Question 5 from UPSC CSE 2016 - Current
Affairs

Question

Pradhan Mantri MUDRA Yojana is aimed at

IASCODEX · Accepted Answer

Correct Option: A. bringing the small entrepreneurs into formal financial system

Strategy: The question asks for the aim of Pradhan Mantri MUDRA Yojana. The name MUDRA itself (Micro Units Development & Refinance Agency) provides a strong clue. It directly points to micro units (small entrepreneurs) and their financial development. Option (a) aligns perfectly with this by focusing on 'small entrepreneurs' and the 'formal financial system.' Other options describe different government schemes (farmers, pensions, skill development) that are unrelated to the core mandate implied by 'MUDRA'.

Key Info: The Pradhan Mantri MUDRA Yojana (PMMY) was launched on April 8, 2015, by the Prime Minister. Its primary aim is to provide financial support to non-corporate, non-farm small/micro enterprises. The scheme focuses on 'funding the unfunded,' thereby bringing small entrepreneurs into the formal financial system by providing loans for income-generating activities. The loans are extended by banks, Non-Banking Financial Companies (NBFCs), and Micro Financial Institutions (MFIs).

Key features of PMMY:

*   **Implementing Agency**: Micro Units Development & Refinance Agency (MUDRA) Bank.
*   **Loan Categories**: MUDRA loans are classified into three categories based on the stage of growth and funding needs of the beneficiary micro-unit:
    *   **Shishu**: Loans up to Rs. 50,000.
    *   **Kishor**: Loans above Rs. 50,000 and up to Rs. 5 lakh.
    *   **Tarun**: Loans above Rs. 5 lakh and up to Rs. 10 lakh.
*   **Eligibility**: Non-corporate small business segment, including individual entrepreneurs, proprietorship concerns, partnership firms, etc., engaged in manufacturing, trading, or service activities.
*   **Objective**: To promote entrepreneurship, create self-employment opportunities, and integrate the informal economy with the formal financial architecture.

IASCODEX · Answer

Option B: providing loans to poor farmers for cultivating particular crops

IASCODEX · Answer

Option C: providing pensions to old and destitute persons

IASCODEX · Answer

Option D: funding the voluntary organizations involved in the promotion of skill development and employment generation