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Implementation amiss

There is little awareness about MUDRA among the small businesses it is meant to cater to, elaborate Anjan Roy and Buddhadeb Ghosh.

Implementation amiss

It is amazing how memories cling to the mind-space. Almost three decades after it was launched, the Twenty Point Programme for the upliftment of the economically weaker section still dominates the mind space of people. If you ask any ordinary small business person or even a block development officer (BDO) about the government aids available for the economically vulnerable section, their immediate response will be whether the question is about the Twenty Point Programme. That is at least our experience during some extensive field visits in Uttarakhand, parts of Himachal Pradesh, Tripura, Assam, Arunachal Pradesh, and West Bengal. We have talked to numerous people including small traders, vegetable vendors, shop owners, unemployed graduates, fishermen, fish suppliers, and local state government officials.

The government claims to have disbursed a humongous sum of three lakh crore in loans from the Mudra Bank, in the last three years. However, on the ground, in these semi-urban or small townships, no one really knows about the Mudra Bank or its loans; some have even reacted by asking whether it is a consumption item or a new soft drink. Local state officials admit that the banks are solely responsible for selection and disbursement of loans from this scheme without any linkage to the decentralised system of government.
Immediately after coming to office, Finance Minister, Arun Jaitley, had announced in his budget speech a specially targeted fund for providing loans to the really small and tiny businesses. These included the ubiquitous vegetable seller to the small shop-keepers and makers of any number of small articles. The loans were for improving their business. The idea was that these self-employed individuals did not receive enough help from the organised financial institutions. These businesses do not generally have enough to offer as collateral for a loan from a commercial bank, nor are they equipped to negotiate the prolonged paperwork that inevitably involves taking a loan from a bank. In addition, the banks, as the people interviewed told us, do not bother about small loans at all.
A lady entrepreneur who was running a way-side restaurant in the foothills of the Himalayan region said she had never heard of the Mudra Bank, let alone any loans from such a source. But when told that official figures showed that large amounts have been given to small businesses, pat came the reply: "The money would then be circulating among their own networking circles as usual, in India." Yet another man parried the question saying that the "intelligentsia" (buddhijivi) "did not want us, the ordinary and people of small means to come up. So they keep everything to themselves while floating schemes in the name of benefiting the masses."
It is the story of all-around denial all along—a clear negation of the decentralised system through electoral democracy. Think of the BDO, who should have known of a Mudra Bank or its activities. His reply on questions of loans for small businesses from this new institution was that maybe such a scheme of the Central Government would have bypassed the state governments and thus no information, so far, was available about their activities. They should have involved the state governments or their agencies in spreading this loan scheme. Be that as it may, the central question still remains: if the Union Government is claiming so much money has already been offered as loans to small and tiny units in the last three years by the Mudra Bank, how come it is unheard of at the ground level.
This is true not only in inaccessible areas in Uttarakhand or Himachal, but also in Tripura or Arunachal Pradesh or Assam or West Bengal. The end of the story is that the new effort of the Union Government is a kind of mystery. But then, how does one account for the fund?
One hypothesis could be that the money, has, in fact, been given and spent but it has been categorised under other heads. Could it be that the Mudra loans are in effect the old Twenty Point Programme loans which the banks ordinarily give? The same loans would have been re-categorised under the Mudra head and shown as fresh loans under the new scheme. The most important of all, the people surveyed have no doubt that there is an utter lack of awareness about the programme before being implemented. The country does not live in Delhi, Mumbai, Chennai, Kolkata, Bangalore, and Pune. Indians still significantly live in villages. And, a majority of the voters are from the rural areas and their voices are reflected in the ballot.
It is important to be clear-headed about these loans. Given to small businesses, such funding could have enormous implications. Properly used, such funding could give sustenance to the weakest businesses, and these are the best ways to create fresh employment. If, as the official statistics admit, over 90 per cent of employment generated in the country is in the small informal sectors (NSSO), then it is the proliferation of such units that should generate the fresh employment opportunities we need.
In fact, these loans could be vehicles for the creation of the ten lakh new jobs that are said to be needed to absorb just the new entrants into the job-stream. Only talking about 'demographic dividend' and not reaching the doors of the needy may cost India heavily. So, why not take these activities seriously, and pursue effective implementation of the Mudra scheme for reaching funds to the deserving. IPA
(The views expressed are strictly personal.)

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