Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
From UPSC perspective, the following things are important:
Prelims level: PMMY
Mains level: Problem of Unemployment
- The Labour Bureau has completed its survey on employment generated by the MUDRA loan scheme, giving the Centre a potential data tool to combat other reports showing a dismal scenario on jobs.
About MUDRA Scheme
- The Pradhan Mantri Mudra Yojana was introduced in April 2015 as an effort to extend affordable credit to micro and small enterprises.
- Loans up to Rs. 10 lakh are extended to these non-corporate, non-farm enterprises by the Micro Units Development and Refinance Agency (MUDRA) through last-mile financial institutions.
- So far, 15.56 crore loans worth a total of Rs. 7.23 lakh crore have been disbursed.
- In December 2017, faced with mounting criticism on the failure to create job opportunities, the Labour Ministry had asked the Labour Bureau to initiate the survey on jobs created through the MUDRA scheme.
- The NSSO’s findings showed that unemployment hit a 45-year high of 6.1% in 2017-18.
- Central government ministers and officials have already attempted to use the MUDRA scheme’s performance to combat criticism based on the leaked NSSO job survey report.
- Some economists have advised caution in the interpretation of MUDRA data, especially as it relates to jobs.
Loan disbursal doesn’t ensure Job
- Every new loan certainly doesn’t imply creation of a new job.
- It is improbable that these loans are being given to those who were formerly unemployed.
- They are more likely being given to people who are moving to self employment from other jobs resulting in no new net job creation.
- Given that the average size of the loan disbursed under MUDRA is quite small, it is unlikely that the loan seekers are providing a job to anyone other than themselves.