New Delhi: The number of people helped by the National Scheduled Castes Finance and Development Corporation (NSFDC) fell to 61,394 in 2025-26, almost half of the 1,18,002 covered in 2024-25 and 1,11,309 in 2023-24, even as the corporation signed up new banks and finance companies to widen its reach, a parliamentary panel has found.
The Standing Committee on Social Justice and Empowerment, chaired by BJP MP P. C. Mohan, tabled its report on the corporation’s functioning in Lok Sabha Wednesday. It said it was surprised that beneficiary numbers had fallen despite NSFDC roping in Regional Rural Banks, Public Sector Banks and other lenders as alternative channel partners.
The drop was sharper under the corporation’s credit schemes alone, where beneficiaries fell from 85,372 in 2023-24 to 41,750 the following year. NSFDC told the panel the count nearly halved because a larger share of borrowers took bigger loans that year.
But the committee linked the decline to a funding drought. The government infused no fresh equity in 2024-25 or 2025-26, and none between 2019-20 and 2023-24 either. Appearing before the panel, the Secretary, Department of Social Justice and Empowerment, confirmed that no money had been given to the corporation in the last two financial years.
Had the equity come through, the panel said, the number of beneficiaries could have been much higher. It noted that NSFDC, a not-for-profit company under Section 8 of the Companies Act, grows its asset base by only about 3 percent a year, while inflation runs at 4 to 4.5 percent, leaving the corporation shrinking in real terms without government support.
An NSFDC representative told the committee the portfolio earns an average lending rate of just 3.1 percent, and that without regular equity infusion, annual loan disbursement had stagnated. The report quotes the official as saying the corporation was “not able to actually meet even the inflation” on its own.
‘Incomprehensible’
The panel was harshest on the state of NSFDC’s board. The 15-member board of directors, drawn from the ministries of Social Justice, Finance and MSME along with banks and state agencies, has nine vacancies, leaving it barely a third staffed.
The department’s defence that the vacancies had not affected the corporation’s functioning was dismissed by the committee as “incomprehensible”. If the empty seats made no difference, it said, there was no logic in constituting a 15-member board at all. It recommended the posts be filled without further delay.
Staffing at the corporation is also thin. As of July 28, 2026, 27 of 70 sanctioned posts lay vacant, up from 25 in March, with just four liaison centres to coordinate 38 state channelising agencies and 53 other agencies nationwide.
The report also said the corporation flouted corporate governance norms. Board and audit committee meetings, required every three months under the guidelines of Department of Public Enterprises, were not held on schedule. Only three board meetings took place in 2024-25, with the gap between two of them exceeding three months. NSFDC’s own compliance certificate acknowledged the lapses.
SCAs failing in 14 states
The corporation’s state-level delivery arms are struggling. State channelising agencies are underperforming or non-performing in 14 states because of weak institutional structures, the panel found, while Telangana and Ladakh have not appointed one at all. It has asked the department to set up a high-powered committee to fix the problem.
The committee also questioned the 15 percent interest charged on microfinance loans to some of the poorest borrowers, calling the rate very high and a reason many were not taking loans. It urged the department to reconsider both the interest rate and the Rs 5 lakh annual family income eligibility cap.
The panel’s reading of NSFDC’s own impact studies was equally critical. A 2022-23 evaluation found only 58.8 percent of beneficiaries had crossed the poverty line, down from 99 to 100 per cent in earlier assessments. The committee said it was disheartened that even after the corporation had existed for decades, it had not managed to lift its target group out of poverty.
On the corporation’s marketing melas, 79 fairs over ten years generating Rs 10.5 crore in sales, the panel was blunt. It said it was not satisfied with the figures.
(Edited by Viny Mishra)
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