Economics Extended Essay

Candidate Code:

Topic: Development(Improvement in living

standards of living standard of street vendor)

Research question:To what extent is the Pradhan Mantri SAVNidhi

scheme being effective in improving the living standards in terms of increase

in their income and change in the consumption, health and education

expenditure and the level of debt of the street vendors of C-Scheme and

Mansorovar from 2021-2022

Word Count:

Table Contents
Introduction 2
Worthiness of investigation 5
Research Methodology 7

ANALYSIS AND DISCUSSION 9

INCOME INDICATOR 10
Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme 10
Change in Consumer Expenditure 19

Health Indicator 24

Education Indicator 28

Indebtedness 30
Correlation Analysis 33

Conclusion 36

Bibliography 38
Books 38

Appendices 39
Appendix 1: General questionnaire given to the beneficiaries of C-Scheme and Mansorovar
39
Appendix 3: Sample Response 2 43
APPENDIX 4: Collected data on street vendors of C-Scheme 45
APPENDIX 5: Colleted data on street vendors of C-Scheme 48
Appendix 7: Average Change in income in C-Scheme and Mansarovar in (%) 55
Appendix 8: Average Change in income in C-Scheme and Mansarovar in (₹) 55
Appendix 9: Expenditure on consumer durable goods by Mansarovar street vendors 56
Appendix 10: Expenditure on consumer durable goods by C-Scheme street vendors 56
Appendix 11: High Income group savings pre and post scheme in C-Scheme 57
Appendix 12: Change in Income vs Change in Expenditure on food in C-Scheme 57
Appendix 13: Change in Income vs Change in Expenditure on food in Mansarovar 61
Appendix 14: Number of sick leaves taken 64
Appendix 15: Enrollment pre and post scheme 65
Appendix 16: Indebtedness level in C-Scheme and Mansarovar pre and post scheme 66
Appendix 17: C-Scheme interview 67
Appendix 18: Muncipalty Interview 70
Table of Charts, Table of Figures

1
Introduction

The informal sector employs about 81% of the India labor market and street vending accounts

for about 14% of the urban informal employment.1 Street vendor is “a person who offers goods

or services for sale to the public without having a permanently built structure”2. These poor,

marginalized street vendors serving in vulnerable sectors haven’t yet received legal legitimacy3.

A major reason for this is difficulty in having access to formal credit.4 Opportunities of self

employment and poverty alleviation can be achieved through financial inclusion and inclusive

growth.5,6 However, easy access to formal credit institutions has always been the biggest hurdle

because without sufficient credit, their scarce trading resources quickly run out7. Furthermore,

these street vendors are often easy targets for municipalities and policemen8 and often have to

indulge in bribery to resume their trade9.

1 "A. Samarpitha, et [Link]". 2023 [Link] Samarpitha, et [Link]. Accessed 10

January 2023.
2 “Defining Street Vendors – National Association of Street Vendors of India – NASVI.” [Link], 2023,
[Link]/defining-street-vendors/. Accessed 9 Jan. 2023.
3 Bhowmik, Sharit, and Debdulal Saha. FINANCIAL ACCESSIBILITY of the STREET VENDORS in INDIA: CASES
of INCLUSION and EXCLUSION a Study Conducted By. 2011.
4 Kumari, Pinki. (2015). Issues and Challenges for Street Vendors in Delhi. SSRN Electronic Journal.
10.2139/ssrn.2779343.
5 “Reserve Bank of India - Reports.” [Link], 2020, [Link]/Scripts/[Link]?
UrlPage=&ID=1154. Accessed 9 Jan. 2023.
6 "Financial Inclusion Overview". 2023 [Link]
ion/overview#:~:text=Financial inclusion means that individuals,a responsible and sustainable way. Accessed 10
January 2023.
7 Saha, Debdulal, and Phd Scholar. CONDITIONS of “DECENT WORKING LIFE” of STREET VENDORS in
MUMBAI.
8 "Dr.-[Link]". 2023 [Link] 05/Dr.-Varun-Sharma-
[Link]. Accessed 10 January 2023.
9 Singh, Harshraj. “Street Vendors Forced to Pay Bribe to Station Carts Waiting for Vending Zones.” Hindustan
Times, Hindustan Times, 24 May 2015, [Link]/punjab/street-vendors-forced-to-pay-bribe-to-
station-carts-waiting-for-vending-zones/[Link]. Accessed 9 Jan. 2023.

2
Furthermore, the pandemic worsened the problems for street vendors initially10 and the economy

fell into a recession11. For the recovery of the economy, a fiscal stimulus package worth 6.2812

crore was released and policies such as the Pradhan Mantri SAVNidhi yojana were enacted

which is a special micro credit facility scheme for street vendors specifically13 and aims to

benefit 50 lakh street vendors in India with budget allocation of 5,000 crore14. Up to 10,000

rupees can be availed with an interest subsidy at 7%15.

However, the effectiveness of the scheme has been debated. Through a study conducted, it is

estimated that over 40% of the street vendors were not even aware of the scheme and over 85%

of the people didn’t receive the Letter of Recommendation from their Municipality16 which is

needed to avail the benefits of the scheme. The study conducted by IGSSS indicates that only

11% of the street vendors actually benefited from the scheme17.

10 Banerji, Annie. “FEATURE-Indian Street Vendors “Shattered” as Coronavirus Wrecks Trade.” U.S., 21 Sept.
2020, [Link]/article/healthcoronavirus-india-workers-idUSL8N2GB44R. Accessed 6 Jan. 2023.
11 Bhattacharya, Payal. “Explained: How Indian Economy Stumbled, Recovered since Lockdown.” The Times of
India, Times Of India, 24 Mar. 2021, [Link]/business/india-business/one-year-of-covid-
lockdown-how-indian-economy-dealt-with-the-virus/articleshow/[Link]. Accessed 9 Jan. 2023.
12 Special Correspondent. “Govt. Unveils ₹6.28 Lakh Cr Stimulus Post Second COVID Wave.” [Link], 28
June 2021, [Link]/business/Economy/nirmala-sitharaman-unveils-new-covid-recovery-package-
expands-credit-relief/[Link]. Accessed 1 Jan. 2023.
13 “Login - PM SVA Nidhi.” [Link], 2023, [Link]/LoginSecondLoanTerm. Accessed 2
Jan. 2023.
14 NDTV. “Rs 5,000 Crore Credit for Street Vendors, 50 Lakh to Benefit: Government.” [Link], 14 May 2020,
[Link]/india-news/coronavirus-lockdown-rs-5-000-crore-special-credit-facility-for-street-vendors-50-lakh-
to-benefit-government-2228811. Accessed 2 Jan. 2023.
15 “PM SVAnidhi.” [Link], 2014, [Link]/Home/Schemes. Accessed 10 Jan. 2023.
16 Rana, Ratika. “Survey Shows Only 11.5% Street Vendors Benefit from PM Credit Scheme.”
[Link], The Logical Indian, 4 Oct. 2021, [Link]/inclusivity/street-vendors-31045.
Accessed 3 Jan. 2023.

