The government has set the target for loan disbursement under the PM Mudra Yojana (PMMY) at 3 trillion rupees for the current fiscal year, compared to 3.21 billion rupees sanctioned in fiscal year 21. Experts attribute the lower target to an increased allocation under the Small Business Credit Guarantee Scheme.
Of the 3.21 trillion rupees in loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY) in the last fiscal year, 3.12 trillion rupees were disbursed to entrepreneurs, according to official data. The figure was even higher in fiscal year 2019-2020 with a total of loans sanctioned at 3.37 trillion rupees, of which loans worth 3.29 trillion rupees were disbursed.
Under the PMMY, credits of up to Rs 10 lakh are provided by banks and non-bank financial companies for entrepreneurial activities to small business units, including for new ventures in sectors such as manufacturing, trade, services and activities related to agriculture. The central government sets annual targets for sanctioning loans under the scheme. In FY22, loans worth 3,804 crore rupees were sanctioned by 13 public sector banks (PSBs) as of June 25.
Mudra loans are given to small businesses, which is part of the priority sector lending of banks, said Madan Sabnavis, chief economist at ICRA. Last year, government intervention through the Rs 3 trillion ECLGS program increased credit disbursements, Sabnavis said.
“This year the target for Mudra has been set at 3 trillion rupees, which is lower than last year, but this year the guarantees provided under the ECLGS program have been increased by 1,500 billion additional rupees. Therefore, the target is not really low because it goes hand in hand with a smaller amount of government support, ”Sabnavis said.
In FY21, loans worth Rs.9.5 trillion were disbursed to MSMEs, which was significantly higher than FY20 when Rs.6.8 trillion in loans had been disbursed, according to FY20. the SIDBI – TransUnion CIBIL MSME Pulse Report. Government interventions such as the ECLGS program were the main factor behind this significant increase in credit disbursements to MSMEs, according to the report.
The government also informed parliament that Rs 167 crore was sanctioned by public sector banks under the Stand Up India program during the current fiscal year on June 28. The Stand Up India program grants a credit of Rs 10 lakh to Rs 1 crore for the establishment of completely new businesses in manufacturing, trade or services and activities related to agriculture. In fiscal year 2020-21, approximately Rs 2,155 crore was sanctioned under the program by 12 PSBs, which was approximately 38% less than the amount sanctioned by these banks during the period of the year. former.
Minister of State for Finance Pankaj Chaudhary, in response to a separate question to Lok Sabha, said loans worth Rs 3,918 crore had been guaranteed to the hospitality industry, sports , leisure, travel and tourism under the Emergency Line of Credit Guarantee Program (ECLGS) as of July 2, 2021. The loans were guaranteed after the extension of the ECLGS program to sectors affected by Covid-19 in March 2021, which involved a credit extension of up to 40 percent of the total outstanding credit among all lenders to February 29, 2020 with a term of 6 years, including a two-year moratorium.
No PSB merger proposal
The government is not considering any new proposals to merge more public sector banks, said Bhagwat Karad, MoS Finance.
The government had merged Vijaya Bank and Dena Bank into Bank of Baroda from April 1, 2019, and Oriental Bank of Commerce and United Bank of India into Punjab National Bank, Andhra Bank and Corporation Bank into Union Bank of India, Syndicate Bank in Canara Bank, and Allahabad Bank in Indian Bank from April 1, 2020.
No formal proposal from Cairn to settle the dispute
The Center has not received any formal proposal within the country’s legal framework from Cairn Energy to resolve the tax dispute, MoS Chaudhary informed lawmakers.
An order has been issued by a French court freezing certain Indian government properties in the Cairn Energy case, Chaudhary said. The Permanent Court of Arbitration in The Hague rendered its award on December 21, 2020 in favor of Cairn Energy Plc. He asked India to pay Cairn $ 1.2 billion plus interest and $ 22.38 million for arbitration and legal fees.