Generating Self-employment

NEW DELHI: Hailing the MUDRA yojana for enabling entrepreneurship in the country, Prime Minister Narendra Modi said about eight crore youngsters have become entrepreneurs for the first time with the help of these loans.

So far, over 38 crore Mudra loans have been given across the country with the “maximum share of women and young friends belonging to SC/ST/OBC classes,” he said Addressing a Rozgar Mela in Uttarakhand, PM Modi said, “MUDRA yojana is helping a lot in boosting employment and self-employment in tourism. Under this scheme, those engaged in businesses like shops, dhabas, guest houses, and homestays are getting loans up to Rs 10 lakh without guarantee.”

Among flagship schemes

The PMMY is one of the flagship schemes of the Union Government to encourage self-employment. The scheme targets micro and own-account enterprises that constitute a vibrant business ecosystem in India. Micro enterprises are mostly engaged in manufacturing, processing, trading and services and many of these units are single-ownership businesses.

As per the results of a large sample survey conducted at the national level by Ministry of Labour and Employment to assess employment generation under the Pradhan Mantri Mudra Yojana (PMMY), the scheme helped in generating 1.12 crore net additional employment during a period of approximately three years (from 2015 to 2018). This was stated by Union Minister of State for Finance Bhagwat Kisanrao Karad in a written reply to a question in the Lok Sabha recently.

He said out of the total 81 lakh loans extended in the state of Rajasthan, more than 52 lakh loans have been extended to women entrepreneurs in the last three financial years. This amounts to 64 per cent of loans to the women.

Coordination with banks

Any matter relating to implementation of PMMY including, delay in turnaround-time (TAT), turning down of loan applications and lenders insistence on collateral/ guarantor on certain occasions are redressed in coordination with the respective banks, the minister stated. The scheme is reviewed from time to time and its scope and coverage has been extended as stated below:

• In FY 2016-17, activities allied to agriculture, viz; pisciculture, beekeeping, poultry, livestock rearing, grading, sorting, aggregation agro industries, diary, fishery, agri-clinics and agribusiness centres, food and agro-processing, etc (excluding crop loans, land improvement such as canals, irrigation, wells) and services supporting these, which promote livelihood or are income generating were brought under the ambit of PMMY.
• Since FY 2017-18, loans sanctioned for purchase for tractors and power tillers are included as eligible loans under PMMY, subject to the upper ceiling of Rs. 10 lakh.
• Further, from 2018-19 onwards, loans sanctioned for purchase of two-wheelers by individuals for commercial purpose have also been included under PMMY.

Income-generating work

Under the PMMY, collateralfree institutional credit up to Rs. 10 lakh is provided by Member Lending Institutions (MLIs) i.e. Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs).

Any individual, who is otherwise eligible to take a loan and has a business plan for small business enterprise can avail loan under the scheme. S/he can avail the loans for income-generating activities in the manufacturing, trading, services sector and also for activities allied to agriculture across three loan products, viz. Shishu (loans up to Rs. 50,000), Kishore (loans above Rs. 50,000 and up to Rs. 5 lakh) and Tarun (loans above Rs. 5 lakh and up to Rs. 10 lakh).