17 D’Cruz, Adrian. “Only 11% of Vulnerable Street Vendors Benefitted from PM Credit Scheme: Survey.”
IndiaSpend, Indiaspend, 15 Sept. 2021, [Link]/governance/only-11-of-vulnerable-street-vendors-
benefitted-from-pm-credit-scheme-survey-774968. Accessed 7 Jan. 2023.

3
Hence, to investigate further and gain more knowledge about the impact of the policy, the

research question-“To what extent is the Pradhan Mantri SAVNidhi scheme being effective

in improving the living standards in terms of increase in their income and change in the

consumption, health and education expenditure and the level of debt of the street vendors

of C-Scheme and Mansorovar from 2021-2022?” was created.

I used established models such as the Kuznet curve18, Harrod Domar growth model19 to

analyze the impact of the scheme and its shortcomings while employing theories like Critical

minimum effort theory20, Unbalanced growth theory21, Big push theory22, to all the

observations I made as I dived deeper into the study of PMSAVNY scheme.

Worthiness of investigation

Former UN Secretary General Kofi Annon said that micro credit facilities have been a “weapon

against poverty and hunger”23 and “can change people’s lives for better”.24 The founder of

Grammen bank, Mohammad Yunus also emphasized that poverty is “created by the structures of

18 [Link] “Understanding Kuznets Curve: The Basis for Trickle-down

Theory.” ThoughtCo, 2019, [Link]/kuznets-curve-in-economics-1146122. Accessed 19 Jan. 2023.
19 English, An, et al. The Harrod-Domar Growth Model the Harrod Model. 1900.
20 “Leibenstein Critical Minimum Theory (with Diagram).” Economics Discussion, 6 Feb. 2015,
[Link]/theories/leibenstein-critical-minimum-theory-with-diagram/4646. Accessed 19 Jan.
2023.
21 “Unbalanced Growth Theory: Explanation, Process and Priorities.” Economics Discussion, 6 Feb. 2015,
[Link]/economic-development/unbalanced-growth-theory-explanation-process-and-
priorities/4630. Accessed 19 Jan. 2023.
22 “Trickle-down Economics: Theory, Policies, Critique.” Investopedia, 2023,
[Link]/terms/t/[Link]#:~:text=The%20trickle%2Ddown%20theory
%20states,brackets%20as%20well%20as%20corporations.. Accessed 19 Jan. 2023.
23 “Microfinance: Good for the Poor?” Africa Renewal, 19 June 2015,
[Link]/africarenewal/magazine/august-2015/microfinance-good-poor. Accessed 19 Jan. 2023.
24 “MICROCREDIT EXTENDS SAME RIGHTS to POOR as ARE AVAILABLE to EVERYONE ELSE, SAYS
SECRETARY-GENERAL in MESSAGE to LAUNCH CEREMONY for INTERNATIONAL YEAR | UN Press.”
[Link], 18 Nov. 2004, [Link]/en/2004/[Link]. Accessed 19 Jan. 2023.

4
the society, and the policies pursued by the society”.25 The belief is that through micro credit, a

virtuous cycle can be created: “low income, injection of credit, investment, more income, more

savings, more investment, more income”26

Studies by (Hashemi et al., 1996; Montgomery et al., 1996; Remenyi, 1997; Khandker, 1998;

Husain, 1998; Khandker and Pitt, 2005; Swain et al., 2008) do suggest that microfinance can

be a game changer in reducing poverty. However some studies like (Morduch, 1998; Altay,

2007; Banerjee et al., 2009; Roodman and Morduch, 2009) suggest that there is very little

impact on poverty by microfinance. The study by Vanuatu and El Salvador, Daley-Harris and

Zimmerman (2009) suggests that if microfinance is used for daily consumption then it would

rather help increase the debt for the borrowers27 while Camilla Johansson and Lisa Pettersson

would argue that through micro-credits, poor people can build up their business and become

more productive, having an spillover effect on the country and raising the GDP28.

Through this research, the aim is to have greater insight on whether microfinance institutions are

able to provide financial inclusion or not to street vendors and the claim of proving more credit

would empower the poor and generate higher income for the street vendors is true or not.

25 “Muhammad Yunus Quotes (Author of Banker to the Poor).” [Link], 2023,

[Link]/author/quotes/1254841.Muhammad_Yunus. Accessed 19 Jan. 2023.
26 “History of Grameen Bank | [Link].” [Link], 2013,
[Link]/history-of-grameen-bank/. Accessed 19 Jan. 2023.
27 Daley-Harris, Sam & Zimmerman, Jamie. (2009). 'Microfinance does not usually serve the very poor, for whom
it can represent a route into debt rather than a way out of poverty.'. Enterprise Development and Microfinance. 20.
79-85. 10.3362/1755-1986.2009.010.
28 Johansson, Camilla, et al. Microcredit Impact on Business Performance a Minor Field Study in El Salvador.
2014.

5
Additionally, another key aspect of the scheme was its role in increasing digital literacy which

had been doubted since its launch.

Research Methodology

After reading theories like the Big push model29, several research papers and articles, and gone

through the UNDP development indicators30, it was determined that the Human Development

Index would be the indicator used in the investigation for measuring the changes that occured in

living standards of beneficiaries in C-Scheme and Mansarovar pre and post Prandhan Mantri

SAVNidhi yojana.

Comparative analysis between the two localities was done through modeling the changes in

income, health expenditure and education expenditure. 5 consumer durable goods selected from

the survey were used for knowing the change in the income, consumption expenditure and thus

indicate a change in living standards. A correlation analysis was created to calculate the change

in street vendors debt before and after implementation of PMSAVNY.

29 “Big Push Theory of Economic Development | Economics.” Economics Discussion, 2 Mar. 2018,
[Link]/economic-theories/big-push-theory/big-push-theory-of-economic-development-
economics/30177. Accessed 2 Jan. 2023.
30 "Human Development Indicators (UN) • European University Institute". 2023
[Link] /Economics/Statistics/DataPortal/HDR#:~:text=Human
Development Indicators published annually,the annual Human Development Report. Accessed 4 January 2023.

6
Primary data was collected through open and close-ended interviews to 60 street vendors(30

from each locality) This allows for a constructive comparison between street vendors residing in

the same city but with different social and economic backgrounds. To prevent language barrier,

the questions were asked in the local language of Hindi. The Municipality heads were

interviewed for knowing the hurdles faced while implementing the scheme. Through open ended

questions, a deep understanding of various perspectives were able to be gained. However, the

municipality's political biases towards PMSAVNY may have impacted the integrity of our

results. Further, there might be Fundamental Attribution error which is “overemphasizing

personal factors and under-estimating situational factors when explaining other people’s

behavior”31. Through observation, it was recorded that in Mansarovar there were several

government outlets providing free ration to people belonging to low income groups hence it has

potentially reduced Mansorovar’s street vendors’ sales and total income.

31"12 Cognitive Biases Infographic v [Link]". 2023 [Link] ch

advisory committee training/12 Cognitive Biases Infographic v [Link]. Accessed 20 January 2023.

7
 ANALYSIS AND DISCUSSION

HDI is a key measure in understanding the overall development of a human life. It is done

through taking into account 3 major factors that largely affect a human life: improvement in

education, healthy and long life, and standard of living32. The determination of whether

education has seen any substantial improvement is measured through the change in adult literacy

rate and the change in enrollment in primary, secondary and tertiary school33. Indication of a

change in standard of living for this study conducted at a micro level is done through observing

the changes in annual income of household’s which invariably affects their ability to fulfill their

basic needs. Further, debt levels would give an indication of whether the policy would be

successful in helping escape the vicious cycle of poverty for street vendors.

