Urban local bodies are central to the success of centrally sponsored/sector schemes targeting the informal sector. Discuss with reference to PM SVANidhi.

PM SVANidhi, launched on 1 June 2020, is India's first micro-credit scheme exclusively for street vendors, and its implementation is the joint responsibility of the Ministry of Housing & Urban Affairs and the Department of Financial Services [2]. Since urban informal workers are reachable only through the city government, urban local bodies (ULBs) form the delivery spine of such schemes.

Why ULBs are central to delivery

• Identification and certification: ULBs, through Town Vending Committees under the Street Vendors Act, 2014, issue vending certificates and letters of recommendation — the entry gate to a collateral-free SVANidhi loan [4].
• Last-mile mobilisation: nationwide Lok Kalyan Melas organised across ULBs between 17 September and 15 October 2025 mobilised vendors and accelerated loan sanction and digital onboarding [1].
• Digital inclusion: ULBs onboard vendors onto UPI and the new UPI-linked RuPay Credit Card (₹30,000 limit) with digital cashback up to ₹1,600, embedding them in formal payment rails [3].
• Scale achieved: over 1 crore loans worth about ₹17,115 crore have been disbursed, an outcome impossible without municipal ground machinery [4].

Constraints that limit ULB effectiveness

• Capacity deficit: the restructured scheme extends coverage to census towns and peri-urban areas, adding load on ULBs with weak staffing and finances [2].
• Coordination burden: outcomes depend on ULB–bank convergence, since credit delivery rests with DFS-linked banks, not the municipality [2].
• Enumeration gaps: mobile and seasonal vendors escape municipal surveys, leaving the most vulnerable outside the tranche ladder of ₹15,000–₹25,000–₹50,000 [2].

Thus ULBs are less an implementing agency than the hinge on which informal-sector schemes turn. Strengthening them — through dedicated SVANidhi cells, periodic re-surveys, and untied funds under the 74th Amendment's devolution mandate — would help the scheme meet its target of 1.15 crore beneficiaries by 2030 [3], advancing inclusive urban growth.