Low-interest loans on anvil: Govt keen to fund OBC entrepreneurs
The move is seen part of the BJP-led NDA’s efforts to woo the OBC vote-bank: while SCs account for 16 per cent of the country’s population, the OBC population is pegged between 41 and 52 per cent, as per various estimates (PTI) The move is seen part of the BJP-led NDA’s efforts to woo the OBC vote-bank: while SCs account for 16 per cent of the country’s population, the OBC population is pegged between 41 and 52 per cent, as per various estimates (PTI)
The NDA government is planning to extend its Venture Capital Fund for Scheduled Castes (SCs), through which Dalit entrepreneurs are given Rs 15 lakh to Rs 5 crore loans at low interest rates, to OBC entrepreneurs. The Ministry of Social Justice and Empowerment has sent a proposal to the Finance Ministry for creation of such a fund for OBC entrepreneurs. The Social Justice and Empowerment Ministry has also directed the National Backward Classes Finance and Development Corporation to report on whether it can fund such a scheme by raising money from the market.
The move is seen part of the BJP-led NDA’s efforts to woo the OBC vote-bank: while SCs account for 16 per cent of the country’s population, the OBC population is pegged between 41 and 52 per cent, as per various estimates. In his February 2014 Budget speech, then Finance Minister P Chidambaram had announced setting up of a Venture Capital Fund for SCs. It was to have an initial corpus of Rs 200 crore to ‘‘promote entrepreneurship among the Scheduled Castes and to provide concessional finance to them’’.
The NDA government launched its version of the scheme in January 2015. It provides Dalit entrepreneurs with funding for their business ventures — in manufacturing, retail, or service sectors — at interest lower than the prevailing market rate. Women and disabled SC entrepreneurs are provided loan at 7.75 per cent interest. The fund is managed by the government-owned development bank IFCI.
“Initially there were very few takers when the fund was launched for SC entrepreneurs. It took a while for the scheme to take off. But a similar scheme for OBC entrepreneurs is expected to take off immediately, as many people from these communities are already into business (activities),” a ministry official said.
As per ministry estimates, quoted from the Dalit Indian Chamber of Commerce and Industry (DICCI), there are about 1,000 Dalit entrepreneurs in the country, with a combined turnover of Rs 60,000 crore. Of these, 50 firms have a turnover of over Rs 10 crore. Since the launch of the scheme, IFCI sanctioned Rs 265 crore in loans for 71 proposals, of which Rs 130 crore has been disbursed in 40 cases.
The fund mainly had takers from Maharashtra, Andhra Pradesh, Telangana, Punjab and Uttar Pradesh — among projects funded are packaged drinking water units, solar power plants, water parks, and fitness centres. “We want to create a similar funding option for entrepreneurs from OBC communities as well, so that they can get subsidised loans up to Rs 5 crore with easy repayment options,” an official said.
According to officials in the ministry, all entrepreneurs at present have the option of availing of loans under MUDRA scheme, but with a cap at Rs 10 lakh. As per official data, 35 per cent of MUDRA loan-holders are from OBC communities, and 20 and 5 per cent are from SC and ST communities, respectively.
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