New Delhi: Over five years, the government’s apex body for financing Scheduled Tribes (STs) received just two percent of the funds it sought from the Ministry of Finance, the Parliamentary Committee on the Welfare of Scheduled Castes and Scheduled Tribes has found.
The finding sits at the centre of a broader examination of the National Scheduled Tribes Finance and Development Corporation (NSTFDC), which the panel chaired by BJP MP Faggan Singh Kulaste found to be underfunded, understaffed, and dependent on broken state-level machinery to reach its beneficiaries.
The NSTFDC had moved a proposal seeking Rs 750 crore in additional equity support between 2020 and 2025. It received Rs 15 crore—all of it in a single year, 2023-24. In the remaining four years, the capital released was zero. The corporation’s chairman-cum-MD told the committee: “For the last five years, we received only Rs 15 crore. In 2023-2024, we asked for Rs 750 crore more equity fund, but we were given only Rs 15 crore.”
A fresh proposal seeking to nearly triple the authorised capital from Rs 765 crore to Rs 2,265 crore is currently pending with the Ministry of Finance. The committee has directed the Ministry of Tribal Affairs to pursue this approval and stated that “enhancement of budgetary support is necessitated for broader coverage of schemes and also for larger scale of operations by NSTFDC.”
Without fresh equity, the corporation has been lending entirely out of loan repayments and operational surpluses. The finance ministry acknowledged in written replies that NSTFDC “is disbursing the funds from the yearly repayment of loans and ploughing back of surpluses” and that it “disbursed almost 100 percent of its yearly available funds.”
The committee acknowledged this record but noted it was insufficient given the scale of need, with a large percentage of Scheduled Tribes still living below the poverty line.
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Schemes needing relook
The fund crunch has a direct bearing on outreach. NSTFDC’s four main schemes—a Term Loan Scheme, a Micro Credit Scheme for Self Help Groups (MCF), the Adivasi Mahila Sashaktikaran Yojana (AMSY) for women, and the Adivasi Shiksha Rrinn Yojana (Education Loan Scheme)—are all underperforming relative to potential demand.
The education loan scheme, which provides up to Rs 10 lakh at 6 percent interest for professional and technical courses including PhD, had fewer than 100 takers per year over the last five years. The committee has recommended doubling the ceiling to Rs 20 lakh, cutting the interest rate to 3 percent, and introducing loans for overseas studies.
The AMSY offers loans up to Rs 2 lakh at 4 percent interest but is drawing few applicants. The finance ministry admitted in written replies that “in spite of least interest rate, the Corporation is not getting considerable loan proposals under this scheme.” The committee has recommended halving the interest rate to 2 percent.
Across all schemes, the committee has recommended raising the annual family income eligibility limit from Rs 3 lakh to Rs 8 lakh, arguing the current threshold is out of step with economic conditions.
Poor state machinery
While the NSTFDC does not lend directly to beneficiaries, it mobilizes funds through State Channelising Agencies (SCAs), which receive applications, process them, and disburse to individuals and self-help groups. The SCAs in Assam, Bihar, Jharkhand, Karnataka, Madhya Pradesh, and Odisha are non-functional—all these states have substantial ST populations.
The tribal ministry acknowledged that “many of the state nominated agencies are non-active and not availing loans under NSTFDC schemes” and that issues are raised “from time to time through the intervention of the Minister of Tribal Affairs.”
The Committee on the Welfare of Scheduled Castes and Scheduled Tribes found this response inadequate and has asked for a full explanation of why these agencies collapsed and what corrective action is being taken. It has also recommended that funds sitting with non-performing agencies beyond a set deadline be reallocated to performing ones.
Paucity of members
The corporation’s Board of Directors has 10 positions, half of which are vacant. Of the five filled, two members including the Chairman-cum-MD belong to Scheduled Tribes. The CMD told the committee: “As of now, the actual strength is five out of ten. So, others will be filled up most probably as soon as possible.”
On staffing, NSTFDC has 46 employees against a sanctioned strength of 76, with 30 vacancies spread across all groups. The committee has recommended a special recruitment drive with reserved vacancies for SC and ST candidates.
The panel has also recommended that NSTFDC build an online integrated platform to centralise data on beneficiaries, loan applications, disbursements, and recoveries—replacing a monitoring system currently reliant on paper reports and periodic field visits. The ministry has been given three months to report back on the modalities.
(Edited by Tony Rai)