32 "Economics - course companion - jocelyn blink and ian dorton - second edition - oxford [Link]". 2023
[Link] nomics - course companion - jocelyn blink and ian dorton -
second edition - oxford [Link]. Accessed 20 January 2023.
33 IBID

8
 INCOME INDICATOR

To analyze the results gathered more effectively and have a better understanding, 3

categories were made based on annual income of the sample group.

Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme

Category Number of Annual Average Avg total income Avg Avg

people(total Income Income of after scheme Change in Change in

30 people) Bracket(INR) street enactment street Income(IN Income

vendor pre- vendor(INR) R) street (%) street

scheme vendor vendor

Low-Income 16 0-40,000 19,800 24,354 4,554 23%

group

Middle-Income 10 40,000-80,000 57,650 66,874 9,224 16%

group

High-Income 4 80,000- 102,100 109,247 7,147 7%

group 120,0000

9
 Table2: Change in Income of street vendors due to PMSAVNY, Mansarovar

Category Number of Annual Average Avg total income Avg Avg

people(total Income Income after scheme Change in Change in

30 people) Bracket(INR) street enactment street Income(IN Income

vendor pre vendor(INR) R) per (%) per

scheme(IN street street

R) vendor vendor

Low-Income 19 0-40,000 19,700 25,216 5,516 28%

group

Middle-Income 8 40,000-80,000 55,320 63,065 7,745 14%

group

High-Income 3 80,000- 100,000 106,000 6,000 6%

group 120,0000

10
Mean change in the Income of Street Vendors in C-Scheme-

( 4554 ×16)+( 9224 ×10)+(7147 × 4)

=₹ 6456.4
30

Mean change in Income of Street Vendors in Mansarovar-

(5516 ×19)+( 7745× 8)+(6000 ×3)

=₹ 6158.8
30

Table 3: Comparative Change in Income of a street vendor(%)

11
Table 4: Comparative Change in Income of a street vendor(INR)

Low income group:

12
Referring to Table 1 and 2 above, in terms of percentage change in income, the greatest

benefits were gained by the low income group (23% change in C-Scheme and 28%

change in Mansarovar).34,35 As the malls were either closed36 or people refused to go due

to the spread of the pandemic, several of them relied on these street vendors for their

basic necessities.37,38 Vendors selling fruits containing Vitamin C like lemons especially

saw an increase in their demand as everyone increased their purchase of immunity raising

fruits.39 Thus, helping increase the vendors revenue and income.40

However, in terms of absolute change in income, low income group were the least well

off ( ₹4,554 income change in C-Scheme and ₹5,516 income change in Mansarovar )41,42

Low income street vendors were often immigrants43 and thus had very limited

occupational mobility and even though most of the street vendors were able to avail full

10,000 of the micro-credit, it seems insufficient for a drastic change for them. 44 The

calculations of the mean change in income supports this as the mean change in income is

less than the total amount borrowed.45 Adhering to the Critical minimum effort theory,

34 Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme

35 Table2: Change in Income of street vendors due to PMSAVNY, Masarovar
36 News, Moneycontrol. “Coronavirus Pandemic: Govt’s Order to Shut Malls Impacts Retail Industry.”
Moneycontrol, Moneycontrol, 14 Mar. 2020, [Link]/news/business/coronavirus-pandemic-govts-
[Link]. Accessed 23 Jan. 2023.
37 Dutta, Arnab. “Covid-19 Pandemic: Consumers Unwilling to Visit Malls, Says Survey.” @Bsindia, Business
Standard, 17 June 2021, [Link]/article/economy-policy/covid-19-pandemic-consumers-
unwilling-to-visit-malls-says-survey-121061800031_1.html. Accessed 23 Jan. 2023.
38Appendix 2: Interview Transcript of Mansarovar locality Municipality head
39Appendix 1: Interview Transcript of Mansarovar street vendor
40Table 3: Comparative Change in Income of a street vendor(%)
41Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme
42 Table2: Change in Income of street vendors due to PMSAVNY, Masarovar
43 Appendix 2: Interview Transcript of Mansarovar locality Municipality head
44Interview with Muncipalty officer
45 Mean change in Income table

13
it is shown that the impact of stimulants is less than the impact of shocks. This could in

the long term lead them to debt traps as highlighted by the study of Dean Karlan,

Sendhil Mullainathan and Benjamin N. Roth.46 In accordance with Rosenstein-Rodan

Big Push theory, an initial big thrust to the Indian economy was needed during the

pandemic for recovery from recession and it seems that more financial support was

perhaps required.47

Middle Income group:

46 Karlan, Dean, et al. “Debt Traps? Market Vendors and Moneylender Debt in India and the Philippines.” SSRN
Electronic Journal, 2018, 10.2139/ssrn.3126399. Accessed 28 Oct. 2022.
47 Sanghera, Tish. “India Enters Recession as COVID-19 Surge Hinders Recovery.” [Link], Al Jazeera, 27
Nov. 2020, [Link]/economy/2020/11/27/india-enters-recession-amid-resurgence-in-covid-19-cases.
Accessed 24 Jan. 2023.

14
In relative terms, the middle income group was the second most benefited from the

scheme (16% income change in C-Scheme and 14% change in income in C-Scheme). 48,49

However, this is a -7% and -14% decrease in change in average income from low to

middle income group.50,51 In absolute terms though, the middle income group benefited

more (₹9,224 income increase in C-Scheme and ₹7,745 income increase in

Mansarovar).52,53 compared to the high income group (₹7,147 in C-Scheme and ₹6,000 in

Mansarovar)54,55. This suggests reduced income inequality and can even be represented

through the Kuznets curve because as the change in income(₹) has been higher for the

middle income group, the disparity in income between the middle and high income group

has decreased. Higher income would also lead to actual economic growth in the short run

for the Indian economy.

High Income group benefited too:

48Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme

49Table2: Change in Income of street vendors due to PMSAVNY, Mansarovar
50Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme
51Table2: Change in Income of street vendors due to PMSAVNY, Mansarovar
52Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme
53Table2: Change in Income of street vendors due to PMSAVNY, Mansarovar
54Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme
55Table2: Change in Income of street vendors due to PMSAVNY, Mansarovar

15
The high income group were the least benefited in relative terms (7% income change in C-

Scheme and 6% income change in Mansarovar)56,57 which indicates that the benefits of the

scheme slows down as the income rises. However, the absolute terms they were the second most

benefited (₹7,147 and ₹6,000 income raise in C-Scheme and Mansarovar

respectively)58,59. This can be explained as the high income street vendors were already

experiencing economies of scale through bulk buying and thus could lower their prices

while maintaining a marginal profit margin.60 Further, through the micro-credit availed,

the high income street vendors formed collective groups to purchase storage facilities 61.

This increased the Price elasticity of supply as ease of storage increased62. They were

more readily and easily able to supply immunity boosting fruits like Oranges and

Grapefruit63 while not rotting them.

