Launched with much fanfare in 2023, the PM Vishwakarma scheme was envisioned as a flagship initiative to uplift artisans in India’s informal sector through skill development, financial support, and access to markets. Yet, over a year into its rollout, the scheme is grappling with a critical bottleneck: a dismal loan approval rate from public sector banks.
Out of nearly 14 lakh loan applications submitted under the scheme, only about 3.9 lakh—or 28%—have been sanctioned so far. The rest have either been rejected due to eligibility concerns, mismatched loan purposes, and inadequate documentation, or were declined by the applicants themselves. Over 1.58 lakh artisans reportedly turned down the loans, further complicating the scheme’s execution. One of the key hurdles is that many applicants have prior loan defaults or non-performing assets (NPAs) on their records, making them high-risk candidates in the eyes of lenders.
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This high rejection rate has drawn criticism and sparked calls for a review of the screening process. Observers argue that the very individuals who need financial assistance the most—those with weak credit histories—are being left out, undercutting the scheme’s purpose.
What the Vishwakarma Scheme Aims to Achieve
The PM Vishwakarma Yojana was launched to support workers engaged in 18 traditional trades such as blacksmithing, goldsmithing, pottery, carpentry, and sculpting. Backed by a ₹13,000 crore outlay for the 2023–2028 period, the scheme is fully funded by the central government.
Its approach is multi-pronged: it seeks to preserve India’s rich artisan heritage by enabling craftsmen to upgrade their skills, access modern tools, and improve the quality and productivity of their output. In addition to training, it offers collateral-free loans, incentives for digital transactions, and financial literacy initiatives. The scheme also aims to enhance market linkages through e-commerce platforms, branding initiatives, and participation in trade fairs—critical steps in connecting rural artisans with domestic and international buyers.
Any self-employed individual aged 18 or above, engaged in traditional family-based trades within the unorganised sector, is eligible to apply.
Lost in Translation: A Vision Hindered by Execution
When announced, the scheme was hailed as a long-overdue intervention to preserve India’s dying crafts and support the livelihood of millions of artisans. In a world rapidly moving toward mechanisation, many traditional art forms struggle to survive. One such example is Abdul Aziz Kozgar, believed to be Kashmir’s last traditional rose water maker. Operating a century-old shop in Srinagar, Kozgar carries forward a craft his family brought from Turkey over 400 years ago. But the proliferation of synthetic alternatives and political instability have placed his trade on the brink of extinction.
Initiative like PM Vishwakarma scheme offer a ray of hope for such artisans. But despite its noble goals, a wide implementation gap threatens to dilute its impact.
The core issue lies in the financial eligibility framework. The scheme appears geared toward applicants with relatively stable financial records—individuals who may not be in urgent need of a loan. Conversely, those who genuinely require assistance are being screened out due to poor credit scores or unresolved past loans. While risk management is understandable, it raises a fundamental question: should a welfare scheme aimed at empowering the informal sector be operating with the same caution as a commercial loan product?
Experts argue that every rejected application should be escalated beyond the branch level for further review. Mechanisms must be instituted to re-engage with declined applicants and identify pathways to support them, rather than letting them fall through the cracks.
Regional Disparities and Market Barriers
Another pressing concern is the scheme’s uneven uptake across states. Registration numbers remain particularly low in northern and eastern India, hinting at either poor outreach or low awareness levels. Tailored awareness campaigns and region-specific implementation strategies are urgently needed to address this imbalance.
Moreover, rural artisans continue to face structural barriers in accessing urban and international markets. Without stronger distribution channels, branding support, and buyer networks, many are unable to command fair prices or expand their customer base.
Policy Tweaks in the Works
In response to these challenges, the government is considering operational refinements. These include capturing more granular data from public sector banks through the scheme’s portal—such as loan disbursement dates, NPA status, and closure records—to improve oversight. Faster processing of interest subvention and credit guarantee claims is also under discussion, along with measures to streamline the treatment of declined applications.
Officials remain optimistic that these adjustments will make the scheme more responsive and inclusive. But optimism alone won’t bridge the gap. For the PM Vishwakarma scheme to truly succeed, it must recalibrate its priorities: from exclusionary screening practices to inclusion-driven facilitation; from uneven outreach to grassroots awareness; from vision documents to verifiable outcomes.
India’s traditional crafts are not just remnants of the past—they are living legacies, repositories of culture, and engines of rural employment. To ensure they do not fade into oblivion, policy must align more closely with the lived realities of the artisans it seeks to serve.