UPSC CSE Current Affairs — 3 July 2026

Pradhan Mantri Mudra Yojana (PMMY), launched on April 8, 2015, completes 11 years in 2026. It provides collateral-free loans up to ₹20 lakh to non-corporate, non-farm micro and small enterprises under three tiers: Shishu (up to ₹50,000), Kishore (₹50,001–₹5 lakh), and Tarun (₹5–₹10 lakh). A fourth tier, Tarun Plus (₹10–₹20 lakh), was added in 2024. Over 52 crore loans worth ₹32 lakh crore have been sanctioned cumulently since inception.

PMMY addresses a structural gap in India's credit architecture: the missing middle of micro-entrepreneurs who are too small for formal bank loans and too vulnerable to rely on moneylenders. By routing credit through Scheduled Commercial Banks, RRBs, MFIs, and NBFCs under MUDRA Ltd. (a subsidiary of SIDBI), the scheme democratises financial inclusion at the enterprise level, not just the household level.

The three-tier Shishu-Kishore-Tarun framework is deliberately developmental — borrowers are expected to graduate upward as their businesses scale. This mirrors the lifecycle approach to enterprise promotion. The 2024 addition of Tarun Plus (₹10–₹20 lakh) for repeat Tarun borrowers with good track records signals a maturing policy intent: to convert micro-borrowers into small business owners.

For UPSC GS3, what matters is understanding PMMY's role in the broader ecosystem of inclusive growth. It intersects with Stand-Up India (SC/ST/women entrepreneurship), PM SVANidhi (street vendors), and the National Policy for Micro Enterprises. Critically, over 68% of MUDRA loan accounts belong to women borrowers, and a significant share goes to OBC/SC/ST categories, making it a tool of social equity as much as economic empowerment.

Challenges persist: asset quality concerns (NPAs in Shishu segment), credit absorption capacity of first-generation entrepreneurs, and the lack of hand-holding beyond credit. These are key angles for essay and answer-writing.

Parliament's Standing Committee on Finance, chaired by a senior MP, is scheduled to review the regulatory framework for Virtual Digital Assets (VDAs) on July 2, 2025. The Reserve Bank of India and the Institute of Chartered Accountants of India will present their perspectives. India currently taxes VDAs at 30% on gains plus 1% TDS under Section 194S of the Income Tax Act, introduced in the Union Budget 2022-23. No comprehensive crypto regulation law exists yet.

India's approach to Virtual Digital Assets has been deliberately cautious — tax first, regulate later. The 30% flat tax on VDA gains and 1% TDS introduced in Budget 2022-23 effectively signaled that the government treats crypto as a speculative asset class, not legal tender. The RBI has historically opposed cryptocurrencies, citing risks to monetary sovereignty, financial stability, and capital flow management. It has instead pushed its own Central Bank Digital Currency, the Digital Rupee (e-₹), piloted in both retail and wholesale segments.

The Parliamentary Standing Committee's July 2025 review is significant because it brings together fiscal regulators (ICAI on accounting and disclosure standards) and monetary regulators (RBI on systemic risk) to inform potential legislation. India is also bound by the Financial Action Task Force's Travel Rule, requiring VDA service providers to collect sender-receiver information — a compliance burden that only a clear regulatory framework can operationalize.

Globally, the EU's MiCA (Markets in Crypto-Assets) regulation became fully operative in 2024, creating pressure on India to establish comparable clarity for cross-border VDA transactions. Without regulation, Indian exchanges face jurisdictional arbitrage risks, while investors lack consumer protection. The committee's deliberations could shape a dedicated VDA regulatory bill, balancing innovation with financial stability — a classic policy trilemma in the digital finance era.