HomeBusinessGovernment's Mudra loan scheme 'practically useless' in boosting businesses: Senior Congress leader...

Government’s Mudra loan scheme ‘practically useless’ in boosting businesses: Senior Congress leader Chidambaram

The former finance minister also said that he is not surprised that the non-performing asset ratio is the highest under the Mudra loan scheme.

The former finance minister also said that he is not surprised that the non-performing asset ratio is the highest under the Mudra loan scheme.

Senior Congress leader P. Chidambaram on September 22 criticized the Centre’s Mudra loan scheme, saying it was “practically useless” in promoting businesses.

The former finance minister also said that he is not surprised that the non-performing asset (NPA) ratio is the highest under the Mudra loan scheme. “I have long said that the Mudra loan scheme is practically useless for promoting businesses,” Chidambaram said on Twitter.

Why are there credit risks in Mudra loans?

“State Bank of India takes pride that in the Tamil Nadu-Puducherry region, the bank has disbursed Rs 1,000 crore to 26,750 Mudra beneficiaries in 2021-22,” he said.

An impressive number unless one does the math, Chidambaram said, adding that the average size of loans to 26,750 beneficiaries is only ₹3.73 lakh. “Which new business can be started with Rs 3.73 lakh and how many jobs can be created with Rs 3.73 lakh,” he asked.

Pradhan Mantri Mudra Yojana (PMMY) is a scheme launched by Prime Minister Narendra Modi on April 8, 2015 to provide loans up to 10 lakhs to non-corporate, non-farm small/micro enterprises. These loans are classified as MUDRA loans under PMMY.

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