Loans categorised as Mudra loans have been one of the big talking points of the Narendra Modi government. It has repeatedly said that loans under the Pradhan Mantri Mudra Yojana have led to large scale job creation, but no data has been provided to substantiate the claim.
A recent answer to a question raised in the Lok Sabha, along with the reading of the annual reports of the Micro Units Development & Refinance Agency (Mudra) Ltd, punches holes in the claim of Mudra loans creating jobs. These loans are basically a classification: Loans of up to ₹10 lakh, given by banks (public and private sectors), small finance banks, regional rural banks, cooperative banks, microfinance institutions and non-banking finance companies to non-corporate, non-farm, small and micro enterprises, are categorised as Mudra loans.
There are three further sub categorisations: Shishu (up to ₹50,000), Kishore (above ₹50,000 and up to ₹5 lakh) and Tarun (above ₹5 lakh and up to ₹10 lakh).
The accompanying table shows:
1. In the current financial year, Shishu loans formed around 89 percent of the loans categorised as Mudra loans. Between 2015-2016 and now, Shishu loans have formed 89 to 93 percent of Mudra loans.
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(This story appears in the 01 February, 2019 issue of Forbes India. To visit our Archives, click here.)