As the Unbalanced growth theory suggests, the best method for escaping the cycle of poverty

in underdeveloped nations is unbalanced growth. According to Prof. Hirschman, shortages

brought on by unbalanced growth provide significant incentives for inventions and innovations.64

56Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme

57Table2: Change in Income of street vendors due to PMSAVNY, Mansarovar
58Table1: Change in Income of street vendors due to PMSAVNY, C-Scheme
59Table2: Change in Income of street vendors due to PMSAVNY, Mansarovar
60 Interview
61 IBID
62 “6.3: Price Elasticity of Supply.” Social Sci LibreTexts, 2018,
[Link]/Bookshelves/Economics/Book%3A_Economics_(Boundless)/
6%3A_Elasticity_and_its_Implications/6.3%3A_Price_Elasticity_of_Supply#:~:text=There%20are%20numerous
%20factors%20that%20impact%20the%20price%20elasticity%20of,mobility%2C%20and%20how%20costs
%20react.. Accessed 24 Jan. 2023.
63 Owens, Jack. “5 Fruits That Boost Your Immune System | the FruitGuys.” The FruitGuys, 7 Oct. 2019,
[Link]/2019/10/5-fruits-that-boost-your-immune-system/. Accessed 24 Jan. 2023.
64 “Unbalanced Growth Theory: Explanation, Process and Priorities.” Economics Discussion, 6 Feb. 2015,
[Link]/economic-development/unbalanced-growth-theory-explanation-process-and-

16
The microcredit scheme is essentially empowering one sector of the economy which thus as

shown by the Unbalanced theory, would in turn help in economic growth.

Change in Consumer Expenditure

priorities/4630. Accessed 31 Jan. 2023.

17
Because of an increase in their average income65 beneficiaries from Mansarovar and C-Scheme

have observed a change in their spending patterns.

ΔQD /QD
ϵ d=
ΔI /I

ϵ d= Income elasticity of demand

Δ QD
=Change in quantity demanded of Utensils
QD

ΔI
=Change in average income of street vendors
I

The income elasticity of demand for utensils by street vendors of C-Scheme

ϵ d=((12−17)/17)/6,386.67

65 Income Table

18
ϵ d= −0.0000391440

The income elasticity of demand for utensils by street vendors of Mansarovar

ϵ d=((23−17)/17)/6,586.67

ϵ d=0.00008675530

The YED in C-Scheme was negative, between 0 and -1, signifying that beneficiaries in C-

Scheme start to purchase less utensils as their incomes grow. The YED in Mansarovar is less

than 1 but greater than 0, highlighting that as the income of Mansarovar street vendors would

rise, they would make more purchase of utensils66. On the other hand, the purchase of light bulbs

has seen an increase by C-Scheme vendors by 15%. Several of them gather at a particular place

each night and plan for the following day. This raises their productivity. This contradicts what

Dr. KARTHIGAI CHELLASWAMY studies suggest that vendors seem to have “low level of

financial literacy”.67

66 “Income Elasticity of Demand | Intelligent Economist.” Intelligent Economist, 29 Aug. 2019,

[Link]/income-elasticity-of-demand/. Accessed 24 Jan. 2023.
67 Scholar, Research. FINANCIAL LITERACY and OTHER FACTORS MODERATING STREET VENDORS’
FINANCIAL DECISION MAKING NIKITHA NEELAPPA S Dr. KARTHIGAI PRAKASHAM CHELLASWAMY.
2022, [Link]/dashboard/uploads/[Link], 10.17605/[Link]/4MQG2.

19
In the short run, Mansarovar vendors would experience an increase in their living standards.

However, in the long run, C-Scheme vendors would be better off.

Table 5: High income group savings in (%)

20
Through primary data, it was revealed that the low to middle income group generated no savings,

the highest income group of C-Scheme had 1.78%68 savings pre PMSAVNY and 2.02% post

PMSAVNY.69 The theory of Marginal Propensity to Consume is applicable here. People with

low income have high marginal propensity to consume which means that they use a large

proportion of their income on purchasing goods and services, hence no savings70. However, as

the income increases, MPC falls and MPS increases simply because a high proportion of money

earned isn’t being consumed and hence being saved.

The Harrod Domar growth model is used to explain the reason for low level of development in

less developed countries. Because these countries tend to have low savings ratios, it results in

lower levels of investment. A potential reason for low savings ratios is that many people in poor

countries are in grinding poverty so their marginal propensity to consume is really high.

Investment too is often not very efficiently undertaken because the core banking system is a poor

financial system. Low investment leads to a low level of capital stock and thus low level of

output or GDP and therefore the income remains low71. Countries stuck in this cycle generally

have a low savings gap. Thus, it is important for PMSAVNY to perhaps increase their lending

amount so that the saving could be done.

68 Table 5: High income group savings in (%)

69 IBID
70 Canbary, Zara, and Charles Grant. Economics and Finance Working Paper Series the Marginal Propensity to
Consume for Different Socio-Economic Groups. 2019.
71 Harrod Domar Growth Model BA Sem vi Development Economics Code ECB-604.

21
 Health Indicator

The change in the expenditure on food by the beneficiaries of PMSAVNY yojana would be

modeled because this would help indicate the effect this micro credit scheme has had on the

child's health and nutrition, which has been one of the key problems in India for decades.

The initiative has successfully raised the average income of street vendors of both the localities:

C-Scheme and Mansorovar72. However, the increase in income in C-Scheme was higher than the

increase in income in Mansarovar. This invariably affects their expenditure of food. It is claimed

that there are estimatedly 189.2 million undernourished people in India73, the majority being

72 Table 1 and Table 2 of Change in Income of Street Vendors in Mansarovar and C-Scheme
73 Tripathi, Sachin. 750|Sachin Tripathi HUNGER and FOOD SECURITY in INDIA:-A REALITY CHECK vis-à-
vis SOME PRAGMATIC SOLUTIONS towards ACHIEVING the UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS of QUALITY EDUCATION and RESPONSIBLE CONSUMPTION and PRODUCTION
HUNGER and FOOD SECURITY in INDIA:-A REALITY CHECK VIS- À-VIS SOME PRAGMATIC SOLUTIONS
towards ACHIEVING the UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS of QUALITY
EDUCATION and RESPONSIBLE CONSUMPTION and PRODUCTION. Vol. 20, no. 1, 2021, pp. 1750–1753,
[Link]/mnstemps/218/[Link]?t=1674569148, 10.17051/ilkonline.2021.01.184.
Accessed 24 Jan. 2023.

22
women and children74. The major cause of malnourishment has been economic inequality75

which through this scheme has reduced.

It has been proven that health and productivity are proportionally related however, mental health

is an important part too which hasn't been measured in this study, hence a limitation.

Estimatedly, poor mental health costs $14 billion to the Indian employers each year76.

Chart 4: Change in expenditure on food vs Change in Income in C-Scheme

74 IBID
75 Singh, Shrikant, et al. “Socio-Economic Inequality in Malnutrition among Children in India: An Analysis of 640
Districts from National Family Health Survey (2015–16).” International Journal for Equity in Health, vol. 18, no. 1,
Dec. 2019, [Link]/articles/10.1186/s12939-019-1093-0, 10.1186/s12939-019-1093-0.
Accessed 24 Jan. 2023.
76 PTI. “Mental Health Issues Cost Indian Firms $14 Billion a Year, Says Deloitte.” [Link], 8 Sept. 2022,
[Link]/business/Industry/mental-health-issues-cost-indian-firms-14-bn-a-year-says-deloitte/
[Link]#:~:text=Poor%20mental%20health%20amongst%20employees,after%20surveying%20almost
%204%2C000%20workers.. Accessed 24 Jan. 2023.

