Impact of Mudra Yojana on the Economic Development of Poor and Middle-Class People in Chhattisgarh State

The Pradhan Mantri Mudra Yojana (PMMY) was introduced by the Government of India in 2015 to provide financial support to micro, small, and medium enterprises (MSMEs) that lack access to traditional banking services. This paper examines the impact of Mudra Yojana on the economic development of poor and middle-class people in Chhattisgarh, a state known for its significant rural population and economic challenges. Utilizing government-published data, field surveys, and case studies, the study evaluates the scheme's effectiveness in promoting financial inclusion, enhancing income levels, and generating employment. The findings indicate a positive impact on financial inclusion and income generation, though challenges related to loan accessibility, utilization, and sustainability persist.


Introduction
The economic development of any region is closely linked to the financial inclusion of its population, particularly the poor and middle-class who often lack access to formal banking services.The Pradhan Mantri Mudra Yojana (PMMY) was launched with the objective of bridging this gap by providing microloans to small businesses and entrepreneurs.This paper focuses on the impact of Mudra Yojana on the economic development of Chhattisgarh, a state characterized by high poverty levels and socio-economic challenges.This study seeks to analyse how Mudra Yojana has facilitated credit access, improved income levels, and contributed to employment generation in Chhattisgarh.Additionally, it explores the challenges faced by beneficiaries in accessing and utilizing the scheme effectively.

Objectives of the Study
1. To assess the reach and effectiveness of Mudra Yojana in Chhattisgarh.2. To analyse the impact of the scheme on the income and employment levels of poor and middle-class beneficiaries.3. To identify the challenges faced by beneficiaries in accessing and utilizing Mudra Yojana loans.4. To provide recommendations for improving the scheme's implementation in Chhattisgarh.5. To evaluate the long-term sustainability of the economic benefits derived from the scheme.

Methodology
This study uses a mixed-method approach, combining quantitative data analysis with qualitative case studies and field surveys.Data was collected from government sources, including the official Mudra Yojana website, the Ministry of Finance, and Chhattisgarh state government reports.Primary data was also gathered through interviews with beneficiaries, financial institutions, and government officials.

Impact of Loan Disbursement
As seen in Table 1, Mudra Yojana has progressively increased its outreach in Chhattisgarh, with total loan disbursements growing significantly each year.The majority of the loans fall under the 'Shishu' category, reflecting the scheme's focus on micro-entrepreneurs and small-scale businesses.

Sectoral Impact
The sector-wise distribution data in Table 2 reveals that agriculture and allied activities received the highest share of Mudra Yojana loans in Chhattisgarh, followed by manufacturing and retail trade.This distribution is reflective of the state's economic structure, where a large portion of the population is engaged in agriculture.

Employment Generation
Table 3 shows the estimated number of jobs created as a result of Mudra Yojana.The scheme has had a substantial impact on both direct and indirect employment in Chhattisgarh, contributing significantly to the state's economic development.

Challenges
As highlighted in Table 4, the rising Non-Performing Asset (NPA) rates under Mudra Yojana in Chhattisgarh present a significant challenge.The increase in NPAs suggests difficulties in loan repayment, possibly due to improper loan utilization, insufficient business experience among borrowers, or external economic factors.

Discussion
The findings of this study indicate that Mudra Yojana has played a crucial role in promoting financial inclusion and economic development in Chhattisgarh.The scheme has enabled a large number of microentrepreneurs to access credit, leading to increased income levels and job creation.However, the rising NPA rates and the challenges in loan utilization suggest that there is room for improvement in the implementation of the scheme.To enhance the effectiveness of Mudra Yojana in Chhattisgarh, it is essential to focus on improving financial literacy among beneficiaries, especially those from rural and economically weaker backgrounds.Additionally, there is a need for better monitoring of loan utilization to ensure that funds are being used for productive purposes.

Conclusion
Mudra Yojana has made significant contributions to the economic development of poor and middle-class people in Chhattisgarh by expanding access to credit, increasing income levels, and generating employment.However, the challenges of rising NPAs and the need for better financial literacy among beneficiaries must be addressed to ensure the long-term success and sustainability of the scheme.

Recommendations
Enhanced Financial Literacy: Implement mandatory financial literacy programs for all Mudra Yojana beneficiaries, focusing on loan management, business planning, and financial discipline.Improved Accessibility: Increase the reach of Mudra Yojana in remote rural areas by leveraging mobile banking, digital platforms, and community-based awareness campaigns.Targeted Support for Women Entrepreneurs: Expand support for women entrepreneurs through dedicated schemes, mentoring programs, and networking opportunities to enhance their business success.Strengthened Monitoring and Evaluation: Introduce robust monitoring and evaluation mechanisms to track loan utilization and business performance, including digital tools and regular follow-up visits by bank officials.Risk Mitigation Strategies: Develop risk mitigation strategies for financial institutions, such as credit insurance or guarantee schemes, to reduce the impact of NPAs and encourage continued lending to highrisk borrowers.

Table 3 : Impact of Mudra Yojana on Employment Generation in Chhattisgarh (2016-2023)
Ministry of Finance, Government of India, 2023; Chhattisgarh State Government Reports.