The Emergence of Institutional Backbone for SC-ST Enterprises
The emergence of an institutional backbone for supporting SC-ST entrepreneurs with DICCI as its linchpin
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-Dr. Milind Kamble
The Union government, working in tandem with DICCI, has created and fostered what is now described as the 3M approach - Money, Markets and Mentoring-for SC-ST entrepreneurs. This is in adherence to and in keeping with Dr. Babasaheb Ambedkar's vision of economic empowerment of the SC-STS.
The total no. of MSME entrepreneurs was 1 Cr in 2001, 3.65 Cr in 2006 and 6.33 Cr in 2015; of this 16.55 % (SC-12.45% & ST 4.10%) are owned by SC-ST enterprises (earlier and 73rd round of NSS of 2015-16.)The actual numbers of MSMEs owned by SC is 78.80 lakh & ST is 25.95 lakh; combined SC-ST is 1.05 Cr. These numbers are rapidly increasing every year.
1. Market support: The Public Procurement Policy for Micro and Small and Medium Enterprises (MSME) order 2012expect every Central Ministry/Department/PSU to set an annual goal of 25 % in procurement from the MSE sector; of this 4% is exclusively reserved for MSEs owned by SC/ST and 3% for MSES owned by women entrepreneurs. It was voluntary for the first three years (2012-13, 2013-14, and 2014-15)
The Govt of India made it mandatory in April 2015.Preferential procurement of 4% would have amounted to purchases around Rs. 6000 to Rs. 7000 Cr annually from SC-ST enterprises. Procurement in the first four years of implementation stagnated below Rs. 100 cr. Sharpening of policy measures was the need of the hour.
MSME SAMBANDH Portal: A Public Procurement Policy Monitoring Portal 'MSME - SAMBANDH", was launched in 2017 by the Ministry of MSME. It altered the status quo.
A reporting dashboard was created for all ministries, departments & CPSUs. Performance improved considerably. In the year 2018-19, procurement touched Rs. 824 Cr from 4587 MSES; in 2019-20 it was Rs. 692 Cr from 6340 MSES; Rs.757 Cr from 6844 MSEs in 2020-21 and, importantly, Rs. 1070 Cr from 9032 SMEs owned by SC-ST in 2021-22.
2. Money support: Access to capital is a critical issue for MSMEs. Over the years, with continuous tweaking, financial support ranging from Rs.50,000 to Rs. 15 cr. is now available to SC-ST entrepreneurs.
a. Pradhan Mantri Mudra Yojana (Support from 50,000 to 10 lakh without collateral)
Mudra is the biggest ever measure in financial inclusion that has benefited SC-STs in India. The cumulative statistics for 7 years in FY 2021-22:total Mudra beneficiaries were 34.54 Cr and amount sanctioned is around Rs. 18.71 lakh Cr. Total amount disbursed is Rs. 18.19 lakh Cr. SCs constitute 16% and STS 6% of the total Mudra beneficiaries who are largely nano entrepreneurs; street vendors, tea/food stall owners, shoe polish and puncture repair shops.
i. The Numbers of SC Mudra Beneficiaries-5.52 Cr and lending to them Rs. 2.91 lakh Cr.
ii. The Number of ST beneficiaries-2.07 Cr and lending to them Rs. 1.09 lakh Cr.
iii. The Total SC-ST Mudra beneficiaries' number is 7.59 Cr and total lending-Rs. 4.0 lakh Cr.
These are people who were out of the formal banking system. The government's Jan Dhan Yojana helped them open a bank account and many went on to access the Mudra scheme.
b. Stand up India (Support from 10 lakh to 1 Cr without collateral)
The SUI Scheme, primarily focused on SC-ST youth, was launched on 5 April 2016 to mark the 125th birth anniversary of Dr. Babasaheb Ambedkar. The scheme mandates each bank branch to disburse loans to one SC or ST youth-from Rs. 10 lakh to Rs.1 cr. loan-without collateral. This scheme may see the emergence of at least 1.25 lakh greenfield entrepreneurs in manufacturing, service and trading sectors by 2025. Till date,over 30,000 SC, ST youth have been brought under the Standup India umbrella. Another 35,000 applications are in the pipeline. The average lending is Rs. 18 Lakh.
c. Ambedkar Social Innovation and Incubation Mission (ASIIM)
An initiative of the Ministry of Social Justice (Venture Capital Fund -SC) targets SC students and entrepreneurs in Technology and Business Incubators (TBIS) of the Department of Science and Technology (DST) and also those in management schools. The ASIIM's aim is to create 1000 tech start-ups in three years driven by SC youth.
The VCF-SC extends support in the form of hand-holding, mentoring, besides providing equity support up to Rs 30 lakh over a period of three years to each entity of young SC students/entrepreneurs. The budget of ASIIM for the next four years is Rs. 19320 lakhs.