23
Chart 4: Change in expenditure on food vs Change in Income in Mansarovar

Chart 3 and 4 illustrates that as the average change in income rises, the change in expenditure on

food starts to decline in both the localities, however, the rate of decreas in higher in Mansarovar

compared to C-Scheme. Initially, the monetary help provided by the scheme was used especially

by the low income group vendors to purchase their basic necessities like food.77 However, as the

average income raises, the credit facility is used in other aspects as the need for food is fulfilled.

This explains the reason for the change in expenditure to goes further in negative as income

group changes from low to middle to high. In both the localities, the greatest decrease in

expenditure on food is done by the high income group.

77 Interview with street vendors in Mansarovar

24
However, it is to be noted that this is an average increase which means that there were some

street vendors whose income fell and their expenditure on food fell too, as their spending pattern

perhaps on nutrition indicates.

Chart 5: No. of sick leaves taken

Chart 5 demonstrates that there is a higher change in leaves in C-Scheme of 31.43%78 compared

to 21.43%79 of Mansorovar. As previously mentioned, both the street vendors in these localities

may have started spending more on healthy food hence decline in sick leaves however, the

vendors in C-Scheme spent more on food expenditure, thus it can be reasoned that their health

78 Appendix 8: No. of sick leaves taken

79 IBID

25
improved more so the percentage decrease in sick leaves taken is higher in C-Scheme compared

to Masarovar. However, a limitation of this study is that during this time, India was witnessing

COVID-19 pandemic and so the amount of leaves is also affected by other factors such as

whether some street vendors contracted a disease or not. Hence, it is difficult to analyze, to what

extent has the change in income affected the health expenditure and the number of leaves taken

by the beneficiaries.

Education Indicator

One of the indicators of a developing economy is its rising average number of years of schooling

received by students as in the long run it impacts the productivity of labor80. Through

PMSAVNY, street vendors of both the localities have seen a raise in their average income81,

albeit, street vendors of C-Scheme have shown a higher increase compared to street vendors of

Mansarovar.

80 Susanto, Joko. “Education, Labour Productivity and Industrial Performance: Evidence of Indonesia.”
ResearchGate, unknown, 2014,
[Link]/publication/335135946_Education_Labour_Productivity_and_Industrial_Performance_Evide
nce_of_Indonesia. Accessed 24 Jan. 2023.
81Table 1 and Table 2 of Change in Income of Street Vendors in Mansarovar and C-Scheme

26
Chart 6: No. of children enrolled in a school

As depicted by the chart, there is a decrease in the student enrollment for children in C-Scheme

and Mansarovar even though the family’s income has increased. Through interview it was

gathered that the general education level of street vendors in C-Scheme were higher than that of

vendors in Mansarovar. Hence, C-Scheme vendors always had a belief in educating their

children. This change of mental attitude was perhaps a reason the enrollment in C-Schme was

higher pre and post pandemic. However, as the effects of pandemic worsened, parents worried

about their child safety so even though their financial status has improved through the scheme,

but the enrollment decreased. The rate of decrease was higher in Mansarovar -72.73% compared

to C-Scheme -64.29%. Another reason for decline in enrollment was because several government

27
schools were shut down due to the pandemic82. Further, as the online schooling took place, many

of these street vendors couldn’t afford electronic devices for their children and hence had no

other option but to unenroll their children from schools.83 Moreover, even after reopening of the

schools, parents were skeptical and afraid of sending their children back to school due to health

concerns84. Therefore, PMSAVNY in the long run, the scheme proves to be unsuccessful.

Indebtedness

The study conducted by Sharit K. Bhowmik and Debdulal Saha shows that street vendors’

“expenses far outweigh their earnings and they are always stuck in a debt trap”85. As Lina

Martinez study shows, repayment of debt “absorb a large share of their income and perpetuate

82 Law, Abhishek. “Nearly 20,000 Schools Closed in India in 2021-22 due to Covid, Staff Strength Also Dropped:
Ministry of Education Report.” [Link], 3 Nov. 2022,
[Link]/news/education/nearly-20000-schools-closed-in-india-in-2021-22-due-to-covid-
staff-strength-also-dropped-ministry-of-education-report/[Link]. Accessed 24 Jan. 2023.
83
84Appendix 1: Interview Transcript of Mansarovar street vendor

85 Saha, Debdulal, and Phd Scholar. CONDITIONS of “DECENT WORKING LIFE” of STREET VENDORS in
MUMBAI.

28
their indebtedness”86. Additionally, as shown by the study of Dean Karlan, Benjamin N North

and Sendhil Mullainathan, “most vendors fell back into debt within six weeks”87. Further vendors

like Kanchan Devi says that they haven’t been able to repay back the loans and their debt has

only increased.

A major reason for the initiation of PMSAVNY was to help ease the liquidity issues faced by

street vendors as the credit of up to rupees 10,000 helped restart or expand their business, hence

providing them with higher working capital than before.

86 Martinez, Lina, and Juan David. “Debt Portfolios of the Poor: The Case of Street Vendors in Cali, Colombia.”
ResearchGate, unknown, May 2018,
[Link]/publication/325255721_Debt_Portfolios_of_the_Poor_The_Case_of_Street_Vendors_in_Cali
_Colombia. Accessed 24 Jan. 2023.
87 Karlan, Dean, et al. “Debt Traps? Market Vendors and Moneylender Debt in India and the Philippines.”
American Economic Review: Insights, vol. 1, no. 1, 1 June 2019, pp. 27–42,
[Link]/articles?id=10.1257/aeri.20180030, 10.1257/aeri.20180030. Accessed 24 Jan. 2023.

29
Through PMSAVNY, the change in debt level of C-Scheme street vendors was 1.07%88 while

for street vendors in Mansarovar it was -0.72%89. The debt level decreased in C-Scheme because

of several factors, for example they most of their income in capital widening to raise their

productive potential. Instead of taking a loan at an interest rate of 10% or 11% which they

usually used to get from other lenders90, now they were getting the loan at only 7% interest rate91.

Further, the vendors started to incentivize more digital transactions which gave them monthly

cashbacks in increasing amounts which helped them pay off their previous debts92. However, the

debt level increased in Mansarovar because of higher proportion of income was spent on day to

day necesitities instead of growing their business to provide financial stability.

There are other trends that can be observed though the graph. The highest indebted vendors in

both the localities belong in the middle income group. The low income group vendors took

smaller loans and hence were able to much easily repay them while the high income street

vendors had bigger established businesses meaning sales were much more easily flowing in so

they still were able to repay back most of the loans. However, most of the middle income group

vendors were young93 and didn’t have enough business experience to handle the repayment of

loans properly94, hence they faceed highest indebtedness.

