Pradhan Mantri Mudra Yojana comes under which of the following ?
1. Ministry of Corporate Affairs
2. Ministry of Rural Development
3. Ministry of Finance
Select the correct answer from the code given

Question

Pradhan Mantri Mudra Yojana comes under which of the following ?
1. Ministry of Corporate Affairs
2. Ministry of Rural Development
3. Ministry of Finance
Select the correct answer from the code given below :
Code :

UnlockIAS · Accepted Answer

Correct — C, Only 3 — the Ministry of Finance. Pradhan Mantri Mudra Yojana is a credit scheme, and in the Government of India credit is the business of the Department of Financial Services in the Ministry of Finance, which administers PMMY. The delivery machinery points the same way: the scheme, launched in April 2015, works through MUDRA — the Micro Units Development and Refinance Agency — which was set up as a wholly owned subsidiary of the Small Industries Development Bank of India, and SIDBI itself falls under the jurisdiction of the Ministry of Finance. MUDRA does not lend to the borrower directly; it refinances banks, non-banking financial companies and micro-finance institutions, which extend collateral-free loans to non-corporate, non-farm micro and small enterprises in three slabs — Shishu, Kishor and Tarun. Statements 1 and 2 are not merely secondary, they are wrong: neither the Ministry of Corporate Affairs nor the Ministry of Rural Development has any administrative role in the scheme.

Why the other options are wrong — (a) It takes the two ministries that do not run the scheme and leaves out the one that does. The Ministry of Corporate Affairs administers company law — incorporation, the registrar of companies, the LLP framework and corporate governance — and PMMY's borrowers are exactly the units that are not incorporated; the scheme's own definition of its target is the non-corporate, non-farm micro and small enterprise. The Ministry of Rural Development runs livelihood and wage-employment programmes such as MGNREGS, DAY-NRLM and PMAY-Gramin, all of them rural by definition, whereas a Mudra loan is a bank loan available to a micro enterprise whether it is in a village or a city.  (b) Half right, and that is what makes it dangerous. The Ministry of Finance does belong here, but the Ministry of Rural Development does not: it has no administrative charge of PMMY. The confusion arises because MUDRA lending and the rural livelihoods mission both reach very small borrowers, but they run on different rails — one is refinanced bank credit under the Department of Financial Services, the other is a self-help-group and subsidy-based programme under Rural Development.  (d) This puts the scheme entirely with the Ministry of Corporate Affairs, which has no role in it at all. The word that misleads is 'Units' in Micro Units Development and Refinance Agency — it sounds corporate, but a 'micro unit' here means a hawker, a shopkeeper, a small manufacturer or a service provider outside the corporate form, and MUDRA is a financial institution under SIDBI, not a registry of companies.

Concept: The question is really about how the Union government is organised, not about the scheme's benefits. Every flagship programme has an administrative ministry, and the reliable way to identify it is to ask what instrument the programme uses. If the instrument is credit — a loan, a guarantee, a refinance line, an interest subvention — the administrative home is the Department of Financial Services in the Ministry of Finance, which is also the department that owns the government's relationship with public sector banks, insurers and the development finance institutions. Pradhan Mantri Mudra Yojana is pure credit: it does not transfer money to the beneficiary, it makes an existing lender willing to give a very small, collateral-free loan by refinancing and, where applicable, guaranteeing it. MUDRA, the institution created to carry that out, sits under SIDBI, which is itself in the Ministry of Finance's jurisdiction.

State PCS 2025 Q37 — Economy PYQ with Answer

State PCS 2025 Q37 — Economy PYQ with Answer