Subsidy in Mudra Yojana
According to the Pradhan Mantri Mudra Yojana, which was launched in 2015, there is no such subsidy stated by the Ministry of Finance. Mudra loan is a type of credit that is planned to be provided to the micro units, small businessmen and entrepreneurs so as to help them set up their business or to extend it. The Mudra credit given in the form of loan can be repaid in easy installments.
However, the interest rate will be charged, which is promised to be much less than the existing loan rates given by other private and public financial bodies. But according to sources, the government has not yet decided if any subsidy will be provided in the interest rate. However, a Government announcement of subsidy can be expected any time in near future.
Mudra Yojana is aimed to provide financial support to the small scale industries, micro units and entrepreneurs so as to co-exist with the big players and survive in the ever changing competitive market. It was a major problem that several financial institutions denied offering loans to these small businesses and even if the loans were assigned, the interest rates were much higher.
So Mudra Yojana offers low interest rate credit to these smaller institutions and will provide Mudra credit cards with pre-assigned credit limit. There is much speculation on whether any subsidy will be provided in Mudra Yojana. But till now, no such official announcement from the Office of the Prime Minister or the Ministry of Finance is made. However, if there is a Government subsidy on the capital amount under any other scheme, then the Mudra yojana can be merged with the existing one and that subsidy can be availed.
As per Pradhan Mantri Mudra Yojana, loans will be given in three categories. The first one is ‘Shishu’ under which loans up to a maximum of Rs. 50,000 may be given to the micro units. Those businesses which need loans more than Rs. 50,000 and up to Rs. 5 lakh will be given Mudra loan under the second category, called ‘Kishor’. And the last category is ‘Tarun’ where the loan amount will be more than Rs. 5 lakh and up to Rs. 10 lakh.
Loans will be provided by the regional co-operative banks, rural banks, nationalized private banks, etc. Loans will be given in the form of credit cards called Mudra credit cards. The beneficiaries may swap it to purchase machineries or services to extend their business.