Due to the pandemic, the malls closed and so the demand for goods sold by street vendors

increased.
88Appendix 10: Indebtedness of street vendors in C-Scheme
89Appendix 11: Indebtedness of street vendors in Mansarovar
90Appendix 1: Interview Transcript of Mansarovar street vendor
91 “PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi)| National Portal of India.” [Link], 2020,
[Link]/spotlight/pm-street-vendors-atmanirbhar-nidhi-pm-svanidhi. Accessed 24 Jan. 2023.
92 IBID
93 Appedix 1: Interview with Mansarovar street vendor
94 Appedix 1: Interview with Mansarovar street vendor

30
31
Correlation Analysis

32
33
The correlation coefficient for C-Scheme is 0.94 while for Mansarovar it is -0.89. As the change

in income increased, the change in indebtedness reduced for C-Scheme vendors due to their

sound financial investments. As the correlation coefficient is 1 for C-Scheme it means that there

has been a stronger correlation. However, there needs to be other factors considered such as

inflation which was 5.51%95 in 2021. But the percentage change in income for a beneficiary on

an average was only 4.51%96. Thus it means that there is a decrease in their real income value. In

Mansarovar, the correlation coefficient is in negative and near -1, indicating strong inverse

relationship.

For the low income street vendors, the debts would quickly increase. This is because many of

them used the credit from PMSAVNY to pay off their previous debts instead of using the

financial support for capital deepening or widening.97 This means that they might purchase new

loans from the local money market at a higher interest rate to pay off the current micro-credit and

thus they are now perpetually stuck in a debt trap.98 Hence, PMSAVNY has not been very

successful in reducing street vendors' debt levels and thus not improving their living standards by

much.

95
96
97
98

34
Conclusion

PMSAVNY is a micro-credit scheme launched on June 1, 2020 to ease financial contrainsts for

street vendors since the lockdown hit in March 21, 2020 made them confront with “hunger and

deprivation.”99 To investigate the impact of the scheme, 2 localities were choosen and street

vendors were categorised into 3 income groups. The micro-credit scheme increased the average

income of street vendors in both the localities however their spending patterns differed. In C-

Scheme, several vendors used the finance availed through scheme for capital widening by

purchasing storage facilities while in Mansarovar, more income was spent on necessities. The

YEDC-Scheme is greater than YEDMansarovar for utensils. High income street vendors of C-Scheme

were also able to save a higher propotion of their income than pre scheme. Another benefit of

PMSAVNY was the decline in sick leaves taken as the spending on healthcare increased as

vendors purchased more nutritional food. However, the enrollment decreased in C-Scheme by -

64.29% and in Mansarovar by -72.73% . This is becuase of schools closing or parents being

anxious to send their children to school during pandemic. Additionally, the debt level reduced for

C-Scheme by 1.07% while increased by 0.72% in Mansarovar. The correlation coefficient was in

C-Scheme and in Mansarovar.

Street vendors of Mansarovar would only see an improvement in their living standards in the

short run while street vendors of C-Scheme would enjoy higher living standards for several

years. As research by H.M.W.A Hearth states, it is vital for the government to not just provide

99 “Impact of COVID-19 on Street Vendors in India: Status and Steps for Advocacy | WIEGO.”
[Link], 2020, [Link]/impact-covid-19-street-vendors-india-status-and-steps-
advocacy. Accessed 9 Feb. 2023.

35
micro-credit loans facilities, but rather also focus on providing financial literacy to make street

vendors financially sound decisions100.

However, there are few limitations of this study due to personal or political bias of street vendors

and Municipality heads. Further, the study on health expenditure is impacted by factors such as

beneficiaries not able to go to hospitals which started to only carter COVID-19 patients at the

height of the pandemic. Additionally, several schools were ordered to be shut by the government

thus impacting the education expenditure analysis.

Therefore, after exploring the research question, ““To what extent is the Pradhan Mantri

SAVNidhi scheme being effective in improving the living standards in terms of increase in

their income and change in the consumption, health and education expenditure and debt

level of the street vendors of Jaipur from 2021 to 2022?” It can be stated that in both the

localities, the highest impact has been felt on income and debt levels rather than health and

education levels. In the long run, micro-credit facilities would without a doubt help poor people

and lower in the suicides rate throughout the country.

100 Herath, H.M.W.A. “MICROFINANCE Theory and Practice.” ResearchGate, S. Godage & Brothers (Pvt) Ltd,
661/675, P. de S. Kularathe Mawatha, Colombo 10, Sri Lanka, 12 Sept. 2018,
[Link]/publication/335757487_MICROFINANCE_Theory_and_Practice. Accessed 24 Jan. 2023.

36
Bibliography

Books
● "D4r5w9_The_Economics_of_Microfinance-_2nd.pdf". 2023
[Link]
rces/onlineBook/d4r5w9_The_Economics_of_Microfinan ce-_2nd.pdf. Accessed 31 January
2023.
● "Microsoft Word - Yunus". 2023
[Link] .pdf. Accessed 31 January 2023.
● "Microsoft Word - 03. Winfried [Link]". 2023
[Link] Accessed 31 January 2023.

Websites:
●

37
 Appendices

Appendix 1: General questionnaire given to the beneficiaries of

C-Scheme and Mansorovar

To the respondent,

The goal of conducting this survey is to collect information about the indicators and variables

that have changed due to the implementation of the PMSAVNY. This information will only be

used for academic intentions only and all data will be kept confidential.

We are grateful for your cooperation

Name: ___________________

Age: ___________________

38
No. of family members: ___________________

No. of children: ___________________

Education status: ___________________

Bank account linked with your Aadhar/Mobile number? Yes _____ No _____

Please answer the following questions in the context of your individual situation before and after

the implementation of the PMSAVN scheme.

Questions Pre PMSAVNY Post PMSAVNY

What was your annual

income?

What was your annual

savings if any?

What was your yearly

expenditure on healthcare?

What was your annual debt if

any?

39
Appendix 2: Sample Response 1

To the respondent,

The goal of conducting this survey is to collect information about the indicators and variables

that have changed due to the implementation of the PMSAVNY. This information will only be

used for academic intentions only and all data will be kept confidential.

We are grateful for your cooperation

Name: ____Rajesh__Jothia_____________

Age: __________24_________

No. of family members: ______5_____________

No. of children: ________2___________

40
Education status: __________5_________

Bank account linked with your Aadhar/Mobile number? Yes __✓___ No _____

Please answer the following questions in the context of your individual situation before and after

the implementation of the PMSAVN scheme.

Questions Pre PMSAVNY Post PMSAVNY

What was your annual ₹19,958 ₹24,203

income?

What was your annual 1.82% 1.89%

savings if any?

What was your yearly ₹500 ₹1,062

expenditure on healthcare?

What was your annual debt if ₹4,070 ₹4,000

any?

41
Appendix 3: Sample Response 2

General questionnaire given to the beneficiaries of C-Scheme and Mansorovar

To the respondent,

The goal of conducting this survey is to collect information about the indicators and variables

that been chagned du to the implementation of the PMSAVNY. This infomation will only be

used for academic intentions only and the all data will be kept confidential.

We are grateful for your co-operation

Name: _____Kanish__Napur_______

Age: ________31___________

No. of family members: ________5___________

42
No. of children: _______3____________

Education status: _______4 _____

Bank account linked with your Aadhar/Mobile number? Yes __✓___ No _____

Please answer the following questions in the context of your individual situation before and after

the implementation of the PMSAVN scheme.

