MUDRA scheme 'practically worthless' in promoting businesses: Chidambaram

Senior Congress leader P Chidambaram on Thursday criticised the Centre's MUDRA loan scheme, saying it was "practically worthless" in promoting businesses.

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

"I have long maintained that the MUDRA loan scheme is practically worthless to promote businesses," Chidambaram said on Twitter.

The State Bank of India has taken pride that in the Tamil Nadu-Puducherry zone, the bank had distributed Rs 1000 crore to 26,750 MUDRA beneficiaries in 2021-22, he said.

Mighty impressive numbers until one does the mathematics, Chidambaram said, adding that the average size of the loan to 26,750 beneficiaries is only Rs 3.73 lakhs.

What new business can be started with Rs 3.73 lakh and how many jobs can be created with Rs 3.73 lakhs, he asked.

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