New Delhi: A key scheme of the Narendra Modi government to support entrepreneurs among the Scheduled Tribes (ST) is yet to be operationalised two years since it was introduced, ThePrint has learnt.
Announced in the 2022-23 budget, the Venture Capital Fund for Scheduled Tribes (VCF-ST) is aimed at providing support to new incubation and startup ideas through concessional finance.
Under the scheme, businesses can seek financial assistance up to Rs 5 crore, according to the guidelines listed on the website of the Union Ministry of Tribal Affairs, the nodal ministry for the scheme.
The VCF-ST, which was announced amid a major tribal outreach push by the government, is modelled on a similar fund for the Scheduled Castes (SC) and Other Backward Classes (OBC).
“As a social sector initiative, the objectives of the scheme of Venture Capital Fund for Scheduled Tribes are to promote entrepreneurship among the Scheduled Tribes population in India, who are oriented towards innovation and growth technologies,” read the scheme’s description, as laid out in the 2022-23 Budget.
The Modi government made an allocation of Rs 50 crore for the scheme in the budget for FY 2022-23, which was later revised to Rs 20 crore. For 2023-24, Rs 30 crore was allocated for VCF-ST.
Senior officials in the Ministry of Tribal Affairs said the ministry is in the process of finalising the plan to operationalise it.
The ministry officials, however, refused to divulge the reason for the delay in operationalising the fund.
ThePrint has reached the ministry spokesperson for a comment by text, and this report will be updated as and when a response is received.
Speaking to ThePrint, several ST entrepreneurs said they hoped the scheme is operationalised soon, adding that timely implementation would have helped them recover from the impact of the Covid pandemic.
“The businesses, especially startups, were adversely impacted during the pandemic. If the fund was operationalised after it was announced, it would have helped in faster recovery of the businesses,” said Doman Chandra Tudu, who started his garment business in 2017 in Jamshedpur, Jharkhand.
Even now, he added, a lot of ST entrepreneurs find it difficult to get loans from banks.
Schemes like VCF-ST, Tudu said, provide the financial support needed to expand businesses.
“We need investment of at least Rs 50 lakh to Rs 1 crore to expand our businesses. In this fund, we will get loans at a concessional rate, and it can be repaid over a period of 6-7 years. This will help entrepreneurs in a big way.”
Milind Kamble, founder chairman of the Dalit Indian Chamber of Commerce and Industry, told ThePrint that this “fund is the need of the hour for entrepreneurs from the Scheduled Tribes communities who need funds to expand their businesses”.
“We have given our inputs to the ministry for the VCF-ST. We hope it is launched soon,” he said.
The welfare and development of tribal communities has been a focus area of the Modi government, which has launched several initiatives to this end, including the PM-JANMAN (Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan), launched in November last year to provide last-mile delivery of welfare schemes to 75 Particularly Vulnerable Tribal Groups (PVTGs) in 19 states and Union territories.
The PM released the first instalment of Rs 540 crore to 1 lakh PVTG beneficiaries of the PM Awas Yojana-Gramin Monday.
‘Push for first-gen ST entrepreneurs’
ST entrepreneurs say they face several difficulties in setting up their businesses.
Sandip Sarkunde, who has an LPG-distribution business in Navi Mumbai, said getting a loan from banks is difficult despite various initiatives launched by the central government.
Sarkunde, who is a software engineer by qualification, told ThePrint, “We need a loan of Rs 1 crore and above to expand our businesses, and it is difficult to get collateral-free loans of Rs 1 crore-Rs 5 crore from banks.”
Kathi Chishi, who has an agri business in Dimapur, Nagaland, said most ST businesspersons are first-generation entrepreneurs.
“Though the government has taken measures under which businesses can get the necessary financial help, getting a loan from banks is still slightly difficult for ST people, who are mostly first-generation entrepreneurs,” Chishi added. “The government should provide grants to encourage entrepreneurs.”
Tudu said his friends among SC and OBC communities have benefited from the VCF-SC and VCF-OBC.
“In the past few years, SC and OBC businessmen have been able to expand their businesses by availing loans [under the scheme],” he added. “The ST community also needs this kind of financial support, especially now, to sustain their businesses.”
(Edited by Sunanda Ranjan)
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