Jaitely proposes MUDRA bank to generate inclusive growth

Finance Minister Arun Jaitely said on Saturday that the NDA Government firmly believes that development has to generate inclusive growth. While large corporate and business entities have role to play, this has to be complemented by informal sector enterprises which generate maximum employment.

"There are some 5.77 crore small business units, mostly individual proprietorship, which run small manufacturing, trading or service businesses. 62 per cent of these are owned by SC/ST/OBC," Jaitley said.

"This bottom-of-the-pyramid, hard-working entrepreneurs find it difficult, if not impossible to access formal systems of credit," he added.

Jaitley suggested creating a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore, and credit guarantee corpus of Rs. 3,000 crore.

MUDRA Bank will refinance micro-finance institutions through a Pradhan Mantri Mudra Yojana.

Jaitely further said that priority will be given to SC/ST enterprises. These measures will greatly increase the confidence of young, educated or skilled workers who would now be able to aspire to become first generation entrepreneurs and existing small businesses too will be able to expand their activities.