Need to promote Dalit entrepreneurship – UPSC GS3

  • Dalit entrepreneurship holds promise for the much-needed social transformation.
  • Many attempts have been made to transform the highly-stratified Indian society into an inclusive one. However, the expected social transformation in our Indian society remains unfulfilled, especially with regard to Dalits. Their situation has improved, but social exclusion still persists.
  • In this context, promoting Dalit entrepreneurship can further the much-needed social transformation.
Why the government needs to support Dalit entrepreneurship?
  • Employment opportunities: With the dominance of a few castes over business and commerce and lack of access to capital, an individual from a marginalized section of society has limited options of employment. He can either take up a government job or continue their manual and low paying caste-based occupation.
  • Supporting Dalit entrepreneurship can improve their access to rights while helping them fight the social hierarchies.
  • Material well-being and financial autonomy: Entrepreneurship often results in gaining of material benefits, and the relative autonomy.
What steps are being taken by the govt?
  • The District Industries Centre (DIC) stipulates that to nurture entrepreneurs, the government must increase the share of goods produced by Dalits in its procurement. It has also sought to get financial institutions to amend their rules for collateral in order to ease financing for the projects of Dalit entrepreneurs.
  • State financial corporations have also been instructed to increase financial support to Scheduled Caste entrepreneurs.
  • Stand-Up India initiative, a focussed financial intervention for SC/ST entrepreneurs guarantees credit up to Rs 1 crore.
  • Preference to SC entrepreneurs in industrial plots allocations.
  • The Small Industries Development Bank of India offers an additional subsidy to Dalit entrepreneurs.
What are the issues/challenges faced by Dalit entrepreneurs?
  • Artificial inaccessibility: Despite the existence of government schemes and policies, the actual benefit is not reaching the beneficiaries due to the artificial inaccessibility created by inherent social and caste biases.
  • For instance, the Stand-Up India initiative failed to deliver the expected results due to the unavailability of so-called eligible SC/ST entrepreneurship, with most of the funds lying unutilised.
  • The lack of enthusiasm of loaning branches and officials towards proposals by Dalit entrepreneurs
What is the way forward?
  • Dalit-focussed alternate investment finance (AIF) and private equity (PE) funds are needed to create a vibrant and inclusive MSME ecosystem.
  • Creation of inclusivity cell in banks and lending institutions/NBFCs in order to inform, educate and foster Dalit entrepreneurship.
  • Formulate multiple credit guarantee trusts by raising contributions from MNCs, FDIs, portfolio investors, corporates, etc. to provide guaranteed support to the banks for them to extend credit to Dalit entrepreneurs.
  • social vulnerability index can also to be introduced.
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