Questions Pre PMSAVNY Post PMSAVNY

What was your annual 53344 64600

income?

What was your annual 1.71% 1.78%

savings if any?

What was your yearly ₹1,000 ₹4,019

expenditure on healthcare?

What was your annual debt if ₹2,000 ₹1,970

any?

43
APPENDIX 4: Collected data on street vendors of C-Scheme

Respondent no. Age No. of family Education status No. years

members (years of working as a

schooling) street vendor

1 31 4 1 19

2 23 3 2 4

3 28 2 1 6

4 20 1 1 13

5 20 2 1 15

6 32 2 4 4

44
7 27 3 5 19

8 23 4 4 19

9 31 2 3 6

10 26 1 5 4

11 35 4 4 13

12 38 2 2 6

13 21 0 3 17

14 31 2 3 1

15 32 3 2 2

16 22 2 1 15

17 21 0 4 19

18 34 3 5 20

19 31 4 4 7

20 28 3 2 21

21 20 3 1 17

22 30 4 3 12

23 24 4 4 1

45
24 40 0 2 9

25 30 1 2 5

26 26 1 4 8

27 31 2 2 21

28 33 3 2 17

29 34 4 3 6

30 18 1 1 6

46
APPENDIX 5: Colleted data on street vendors of C-Scheme

Respondent no. Age No. of family Education status No. of years

members (years of working as a

schooling) street vendor

1 21 5 2 6

2 30 4 5 4

3 36 2 4 9

4 27 5 5 16

5 38 4 3 8

47
6 36 3 1 1

7 18 3 1 8

8 33 1 4 15

9 22 2 1 3

10 37 1 4 9

11 34 1 2 14

12 31 1 3 16

13 30 2 4 11

14 31 2 4 7

15 20 3 5 14

16 40 5 4 7

17 29 2 5 4

18 40 3 4 13

19 29 5 5 20

20 40 2 1 1

21 23 0 5 15

22 38 5 1 6

48
23 30 0 1 19

24 39 0 5 13

25 22 5 1 7

26 22 0 3 6

27 25 4 5 4

28 40 0 5 15

29 23 4 1 4

30 40 4 1 6

49
Appendix 6: Income of the beneficiaries in C-Scheme

Income Group Beneficiary Before After Change

Number

Low Income 1 22005 24145 2140

Group
2 18004 24771 6767

3 21509 24750 3241

4 19500 23950 4450

5 20608 24202 3594

6 18803 24550 5747

7 20010 24912 4902

50
 8 21007 24250 3243

9 18500 24611 6111

10 19306 24850 5544

11 21202 24300 3098

12 18900 24653 5753

13 20900 22004 1104

14 18611 24356 5745

15 19834 24756 4922

16 18101 24605 6504

Middle Income 17 58511 64019 5508

Group
18 56900 62000 5100

19 58700 66000 7300

20 57421 71000 13579

21 58134 67032 8898

22 57915 68048 10133

23 58600 68801 10201

24 57300 68000 10700

51
 25 58119 68099 9980

26 54900 65741 10841

High Income 27 102121 109250 7129

Group
28 102079 109215 7136

29 102300 109285 6985

30 101908 109238 7330

Appendix 6: Income of the beneficiaries in Mansarovar

Income Groups Beneficiary After Change

Number Before

Low Income 1 20001 25005 5004

group
2 19507 25600 6093

3 19855 25506 5651

4 20206 26004 5798

5 19600 24700 5100

6 20100 25300 5200

52
 7 19702 25255 5553

8 19958 24203 4245

9 20050 27007 6957

10 19403 24500 5097

11 19800 25100 5300

12 20309 24908 4599

13 19500 25000 5500

14 19950 24601 4651

15 20250 25200 4950

16 19605 26000 6395

17 19850 25102 5252

18 18004 24509 6505

19 18650 25604 6954

Middle Income 20 56746 72081 15335

group
21 56343 61050 4707

22 55519 64123 8604

23 54843 59983 5140

53
 24 54845 66130 11285

25 56940 59945 3005

26 53344 64600 11256

27 53980 56608 2628

High Income 28 84011 110001 25990

group
29 125012 101008 -24004

30 90977 106991 16014

Appendix 7: Average Change in income in C-Scheme and

Mansarovar in (%)

Avg Change in

Income (%) per

person in C Scheme 23% 16% 7% 15.33%

Avg Change in

Income (%) per

28% 14% 6% 16%
person in

54
Mansarovar

Appendix 8: Average Change in income in C-Scheme and

Mansarovar in (₹)

Avg Change

in Income(₹)

per person in

C Scheme 4,554 9,224 7,147

Avg Change

in Income (₹)

