The government’s constant refrain has been that its flagship Mudra scheme is an engine for entrepreneurship and employment. A survey by the Labour Ministry, yet to be made public, offers a reality check: just one out of five beneficiaries (20.6 per cent) from the sample survey availed of Mudra loan for setting up a new establishment, the rest used the funds for expanding their existing business.
The Draft Report on Pradhan Mantri Mudra Yojana Survey conducted by the Labour Bureau under the Ministry of Labour and Employment has found that 1.12 crore additional jobs were created during April 2015-December 2017, the first 33 months following the rollout of the scheme. Of this, 51.06 lakh were self-employed or working owners which also included unpaid family members while 60.94 lakh were employees or hired workers.
Also read | What is the Mudra Yojana Scheme all about?
To put this in context, the number of additional jobs in 33 months was less than 10 per cent of the total number of loans.
The Draft Report has been accessed by The Indian Express. The survey studied as many as 97,000 beneficiaries and was conducted between April-November 2018. Its salient findings:
* A total of Rs 5.71 lakh crore in loans was sanctioned under three categories of Mudra — Shishu, Kishor and Tarun — through 12.27 crore loan accounts during the first three years. The average ticket size of a loan was Rs 46,536.
* Shishu loans (upto Rs 50,000) account for 42% of the total loan amount sanctioned in 2017-18; Kishor (Rs 50,000 to Rs 5 lakh) for 34% of the total sanctioned and Tarun loans (Rs 5 lakh to Rs 10 lakh) constituted the remaining 24%.
* Shishu loans accounted for 66% of the new jobs created; Kishor created 18.85% of new jobs and Tarun 15.51%.
* In effect, the loan extended for every additional job created works out to Rs 5.1 lakh. Experts said this explains why units may be finding it so difficult to generate employment.
* Services and trading accounted for more than two-thirds of the additional jobs (services: 38.46 lakh or 34.34 per cent and trading: 37.21 lakh or 33.23 per cent).
* Allied agriculture created 22.77 lakh more jobs (20.33 per cent of the total). Manufacturing could add only 13.10 lakh (11.7 per cent).
The government had planned to use the findings of this survey to counter the National Sample Survey Office (NSSO) report on unemployment which estimated the unemployment rate to be 6.1 per cent in 2017-18, a record high.The NSSO report was ready in December 2018 but was released after Lok Sabha elections on May 31, 2019.
When bank credit was squeezed, the Mudra Yojana has helped Micro, and small entrepreneurs, whose credit demands were less than Rs 10 lakh. They have got loans without collateral. This money has provided some cushion for many to expand their existing businesses.
While the survey asks beneficiaries if they set up a new unit after availing the loan, followed by a series of questions related to employment, the draft report does not share the break up in additional jobs created by new units and existing units.
Detailed queries sent to the Labour and Employment Ministry about the Mudra survey by The Indian Express remain unanswered.
Sources said the Labour Bureau presumes the surveyed accounts to include double or triple-time beneficiaries as well as spillover from 34.26 crore Jan Dhan account holders who were also being included by banks as Mudra beneficiaries; especially those accounts where an overdraft of Rs 5,000 was being provided by the banks.
The survey defines “self employed” as “persons who operate their own establishment or are engaged independently in a profession or trade on own account or with one or a few partners” and “includes unpaid family members working in an establishment”.
A worker, on the other hand, can be the owner of an establishment, other household member working as co-owner or partner or helping the owner in running the establishment, “whether hired or not”, besides regular and salaried employees, casual/ daily wage labourers.
Employees or hired workers refer to “persons engaged, excluding self employed, by the unit whether for wages or not”, in work connected directly or indirectly with the process and includes all administrative, technical and clerical staff, supervision or management, and production/services.
The Mudra Yojana was launched in April 2015 to provide funding to the non-corporate small business sector through various financial institutions like banks, NBFCs and Micro Finance Institutions (MFIs).
The survey, in the nature of a non-farm enterprise survey, was conducted to collect information on generation of employment in different sectors including manufacturing, services, allied agriculture, trading and other sectors. It, however, does not capture information for employment in the agriculture sector.
About 5 crore persons (3.1 crore self employed, 1.95 crore hired workers) were employed in establishments which availed of Mudra loans before the commencement of the survey.
The reference period for the Mudra survey was taken from April 8, 2015, the launch date, to December 2017.