Modi’s Claim of Job Creation Via Mudra Unlikely- Average Size Of 90% Loans is INR 22,766
The Modi govt has reportedly pushed the release of the Mudra jobs data report to after the Lok Sabha polls.
Pradhan Mantri Mudra Yojana, under which the Narendra Modi govt set up the Micro Units Development and Refinance Agency Bank in 2015 to facilitate credit to MSMEs, is used by the government to make tall claims of creating jobs. The logic behind the claims is that entrepreneurs are availing credit to run businesses, which in turn employ people.
However, the claim is extremely suspect if one looks at the loans given under the scheme. Per the annual report (2017-18) published on the Mudra website, in the last three financial years, for 90% of these loans, the average loan size is less than Rs 23,000.
Under the scheme, three kinds of loans are provided — Shishu (up to Rs 50,000), Kishore (above Rs 50,000 and up to Rs 5 lakh) and Tarun (Above 5 lakh and upto Rs 10 lakh).
For three financial years—2015-16, 2016-17 and 2017-18 — 90 per cent (11.1 crore) of all loan accounts (12.3 crore) were in the Shishu category. Shishu Loans worth 2.53 lakh crore were sanctioned in this period, which means the average size of these loans is Rs 22,766. Here is a detailed break-up:
How many jobs can one create with such a small amount?
In his latest interview, Prime Minister Narendra Modi claimed that under the scheme, approximately 15-17 crore people got loans. He reportedly added, “They must have started some kind of employment.” However, considering the meagre size of most of these loans, how much employment can one generate, if at all?
Earlier this month, The Indian Express had reported that the Modi Govt would not release the report on jobs created under the scheme, compiled by the Labour bureau, before the Lok Sabha elections.
Citing data for 2017-18, Congress leader Jairam Ramesh in his press conference held on Saturday, March 30, said “In 2017-18, close to 90% of the loans had an average size of Rs 24,840. This is completely inadequate for even one job, let alone 2-5 as claimed by the Prime Minister,” reported PTI.