This significant bouquet of schemes - Mudra, Standup India and ASSIM- are proving to be the corner stone for SC-ST entrepreneursas they set about building their businesses. They address a critical need-early- stage funding without the burden of collaterals and also alters the entire dynamics of entrepreneurship, access to capital and sustainability.
d. Venture Capital Fund for SC (support of Rs. 20 lakh to Rs. 15 Cr)
VCF for SC address' the growth capital requirement of SC entrepreneurs. The Govt created the Venture Capital Fund for SC enterprises on 16 January, 2015. A total of 70 entrepreneurs have benefited-Rs.50 lakh to Rs.15 crore range - from the VCF-SC. The VC Fund size is Rs.600 Cr. Over the years, the VCF-SC has sanctioned Rs.444.14 cr. to 118 companies.
3. Mentoring & Handholding Support By NSSH
National SC-ST Hub (NSSH) has been set up in the Ministry of MSME, for Mentoring, Handholding and professional support to Scheduled Caste and Scheduled Tribe entrepreneurs, to fulfill the obligations under the Central Government Public Procurement Policy for Micro and Small Enterprises Order 2012, adopt best business practices and leverage the Stand-up India initiative.
The Hub initiative also seeks to expand the reach of SC-ST entrepreneurs by providing assistance to participate in trade fairs within India and also abroad. The Special Credit Linked Subsidy scheme for SC-ST Enterprises - up to 25% or Rs. 25 Lakh - for manufacturing and Services falls under its ambit.
Fifteen Business Facilitation Centers (BFC) have been set up at NSIC offices nationwide for mentoring and handholding of entrepreneurs. These BFCs are organizing vendor development programs (VDP) with PSUs and contributing to the match making process.
DICCI has been an enabler, a catalyst and has played a pivotal role in creating a policy environment that is supportive of SC-ST entrepreneurs. We appeal to SC-ST youth to shed traditional thinking, come forward and benefit from the dynamic and responsive entrepreneurial ecosystem that is taking shape. Transform into Job Givers.
Dr. Milind Kamble
(Padma Shree Awardee 2013)
Founder Chairman: DICCI.
Chairman: BoG, IIM Jammu.
Chairman Advisory Board: National SC/ST Hub, Ministry of MSME.
Co-Chairman: India-Malaysia CEO Forum, Ministry of Commerce & Industry, Gol.
Co-Chairman: Cll Affirmative Action Task Force.
Member Governing Board: EDII, Ahmadabad. milindkamble@dicci.org, www.dicci.org
The Union government, working in tandem with DICCI, has created and fostered what is now described as the 3M approach - Money, Markets and Mentoring-for SC-ST entrepreneurs. This is in adherence to and in keeping with Dr. Babasaheb Ambedkar's vision of economic empowerment of the SC-STS.
The Government, headed by Narendra Modiji, has been supportive and has helped create the vibrant ecosystem for entrepreneurs and startups that can be seen today. 'Be job givers, not job seekers' is beginning to ring true. Several Ministries/Departments have participated to usher this change.
The total no. of MSME entrepreneurs was 1 Cr in 2001, 3.65 Cr in 2006 and 6.33 Cr in 2015; of this 16.55 % (SC-12.45% & ST 4.10%) are owned by SC-ST enterprises (earlier and 73rd round of NSS of 2015-16.)The actual numbers of MSMEs owned by SC is 78.80 lakh & ST is 25.95 lakh; combined SC-ST is 1.05 Cr. These numbers are rapidly increasing every year.
1. Market support: The Public Procurement Policy for Micro and Small and Medium Enterprises (MSME) order 2012expect every Central Ministry/Department/PSU to set an annual goal of 25 % in procurement from the MSE sector; of this 4% is exclusively reserved for MSEs owned by SC/ST and 3% for MSES owned by women entrepreneurs. It was voluntary for the first three years (2012-13, 2013-14, and 2014-15)
The Govt of India made it mandatory in April 2015.Preferential procurement of 4% would have amounted to purchases around Rs. 6000 to Rs. 7000 Cr annually from SC-ST enterprises. Procurement in the first four years of implementation stagnated below Rs. 100 cr. Sharpening of policy measures was the need of the hour.
MSME SAMBANDH Portal: A Public Procurement Policy Monitoring Portal 'MSME - SAMBANDH", was launched in 2017 by the Ministry of MSME. It altered the status quo.
A reporting dashboard was created for all ministries, departments & CPSUs. Performance improved considerably. In the year 2018-19, procurement touched Rs. 824 Cr from 4587 MSES; in 2019-20 it was Rs. 692 Cr from 6340 MSES; Rs.757 Cr from 6844 MSEs in 2020-21 and, importantly, Rs. 1070 Cr from 9032 SMEs owned by SC-ST in 2021-22.
