Mudra bank

Finance ministry plans for a month long campaign for loans for small businesses under Pradhan Mantri Mudra Yojana with objective of doubling the loan disbursement to small businesses to 1 lakh crore in this fiscal.

The program has three products Shishu, Kishore, Tarun signifying the three phases of growth of business. The loan amount could be in the range of 50,000 to 10 lakhs.

This is after 50 years of bank nationalisation.

Actually what happened in 60s was bank marginalization based on a paper written - Stray thoughts on bank nationalisation - by the banking expert Mrs. Indira Gandhi.

All it has achieved is mobilisation of retail deposits for corporate lending, political favoritism and nepotism, unionism and pension culture, a work culture that has treated customers as slaves.

After 50 years it has granted 4% of its loan outstanding towards small and medium business.

And the political family of Congress talks about inclusive growth. Do they know what it means? Or do they think we don't know what it means?

They may say we have taken the banks to rural areas and hinterlands of the nation. True. But why? What has that achieved? Opening the branches in rural areas is not a goal in itself. What is the final goal? The stated goal was taking the banking to the masses. True. It happened but only on one side of the banking - retail deposit mobilisation. Retail credit growth for small businesses in such regional areas? Who cares?

As political masters that decides the economic future of this country we have Mallyas, Ruias, Mistrys and others to include in our credit policy. That's inclusive growth for them.

After the new government took over last year a new thought, a new strategy is adopted for inclusive growth. It had started the Mudra bank with the sole responsibility to extend loans to marginal sections of the society. Fat cats cannot even open accounts in this bank.

Who will benefit? Kurta-Pyjama people not suit-boot people. This is inclusive growth. This is priority sector lending. Lending is not just extending credit. Lending a hand is equally important than just claiming to open the purse strings.

Then there's the wide spread fear that people will default. Fine. There will be some who will be willful defaulters. There will be some failed businesses, untimely ideas tested badly. It doesn't matter. It's insignificant compared to the chunk of money owed to banks by political who's who.

A large number of people are responsible enough to pay back the loan, stabilize the business, come back for more to expand. A large number of people are honest enough to honor the debt. A large number of people have viable bushes proposition and genuine need for loan.

The amount targeted for this year is still only one fourth of what the govt has achieved through coal and spectrum auctions.

Let's do our bit in making this plan a success and educate the public about this to make the best use of it.

Jai Hind.