Bridging administrative gaps, easing access to finance and aligning rural development with enterprise growth are imperative if the Northeast is to fully participate in the journey towards a developed and inclusive Bharat by 2047 – Dipak Kurmi
The persistent outmigration of youth from the Northeast underscores a deeper structural weakness in the region’s employment ecosystem, particularly in agriculture and allied sectors. Despite the region’s rich natural resources and cultural diversity, the transition of farming from subsistence-orientated practices to commercially viable enterprises has been slower than expected. As a result, lakhs of young people from farm families are compelled to migrate to other parts of the country in search of employment and alternative livelihoods. Reversing this trend demands not incremental adjustments but a fundamental transformation of the region’s employment landscape, one that integrates enterprise development, infrastructure creation and wage employment into a coherent and opportunity-driven framework.
The Prime Minister’s Employment Generation Programme has long been positioned as a key instrument to promote self-employment and entrepreneurship through the growth of micro, small and medium enterprises. In the context of the Northeast, PMEGP holds particular promise because MSMEs can leverage local resources, traditional skills and niche markets to generate sustainable livelihoods. However, the actual performance of the scheme in the region reveals a troubling gap between potential and outcomes. The Parliamentary Standing Committee on Industry’s observation of a decline in project support under PMEGP since the 2021-22 financial year, especially in Assam, Nagaland, Manipur and Mizoram, highlights the underutilisation of a scheme that could have been a catalyst for employment generation. This decline is not merely a statistical anomaly but an indicator of systemic constraints that discourage aspiring entrepreneurs from accessing institutional support.
The Ministry of MSME has argued that PMEGP is a demand-driven scheme, with project sanction and loan disbursement resting primarily with banks. This position implies that the shortfall in the Northeast reflects weak demand or inadequate initiative from the region itself. Yet the data on margin money subsidy tells a more nuanced story. Over four years, the subsidy allocation to the region increased by only Rs 51 crore, from Rs 180 crore in 2021-22 to Rs 231 crore in 2024-25, despite generous incentives specifically designed to uplift the Northeast. Beneficiaries in rural areas of the region are eligible for a margin money subsidy of 35 per cent, and those in urban areas for 25 per cent, significantly higher than the rates applicable in general category states. The requirement of own contribution has also been reduced to 5 per cent of project cost, compared to 10 per cent elsewhere. These advantages suggest that the issue lies not in the absence of incentives but in the barriers that prevent potential beneficiaries from navigating the system.
Additional provisions under PMEGP further underscore the intent to prioritise the Northeast. Well-performing units in the region can access a second loan tranche of up to Rs 1 crore for expansion, with a subsidy of 20 per cent compared to 15 per cent in other areas. The absence of a ceiling on the number of transport-related projects in the region, unlike the 10 per cent cap elsewhere, reflects an understanding of the Northeast’s unique geographical and logistical challenges. Yet, despite these tailored measures, uptake remains weak, pointing towards deeper administrative and institutional hurdles. Limited banking outreach, connectivity gaps and procedural complexity continue to discourage applicants, particularly first-generation entrepreneurs with limited exposure to formal finance.
The Parliamentary Committee’s critique of the loan application process under PMEGP is therefore timely and well-founded. Extensive scrutiny, especially for small-value loans, leads to delays that sap the enthusiasm of young entrepreneurs. The recommendation to introduce a self-certification mechanism for loan applications up to Rs 10 lakh addresses a critical pain point. Allowing applicants to submit self-certified declarations of eligibility and documentation, combined with random sample testing for transparency, can significantly reduce delays without compromising accountability. Such a reform has the potential to restore confidence among youth who are otherwise deterred by cumbersome paperwork and repeated visits to banks.
Encouragingly, recent administrative steps point in the right direction. Since January 2024, implementing agencies have begun accepting PMEGP applications in physical form across twelve scheduled languages, including Assamese. This move acknowledges linguistic barriers that often marginalise rural entrepreneurs who are less comfortable with English. However, the success of this initiative depends on effective dissemination. Wide publicity about language support is essential to ensure that small and micro enterprises in Assam and other Northeastern states are aware of and confident about accessing the scheme. Similarly, the Ministry’s advisory to the Khadi and Village Industries Commission to explore automation of application scrutiny and implement self-certification for smaller loans reflects an appreciation of ground realities.
The KVIC’s findings that banks rejected applications on invalid grounds in many cases in Assam expose a critical implementation gap that demands urgent correction. When combined with reports of delayed or non-receipt of margin money subsidies and technical glitches in the PMEGP portal, these issues reveal systemic weaknesses that undermine the scheme’s credibility. Addressing them requires not only administrative reform but also sensitisation of banking institutions to the developmental priorities of the region. Without such corrective measures, PMEGP will remain an underperforming instrument in an area where it is most needed.
The sustainability of MSMEs in the Northeast is also closely linked to the availability of raw materials and the strength of agriculture and allied sectors. Enterprises cannot thrive in isolation from their resource base. Boosting agricultural production, promoting value addition and strengthening supply chains are therefore integral to reshaping the employment landscape. States in the region must prioritise PMEGP implementation as part of a broader strategy that links farm-sector growth with enterprise development. Only then can MSMEs emerge as engines of local employment capable of retaining youth within the region.
It is against this backdrop that the introduction of the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025, acquires particular significance for the Northeast. Introduced in the Lok Sabha by Union Minister Shivraj Singh Chouhan, the Bill seeks to establish a rural development framework aligned with the vision of Viksit Bharat @2047. By providing a statutory guarantee of one hundred and twenty-five days of wage employment per rural household, it expands the safety net while aiming to integrate employment generation with asset creation, convergence and saturation. For regions like the Northeast, where wage employment and enterprise development must complement each other, this expanded guarantee offers a crucial buffer against livelihood insecurity.
The Bill’s emphasis on convergence through Viksit Gram Panchayat Plans and their aggregation into a Viksit Bharat National Rural Infrastructure Stack holds promise for addressing regional disparities. Prioritising water security, core rural infrastructure, livelihood-related assets and climate-resilient works aligns well with the Northeast’s developmental needs, particularly in the face of frequent floods, landslides and other extreme weather events. The bottom-up planning approach, supported by spatial technology and integration with PM Gati Shakti, can enable more responsive and coordinated development if implemented with sensitivity to local conditions.
For Northeastern states, the Bill’s 90:10 centre-state funding pattern is especially significant, given their limited fiscal capacity. The provision for normative allocation based on objective parameters, coupled with transparent intrastate distribution, has the potential to reduce regional and intraregional disparities. Robust digital governance mechanisms, weekly disclosures at the Gram Panchayat level and strengthened social audits further reinforce accountability, which is critical for building trust in large-scale programmes.
Ultimately, addressing youth migration from the Northeast requires a multi-layered approach. Wage employment guarantees under VB G RAM G can provide immediate livelihood security, while a revitalised PMEGP can nurture entrepreneurship and long-term job creation. The two frameworks, if effectively converged, can transform the region’s employment landscape from one marked by compulsion-driven migration to one characterised by opportunity and resilience. The challenge lies not in the absence of policy intent but in execution. Bridging administrative gaps, easing access to finance and aligning rural development with enterprise growth are imperative if the Northeast is to fully participate in the journey towards a developed and inclusive Bharat by 2047.
(The writer can be reached at dipakkurmiglpltd@gmail.com.)