Why Mudra bank is a major landmark in our growth process

Abstract

For the first time in our economic history a government has thought about more than 50 per cent of our economic activity instead of the five per cent represented by the Sensex companies, observes IIM-B professor R Vaidyanathan. The announcement of creating the Mudra Bank has been welcomed by small and non-corporate businesses since it is a serious attempt by the government to facilitate “funding the unfunded”. First, some facts about our economy. Nearly 50 per cent of our GDP comes from unincorporated (Uninc) enterprises comprising proprietorship and partnership firms. The corporate sector constitutes only 12 to 14 per cent of the GDP. Agriculture and government each constitute around 18 per cent. Uninc constitutes nearly 50 per cent of the value addition in the manufacturing sector. Their role in service sector is significant. The service sector, consisting of construction/ trade/transport/hotels and restaurants/real estate and dwellings/ other professional services like plumber; electrician; carpenter; chartered accountants; lawyers has nearly two-third of the GDP and, in that, Uninc constitutes more than 70 per cent in various sectors. Read more at: https://www.rediff.com/business/column/column-vaidyanathan-why-mudra-bank-is-a-major-landmark-in-our-growth-process/20150324.htm