To enable this, the government plans to use the PM Vishwakarma scheme as a template for other financial inclusion schemes as well, financial services secretary Vivek Joshi said. This will include digital identification; a three-stage selection process for beneficiaries at the village, district and state levels; and upgradation of skills. PM Vishwakarma imparts skills training to beneficiaries and then gives them loans.

“Skill will be an important component of financial inclusion schemes, and if beneficiaries do not upgrade their skills, they will not be entitled to collateral-free soft loans,” Joshi said.

An official aware of the development said that to make productive use of the financial support given under social schemes, skill upgrades would be rewarded through capital support to segments and individuals. While this is not being done for all schemes currently, financial support is extended only on evaluation of business proposals from the targeted segments, the official said, requesting anonymity.

Queries sent to the finance ministry on the above issue were unanswered till press time.

Apart from future schemes, some ongoing ones—such as Mudra Yojana, Stand-Up India and PM SVAnidhi—will also pivot to the PM Vishwakarma scheme’s model, Joshi said.

The Mudra Yojana provides financial support to income-generating small business enterprises in the manufacturing, trading and service sectors, including activities allied to agriculture. Stand Up India facilitates loans from banks to Scheduled Castes (SC), Scheduled Tribes (ST) and women for setting up greenfield enterprises. PM SVAnidhi (PM Street Vendor’s AtmaNirbhar Nidhi) provides working capital loans to street vendors to help them move up the economic ladder and help formalize the segment.

And PM Vishwakarma, launched by the Centre on 17 September 2023, aims to provide skill upgradation training to artisans and craftspeople. It also offers collateral-free loans with interest subvention support to those who complete the training, so they can build brands and have improved access to markets.

Experts said the approach is not new, and has been used in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), but expanding this to other financial inclusion schemes could be challenging.

“Part of the problem is, are there enough instructors who can impart these skills efficiently?” said economist Pronab Sen, a former chief statistician of India. “As things stand, we don’t have enough trainers for our training institutes.”

The Mudra Yojana, launched on 8 April 2015, has sanctioned more than 437.4 million loans amounting to ₹25.51 trillion up to 6 October 2023. Stand Up India, launched on 5 April 2016, has sanctioned loans amounting to ₹47,073 crore to SC, ST and women borrowers till 24 November 2023.

The PM SVAnidhi scheme, launched on 1 June 2020 to support street vendors affected during the time of covid, has disbursed loans to the tune of ₹9,790 crore in the past four years.

In December, Union minister Hardeep Singh Puri informed the Rajya Sabha that loans disbursed to PM SVAnidhi beneficiaries stood at ₹2,039 crore in FY21, ₹1,248 crore in FY22, ₹1,866 crore in FY23 and ₹4,637 crore for FY24 up to 5 December.

PM Vishwakarma is the latest financial inclusion scheme launched last September. The scheme has a ₹13,000 crore outlay over five years up to 2027-28. With this scheme, the government made disbursal of credit conditional upon beneficiaries attaining specific milestones of training for the first time.

As part of bringing the unconnected or those left out from benefits of various financial inclusion schemes of the government, the Centre has launched the Viksit Bharat Sankalp Yatra, which is a countrywide initiative to track the implementation of central government schemes. The campaign intends to increase the number of beneficiaries under financial inclusion schemes.

It also ensures that targeted sections of society are provided with the necessary skill sets that help in better utilization of central funds and in qualitative value addition to the economy.