The noise around PM Narendra Modi's flagship MUDRA scheme sounds encouraging, but not the actual deliveries under the project. Photo: Reuters

The noise around the PM's flagship MUDRA scheme sounds encouraging, but not the actual deliveries under the project that Prime Minister Narendra Modi himself refers to as evidence of job creation in the country.

"We gave loans to 13 crore youngsters through the MUDRA scheme," the PM told parliament during last month's no-confidence motion. This, after Congress chief Rahul Gandhi accused the Modi government of failure to generate one crore jobs every year.

India Today fact-checked the much-touted claims around MUDRA -- an acronym for a new bank called Micro Units Development and Refinance Agency, which the Modi administration launched in 2015 to provide loans to small businesses with little access to finances.

The fact-check team filed an RTI with the department of financial services to find out how much, and to what extent, MUDRA has really been able to create employment.

The fact-check team filed an RTI with the department of financial services to find out how much, and to what extent, MUDRA has really been able to create employment.

India Today's petition put up nine precise questions, the first seven to determine the number of individuals who have obtained MUDRA loans for various categories of finance -- Rs 50,000 and less, between Rs 50,000 and Rs 100,000, between Rs 100,000-Rs 200,000, between Rs 200,000-Rs 500,000, between Rs 500,000-Rs 10 lakh and Rs 10 lakh.

India Today also inquired about the number of individuals who have repaid their MUDRA loans and about the total amount of lending under the scheme to date.

Remember, MUDRA loans of up to Rs 50,000 are titled "Shishu", lending between Rs 50,000 and Rs five lakh is called "Kishore" and amounts between Rs five lakhs and Rs 10 lakh are classified as "Tarun".

The loans under the scheme, which require no collaterals, aim at boosting confidence of young, educated or skilled workers so that they may aspire to become first-generation entrepreneurs.

"Our basic purpose is to attain development in an inclusive and sustainable manner by supporting and promoting partner institutions and creating an ecosystem of growth for micro enterprises sector," reads the scheme's mission statement on its website.

But the August 8 reply to India Today's RTI plea belies the claims about MUDRA being a gross generator of employment.

It showed that more than 90 percent of around 13.47 crore loans have been issued under the "Shishu" categories.

Yes, according to the department of financial services, 12.23 crore loans under MUDRA were less than Rs 50,000 per application.

"Such amount of micro loan may be useful for someone like a single-cattle dairy farmer or some 'thailawala' but it will not be sufficient to create substantial employment," explained economist Ajit Ranade when asked about the relevance of Rs 50,000 per capita in employment-generation programs.

According to the RTI reply, only 1.04 crore MUDRA loans fell in the Rs 50,000-Rs 5 lakh "Kishore" bracket and merely 19.60 lakh exceeded the Rs five-lakh mark.

So, the MUDRA lending of a larger size, above Rs five lakh, accounts for only 1.45 percent of the total disbursements under the scheme.

The department of finance, however, chose to remain silent on how many individuals have received the maximum limit as part of the MUDRA lending.

Its reply also didn't disclose the total amount of MUDRA loans -- a key indicator of financing extending to the MSME segment after 2015.

There was no answer to the question about repayments either.

But union minister Ravi Shankar Prasad did draw a startling hypothesis in November last year. "We have given loans worth Rs four lakh crore to 80 million (eight crore) people," he remarked. "If each employed at least one person, 40 million (four crore) jobs were created automatically."

India Today fact-check, however, found no comprehensive study that links MUDRA to the number of jobs it has -- or has not -- created to date.

(With inputs from Sahil Joshi)