.
  3. Must be a member of a registered Street Vendor Association.

A. 1 and 2 only
B. 2 and 3 only
C. 1 only
D. 1, 2, and 3

✅ Answer: A. 1 and 2 only

Explanation:
Being part of a vendor association is not a mandatory eligibility criterion. Vendors need proof of vending before the lockdown and necessary certification or LoR.

7. Which of the following statements correctly describe PM SVANidhi?

  1. It is part of the AtmaNirbhar Bharat Abhiyan.
  2. It was launched in response to the COVID-19 pandemic.
  3. It provides both financial and digital literacy support to beneficiaries.

A. 1 and 2 only
B. 2 only
C. 1, 2, and 3
D. 3 only

✅ Answer: C. 1, 2, and 3

Explanation:
The scheme was indeed launched under AtmaNirbhar Bharat, in response to COVID-19, and includes awareness drives on digital payments.

8. In PM SVANidhi, the interest subsidy is:

  1. 7% annual rate
  2. Credited monthly into the beneficiary’s bank account
  3. Paid through Direct Benefit Transfer (DBT)

A. 1 and 3 only
B. 1 only
C. 2 and 3 only
D. 1, 2, and 3

✅ Answer: A. 1 and 3 only

Explanation:
The interest subsidy is credited quarterly, not monthly, directly into the beneficiary’s bank account via DBT.

9. Which of the following states have implemented special awareness drives to promote PM SVANidhi?

  1. Telangana
  2. Madhya Pradesh
  3. Kerala

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2, and 3

✅ Answer: D. 1, 2, and 3

Explanation:
Multiple states, including Telangana, MP, and Kerala, have run state-specific campaigns for PM SVANidhi awareness.

10. The repayment tenure for the first loan under PM SVANidhi is:

A. 6 months
B. 1 year
C. 18 months
D. 2 years

✅ Answer: B. 1 year

Explanation:
The first-cycle loan of ₹10,000 has a 12-month repayment period, with provisions for early repayment without penalty.

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Sudhanshu Trilokia

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