Discuss the importance of post-establishment handholding for the survival of micro-enterprises created through subsidy schemes.

Subsidy schemes like the Prime Minister's Employment Generation Programme (PMEGP) have helped set up over 8.38 lakh micro-enterprises since 2014-15 [1]. A subsidy only starts a unit. Whether the unit survives depends on post-establishment handholding, meaning mentoring, market linkage, credit follow-up and monitoring.

Why subsidy-created units are fragile

• First-generation entrepreneurs: Many beneficiaries have no credit history. Banks reject about 40–50% of PMEGP applications, relying heavily on CIBIL scores [2].
• Weak projects: Banks crowd sanctions into the last quarter of the year. Weak projects get through and NPAs are likely to rise [3].
• Unmonitored attrition: The CAG flagged poor monitoring and a backlog in physical verification, so failing units go unnoticed [4].

How handholding sustains enterprises

• Capacity building: Training in accounts, compliance and digital payments cuts early-stage mistakes.
• Market linkage: Links to buyers, exhibitions and e-marketplaces turn output into revenue. PMEGP's handholding component already covers market linkage [1].
• Credit continuity: Regular follow-up lets banks spot early stress and restructure loans before they turn into NPAs [3].
• Scaling up: Units that perform well can graduate to the second loan of up to ₹1 crore [5]. The PAC found weak demand for this loan [3], which suggests that units without follow-up stay small.
• Accountability: Under the KVIC–Department of Posts MoU (2024), India Post staff verify a unit before the next instalment is released [6].

Gaps and way forward

• Verification is mandatory only for the first three years. The PAC has recommended tracking units beyond that [3].
• KVIC should publish survival rates at three and five years. Then "jobs created", such as the 1.02 lakh expected from the October 2026 tranche [1], becomes a measured result rather than a sanction-time estimate.
• First-time borrowers should be assessed on the merit of the project, backed by mentoring, not on CIBIL scores alone [2].
• Mentoring networks should be shared across DAY-NRLM, MUDRA and SFURTI.

Handholding turns a one-time subsidy into a lasting livelihood, protecting both public money and the entrepreneur. A design that rewards units that survive, not just sanctions, would make PMEGP a real driver of inclusive non-farm growth. This supports SDG 8 (decent work) and the right to work under Article 41.