In his budget speech on Wednesday, finance minister Arun Jaitley spoke in glowing terms of the Pradhan Mantri Mudra Yojana (PMMY), a scheme intended to provide loans of up to Rs 10 lakhs for small enterprises.
“The Pradhan Mantri Mudra Yojana has contributed significantly to funding the unfunded and the underfunded. Last year, the target of 1.22 lakh crores was exceeded,” Jaitley said in paragraph 109 of his speech, “For 2017-18, I propose to double the lending target of 2015-16 and set it at 2.44 lakh crores.”
The target-exceeding figures quoted by Jaitley on Wednesday morning correspond to the preceding financial year of 2015-16, when loans worth Rs 1.33 lakh crore were disbursed.
Missing in his speech was any reference to targets and performance for the current year 2016-17. That could be because this year, Micro Units Development & Refinance Agency Ltd (MUDRA) has missed its targets by about 50%.
In para 95 of his budget speech delivered last year, Mr. Jaitley set a target for disbursal of loans worth Rs 1.8 lakh crore. Data from the Micro Units Development & Refinance Agency Ltd (MUDRA) website indicates only Rs. 0.98 lakh crores worth of loans were disbursed as of 27 January, 2017, about half the target set out in his 2016-17 speech.
The disbursal of loans to small entrepreneurs is considered a vital step in creating jobs and employment for the millions of young Indians who join the workforce each year.
Apart from missing the target, Jaitley actually halved allocations to the Mudra scheme from Rs 2135 crore in 2016-17 to Rs 1040 crore for 2017-18.
But in prepared remarks before the press, BJP president Amit Shah confused the Mudra Yojana’s targets with its budgetary outlay, incorrectly overstating the budgetary allocation by an exponential factor.
In widely broadcast remarks, Shah incorrectly said, “Mudra Yojana ke budget ko bhi is saal mein Rs 2.44 lakh crore kar kar swa-rozgari ke madhyam se rozgar prapt karne wale akankshi yuva ke liye ek methvapoorna kaam kiya hai.”
Which translates as “By making the budget for the Mudra scheme Rs 2.44 lakh crore, a significant work has been done for aspiring youth seeking employment through entrepreneurship.”
In fact, Rs 2.44 lakh crore is the volume of loans that public and private banks are expected to extend this year.