BJP leaders have often called the Pradhan Mantri Mudra Yojana (PMMY), launched on April 8, 2015, as the flagship scheme for employment generation in India but the reality on ground seems different. An RTI query has revealed that under this much-touted scheme, over 90 per cent of the loans are small loans (up to Rs 50,000), which, as experts believe, are not enough to create substantial jobs.
The Mudra scheme was aimed at fulfilling Prime Minister Narendra Modi’s 2014 election campaign promise of providing jobs to youngsters. PM Modi had himself said during ‘No Confidence Motion’ brought in by the Opposition that “we gave loans to 13 crore youngsters through the Mudra scheme”. He said this in Parliament recently, while responding to Congress President Rahul Gandhi’s charge that the government has failed to fulfil the promise of creating one crore jobs. IT Minister Ravi Shankar Prasad had also said in November 2017 that the BJP-led government had provided “loan worth Rs 4-lakh crore to 80 million people”. “Even if each employed at least one person, 40 million jobs created automatically”.
During the launch of the programme, Finance Minister Arun Jaitely in his Budget speech in 2015 had said the scheme would provide loans in three categories — up to Rs 50,000 is given under sub-scheme ‘Shishu’; between Rs 50,000 and 5 lakh under the sub-scheme ‘Kishore’; and between 5 lakh and Rs 10 lakh under sub-scheme ‘Tarun’.
Loans taken under the Mudra scheme do not require collaterals as they are aimed at boosting the confidence of small businesses, and young, educated and skilled workers to enable them to become first generation entrepreneurs.
Considering these claims, India Today filed an RTI query to the Department of Financial Services, asking total loans availed and total amount disbursed under the Mudra Scheme to date? Other questions included loans availed up to Rs 50,000; between Rs 50,000 and Rs 1 lakh; Rs 1 lakh and Rs 2 lakh; Rs 2 lakh and Rs 5 lakh; and Rs 5 lakh and Rs 10 lakh. The RTI also sought to know how many people availed loans up to Rs 10 lakh and how many of them had repaid to date?
Interestingly, the RTI reply received on August 8 revealed a majority of such loans, around 93 per cent, fell in the lowest category of Rs 50,000. Nearly 13.5 crore loans have been disbursed so far, of which around 93 per cent (12.2 crore) are ‘Shishu’, which is up to Rs 50,000, said the RTI reply. “Such micro loans are only useful for small businesses like single cattle dairy farmers or some ‘thala wala’ but it will not be sufficient to create substantial employment,” Economist Ajit Ranade said.
Also, over 1.4 crore loans disbursed under the Mudra scheme were between Rs 50,000 and Rs 5 lakh (Kishore category) and over 19.6 lakh loans were over the size of Rs 5 lakh. This means that the ‘sizable loans’ only formed 1.45 per cent of the total loans given under the scheme. The department of finance, however, chose not reveal the number of individuals who received the maximum Rs 10-lakh loans under the scheme. Also, no data was revealed regarding total money disbursed and loans repaid.