According to a recent sample survey orchestrated by the Ministry of Labour and Employment (MoLE), the Pradhan Mantri Mudra Yojana (PMMY) has been instrumental in generating approximately 1.12 crore net additional jobs over a span of three years, between 2015 to 2018.
Highlights from the Survey
The survey indicated that 81 lakh loans were granted in the state of Rajasthan during the last three financial years, out of which over 52 lakh were allocated to women entrepreneurs, accounting for approximately 64% of all loans in Rajasthan.
Evolution of PMMY
The scope of PMMY has gradually expanded over the years. In the financial year of 2016-17, the scheme embraced activities linked to the agricultural sector, such as fishing, dairy, and food processing. A year later, in 2017-18, tractors and power tillers became eligible for loans under PMMY with a maximum limit of Rs. 10 lakhs. Starting from 2018-19, loans for commercial use of two-wheelers were also included in the scope of PMMY.
In-depth Analysis of Pradhan Mantri Mudra Yojana
Launched by the Government of India in 2015, PMMY was designed to offer collateral-free institutional loans up to Rs. 10 lakhs for small business enterprises. Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs), and Micro Finance Institutions (MFIs) are the Member Lending Institutions (MLIs) providing these funds.
The loans can be utilized for income-generating activities in various sectors including manufacturing, trading, services, and agriculture. PMMY offers three types of loan products: Shishu (loans up to Rs. 50,000), Kishore (loans between Rs. 50,000 and Rs. 5 lakh), and Tarun (loans between Rs. 5 lakh and Rs. 10 lakh).
Key Steps Taken for Scheme Improvement
Several steps have been taken to improve the functioning of the PMMY scheme. The introduction of online applications through the Udyamimitra portal has streamlined the application process. Certain Public Sector Banks (PSBs) have implemented end-to-end digital lending for automated sanctions under PMMY, making the process more efficient.
Intensive publicity campaigns have been launched by PSBs and Mudra Ltd to increase awareness about the scheme among stakeholders. Additionally, Mudra Nodal Officers have been appointed in PSBs to ensure smooth implementation of the scheme.
Understanding the Objective of PMMY
As highlighted in a previous UPSC Civil Services Examination, the primary aim of Pradhan Mantri MUDRA Yojana is to integrate small entrepreneurs into the formal financial system. This understanding emphasizes the transformative potential of the scheme as it is designed to give financial empowerment to small enterprises, which are often overlooked by traditional banking systems.
