Mudra loans led to a 28% rise in jobs

After taking benefit of the scheme, jobs increased by around 11 mn in establishments that took loans.

Loans availed through the Pradhan Mantri Mudra Yojana (PMMY), also known as Mudra loans, led to a 28 per cent rise in jobs generated by establishments which had taken benefit of the scheme, according to an official survey conducted by the government.

The report on PM Mudra Yojana, prepared by the Labour Bureau under the Ministry of Labour and Employment, showed that around 39.3 million people were employed in establishments prior to availing Mudra loans, which increased to 50.4 million after these took benefit of the scheme.

The PMMY was launched in April 2015 to give unsecured loans of up to Rs 10 lakh, with the objective of boosting self-employment.

As a result, a total of 11.2 million new jobs, 55 per cent of which accounted for self-employment, were created through Mudra loans between 2015 and 2018, the survey report showed.

Mudra loans led to the creation of 5.1 million new entrepreneurs - much below the government’s estimates.

Prime Minister Narendra Modi had said in Parliament in February that 42.5 million new entrepreneurs availed Mudra loans leading to job creation.

The labour ministry had constituted an expert committee, led by principal labour and employment advisor B N Nanda, to help design and conduct a survey on employment generation in all non-farm economic activities under PMMY.

The report, which has been approved by Labour and Employment Minister Santosh Kumar Gangwar and will be made public shortly, surveyed around 94,000 beneficiaries between April and November 2018.

According to sources, the government had withheld the release of the report, which was slated to be made public before the Lok Sabha election results, as the results of the survey were “below expectations.”

The government is set to release the survey reports after “thorough re-validation,” the source said.

The report has thrown some important trends related to Mudra loans.

Only one-fifth of the beneficiaries (20.6 per cent) who took Mudra loans utilised the money towards setting up a new establishment and the remaining used it to expand their existing businesses.

Significantly, 89 per cent of beneficiaries found Mudra loans to be sufficient for expanding their business or setting up a new unit and the remaining 11 per cent had to avail loans from other sources, as per the survey report.

Out of the people who found Mudra loans to be insufficient for their business, a majority of them (around 52 per cent) took additional loans “for the same economic activity” from their relatives.

Photograph: PTI Photo