BJP banks on high Mudra score, Cong to counter

Roughly one out of every four beneficiaries under Prime Minister Narendra Modi’s pet Mudra scheme comes from either Karnataka or Tamil Nadu, the two southern states where the BJP faces a tough fight from the Congress and its alliance partners.

Both Karnataka and Tamil Nadu have been frontrunners in the implementation of the Mudra scheme, and account for 23% of the total 12.27 crore entrepreneurs who have been financed between 2015 and 2017, according to data made public by the Micro Units Development & Refinance Agency (Mudra), which implements the scheme.

Karnataka alone accounts for 10% of all Mudra beneficiaries in India, and the State Level Bankers’ Committee expects the state to reach the number one position in the current fiscal. As on December 2018, banks in the state have financed 32 lakh beneficiaries.

The Mudra scheme has come handy for the BJP’s poll campaign in Karnataka. Last year, Modi held a video conference with Manjunath Kamitkar, a Bagalkot-based mobile shop owner who borrowed Rs 13 lakh from Syndicate Bank to expand his business. The BJP has targeted winning 22 out of 28 seats in Karnataka.

West Bengal, another non-BJP state, has also registered high number of Mudra beneficiaries and figures in the top three along with Tamil Nadu and Karnataka.

The Pradhan Mantri Mudra Yojana was launched in April 2015 to extend affordable credit to micro and small enterprises. The scheme has three components - loans up to Rs 50,000 (Shishu), from Rs 50,001 to Rs 5 lakh (Kishore) and from Rs 5 lakh to Rs 10 lakh (Tarun).

The BJP has often used the number of loans sanctioned under Mudra to counter the Congress’ narrative that the Modi administration had failed to create jobs.

“The BJP will certainly push this scheme in their campaign,” political commentator Narendar Pani said. “But the question is, has the scheme created jobs that are sustainable, given that a bulk of the loans is of a small amount, about Rs 25,000?”

The Congress plans to counter the Mudra data on similar lines. “In Karnataka, the growth of entrepreneurship is because of the policies of the state government. Mudra only supplements that."

Also, the Mudra loans across India are turning into non-performing assets,” said Congress leader M V Rajeev Gowda, a Wharton School doctorate in public policy who is also convener of the party’s committee drafting the Lok Sabha manifesto.