per person in

Mansarovar 5,516 7,745 6,000

Appendix 9: Expenditure on consumer durable goods by

Mansarovar street vendors

Durables purchased Before the scheme After the scheme

55
Gas stove 23 24

Light bulbs 22 18

Utensils 17 23

Appendix 10: Expenditure on consumer durable goods by C-

Scheme street vendors

Durables purchased Before the scheme After the scheme

Gas stove 23 24

Light bulbs 25 38

Utensils 17 12

Appendix 11: High Income group savings pre and post scheme

in C-Scheme

Average Savings pre- PMSAVNY 1.78%

High Income Group of C-Scheme Average Saving post PMSAVNY 2.02%

56
Appendix 12: Change in Income vs Change in Expenditure on

food in C-Scheme

Income Groups Beneficiary Number Change in

Expenditure on

Change in Income healthcare

Low Income group 1 2140 3019

2 6767 3980

3 3241 3657

4 4450 2601

5 3594 1123

6 5747 562

7 4902 780

8 3243 115

9 6111 102

10 5544 190

11 3098 256

57
 12 5753 780

13 1104 780

14 5745 475

15 4922 195

16 6504 276

17 5508 132

18 5100 501

19 7300 -56

Middle Income group 20 13579 -20

21 8898 -13

22 10133 -1000

23 10201 -1295

24 10700 0

25 9980 -44

26 10841 -772

27 7129 -2562

High Income group 28 7136 -2690

58
 29 6985 -3104

30 7330 -3701

Average change in Average Change in

income Expenditure

Low Income Group 4554 1181

Middle Income Group 9224 -257

High Income Group 7147 -3014

59
Appendix 13: Change in Income vs Change in Expenditure on

food in Mansarovar

Income Groups Beneficiary Number Change in

Expenditure on

Change in Income healthcare

Low Income group 1

5004 5019

2
6093 4980

3
5651 4657

4
5798 6601

5
5100 5123

6 5200 2562

60
 7
5553 3195

8
4245 1115

9
6957 2760

10
5097 2893

11
5300 3000

12
4599 1913

13
5500 1766

14
4651 1088

15
4950 1300

16
6395 780

17
5252 900

18
6505 -31

19
6954 -56

Middle Income group 20

15335 -336

21
4707 -762

22
8604 -169

23
5140 -280

61
 24
11285 -525

25
3005 289

26
11256 690

27
2628 -1622

High Income group 28

25990 -1684

29
-24004 -1207

30
16014 -2112

Average change in income Average Change in Expenditure

Low Income Group 5516 2609

Middle Income group 7745 -339

High Income group 6000 -1668

62
Appendix 14: Number of sick leaves taken

No. of sick leaves taken

Before the scheme After the scheme

C-Scheme
28 20
Mansorovar
35 27

63
Appendix 15: Enrollment pre and post scheme

Number of children enrolled in a school

Before scheme After scheme
C-Scheme 14 4
Mansorovar 11 3

64
65
Appendix 16: Indebtedness level in C-Scheme and Mansarovar

pre and post scheme

Indebtnes pre Indebtnes post Indebtnes pre Indebtnes post

policy of C- policy of C- policy of policy of
Avg Annual Income Scheme Scheme Mansarovar Mansarovar
10,000 2000 1570 2100 1980
20,000 3000 2710 3050 2970
30,000 4000 4100 4070 4000
40,000 5000 6000 5100 4790
50,000 8000 7890 6900 7810
60,000 7800 7700 7890 7510
70,000 7000 7000 6900 6550
80,000 6800 6700 6800 6099
90,000 6500 6500 6520 6430
100,000 6000 4990 5060 5990

66
Appendix 17: C-Scheme interview

1. What has been the overall impact of PMSNY till now?

I would say that we had benefited tremendously from the scheme during the peak of pandemic

where no income led to many of us starving for days at stretch. We don’t have enough savings

for spending on expenditures for health and education. My child missed 2 years of schooling

because it was difficult to pay for tuition with no earnings from my business. Furthermore, I was

unable to pay for the rising healthcare expenses so in the middle of the pandemic I took a loan.

With the 10,000 that I received, I was able to pay off my loan.

2. How effective has this government initiative been so far?

Speaking for myself I would say I am really grateful for the scheme. However, I do sense some

disappointment with my other friends. Many were not able to receive the loan because because

of corruption, red tapism and racisim towards certain castes. They said their munipalty was

biased and only selected, relatively high income earning individuals that might help them win

elections, were given loans. So although for a great purpose, I do not think the implementation of

the scheme was done well. I was lucky to be able to receive the loan fairly quickly but I know I

do not fall in the majority here.

3. After receiving the government’s sanctioned funds, how have you allocated them to

67
achieve the plan’s objectives?

Firstly, with all the collected money, I paid off my debt which was a huge relief for me and my

family. I feel much less mental stress now and happiner in my position. With the amount due, I

was able to buy a new wooden stall costing about 1,200. This new stall honestly has been a great

decision for me because it doesn’t break often like my previous stall used to and thus I have seen

greater geographical mobility and my productivity has increased too because this wood material

is much lighter than the one I used to use so I am able to do everything at a faster rate. Also the

cheap quality wooden cart that I had previously would often get infected by pests which would

prevent me from working for a few days.

4. What development was seen in the village after the implementation of this scheme?

With this new amount, several new groups were formed where each member could contribute

some amount of money for the rent of a storage facility. With that, we were able to not only

eradicate the problem of not being able to buy in bulk and receive those big discounts but also

we have less stress as to where to keep our fruits and vegetables if they aren’t sold. Previously I

used to keep them at my house but there was always a chance of them getting mixed in home

fruits and vegetables and that would have affected the quality of goods I sold. Furthermore, this

has built in a sense of brotherhood in us and I personally have seen people’s attitude change

towards me, like there was an aspect of intense competition before where if one would decrease

the price of coconut for example, all of them would do too. This made making profit largely

impossible. However, now since everyone is in a tough situation, mainly the middle and low

income group, we support each other and no longer get into price wars which ultimately would

be financially very damaging to all of us.

68
5. According to you, have you started to save more since the enactment of the scheme?

I certainly have saved a little more money since the enactment of the scheme. There were 2 main

reasons for that. First, because I had a little extra money, I was ofcourse able to a save a little

more too but the most important reason would be that since pandemic, people like me had lost

their jobs and we never know when it would start again so atleast I have taken a more of a

restrictive approach in spending my money. However, still whatever I save isn’t sufficient for me

to sustain on if any special circumstances like pandemic again begin. Thus, I would like if

government gave more money to low income group street vendors like me.

7. Have there been any instance that you know of where someone committed suicuide?

How do you think this scheme helps reduce that problem?

Sadly I do know the truth of several people commiting suiside. 2 people just last year had

suicided. It becomes very hard to survice with practically no saving and no income at the same

time so I am very thankful for the scheme. I believe that the reason of their suicides was the

unability of pay off debt they took. I knew them personally and I could tell that their financial

situation was extremely difficult. More money was required by the government to be sent to

people at the very bottom of poverty line to prevent them from taking such steps.

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Appendix 18: Muncipalty Interview

1. How difficult was it for you to survive on your income before you availed this scheme?

Extremely tough! Without money, there is no livelihood. I couldn’t even afford my 2nd son’s

school fees so he didn’t go to school last year. It’s difficult to ask family members too for loans

because it is rather taken as something embarrassing. Family pressure to keep the livehood of

myself and my childs stable is also very hard to handle. This really has taken a toll on my mental

health.

[Link] do street vendors fall into the poverty trap?

Most of the vendors end up using this new loan to pay back their previous loans. This means

they are stuck in a vicious cycle where whatever they take on loan, most of it isn’t used to

increase in their productivity. However, though careful financial management, this cycle could

certainly be broken.

3. What methods did you previously used to obtain credit loans?

Loans were largely unavailable to poor people like us. Firstly, when I went to bank, I was met

with discrimaination as I no one would take my inquiry and I myself didn’t understand the whole

process because my I didn’t go to school. That is the reason I have sent all my children to school

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and not compromise on education at all. Coming back, even if I tried getting a loan, bank

wouldn’t give it as they wouldn’t trust me for repayment. So the only method for me was to ask

my friends and family for giving me a loan. But even that loan were small, and never above

5,000 rupees. So 10,000 rupees has been huge for me for now.

4. Street vendors of which social condition are benefitting the most from this scheme?

I would say low income group street vendors have benefited the most because high income street

vendors still could get a loan from bank unlike us. However, all have benefited in general.

5. What changes do you suggest for the scheme

I believe that there is unequal benefits been given. For example, my friend, who sells flowers by

the side has low cost of production, whereas me, who sells foods has high cost of production as I

have to buy more raw materials, hire 1 person if demand is more, and just overall have more

work. But he and I still get the same amount of money. Rather I should get more because I need

more of it to genuinely restart my business.(can talk about human bias here)

6. What do you think about the digitized economy and using QR codes. Are you alright and

willing to understand more about technology if it would boost your sales a lot

I don’t really understand that because I haven’t ever been introduced to technology. I just know

that people would come and scan the QR code and somehow I would get money. However, I

don’t trust this because I don’t understand the process of it and I believe someone with better

knowledge of it than me would misuse it. I like traditional way of buying, that is through notes

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and coins. I haven’t used it till now but I am considering using it because of the benefits it would

give me.

7. Do you think the micr-credit was sufficient to support all the street vendors?

I would appreciate the government’s initiative but would disagree that the micro-credit scheme

provided enough financial support especially to low income street vendors. Even though most

were able to avail full 10,000 rupees of the scheme, yet while talking to them few times, I

realized that it wasn’t enough to substantially increase their living standards.

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