2. Money support: Access to capital is a critical issue for MSMEs. Over the years, with continuous tweaking, financial support ranging from Rs.50,000 to Rs. 15 cr. is now available to SC-ST entrepreneurs.
a. Pradhan Mantri Mudra Yojana (Support from 50,000 to 10 lakh without collateral)
Mudra is the biggest ever measure in financial inclusion that has benefited SC-STs in India. The cumulative statistics for 7 years in FY 2021-22:total Mudra beneficiaries were 34.54 Cr and amount sanctioned is around Rs. 18.71 lakh Cr. Total amount disbursed is Rs. 18.19 lakh Cr. SCs constitute 16% and STS 6% of the total Mudra beneficiaries who are largely nano entrepreneurs; street vendors, tea/food stall owners, shoe polish and puncture repair shops.
i. The Numbers of SC Mudra Beneficiaries-5.52 Cr and lending to them Rs. 2.91 lakh Cr.
ii. The Number of ST beneficiaries-2.07 Cr and lending to them Rs. 1.09 lakh Cr.
iii. The Total SC-ST Mudra beneficiaries' number is 7.59 Cr and total lending-Rs. 4.0 lakh Cr.
These are people who were out of the formal banking system. The government's Jan Dhan Yojana helped them open a bank account and many went on to access the Mudra scheme.
b. Stand up India (Support from 10 lakh to 1 Cr without collateral)
The SUI Scheme, primarily focused on SC-ST youth, was launched on 5 April 2016 to mark the 125th birth anniversary of Dr. Babasaheb Ambedkar. The scheme mandates each bank branch to disburse loans to one SC or ST youth-from Rs. 10 lakh to Rs.1 cr. loan-without collateral. This scheme may see the emergence of at least 1.25 lakh greenfield entrepreneurs in manufacturing, service and trading sectors by 2025. Till date,over 30,000 SC, ST youth have been brought under the Standup India umbrella. Another 35,000 applications are in the pipeline. The average lending is Rs. 18 Lakh.
c. Ambedkar Social Innovation and Incubation Mission (ASIIM)
An initiative of the Ministry of Social Justice (Venture Capital Fund -SC) targets SC students and entrepreneurs in Technology and Business Incubators (TBIS) of the Department of Science and Technology (DST) and also those in management schools. The ASIIM's aim is to create 1000 tech start-ups in three years driven by SC youth.
The VCF-SC extends support in the form of hand-holding, mentoring, besides providing equity support up to Rs 30 lakh over a period of three years to each entity of young SC students/entrepreneurs. The budget of ASIIM for the next four years is Rs. 19320 lakhs.
This significant bouquet of schemes - Mudra, Standup India and ASSIM- are proving to be the corner stone for SC-ST entrepreneursas they set about building their businesses. They address a critical need-early- stage funding without the burden of collaterals and also alters the entire dynamics of entrepreneurship, access to capital and sustainability.
d. Venture Capital Fund for SC (support of Rs. 20 lakh to Rs. 15 Cr)
VCF for SC address' the growth capital requirement of SC entrepreneurs. The Govt created the Venture Capital Fund for SC enterprises on 16 January, 2015. A total of 70 entrepreneurs have benefited-Rs.50 lakh to Rs.15 crore range - from the VCF-SC. The VC Fund size is Rs.600 Cr. Over the years, the VCF-SC has sanctioned Rs.444.14 cr. to 118 companies.
3. Mentoring & Handholding Support By NSSH
National SC-ST Hub (NSSH) has been set up in the Ministry of MSME, for Mentoring, Handholding and professional support to Scheduled Caste and Scheduled Tribe entrepreneurs, to fulfill the obligations under the Central Government Public Procurement Policy for Micro and Small Enterprises Order 2012, adopt best business practices and leverage the Stand-up India initiative.
The Hub initiative also seeks to expand the reach of SC-ST entrepreneurs by providing assistance to participate in trade fairs within India and also abroad. The Special Credit Linked Subsidy scheme for SC-ST Enterprises - up to 25% or Rs. 25 Lakh - for manufacturing and Services falls under its ambit.
Fifteen Business Facilitation Centers (BFC) have been set up at NSIC offices nationwide for mentoring and handholding of entrepreneurs. These BFCs are organizing vendor development programs (VDP) with PSUs and contributing to the match making process.
DICCI has been an enabler, a catalyst and has played a pivotal role in creating a policy environment that is supportive of SC-ST entrepreneurs. We appeal to SC-ST youth to shed traditional thinking, come forward and benefit from the dynamic and responsive entrepreneurial ecosystem that is taking shape. Transform into Job Givers.
Dr. Milind Kamble
(Padma Shree Awardee 2013)
Founder Chairman: DICCI.
Chairman: BoG, IIM Jammu.
Chairman Advisory Board: National SC/ST Hub, Ministry of MSME.
Co-Chairman: India-Malaysia CEO Forum, Ministry of Commerce & Industry, Gol.
Co-Chairman: Cll Affirmative Action Task Force.
Member Governing Board: EDII, Ahmadabad. milindkamble@dicci.org, www.dicci.org
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