Government seeks to empower SC/ST communities via Rs 50 lakh startup funding

BENGALURU: The ambitious Unnati scheme launched by the social welfare department will provide up to Rs 50 lakh funding to community-led startup companies, but with a rider that it should have substantial stakes and active role of scheduled castes and scheduled tribe (SC/ST) community members.
Launched on Friday, the scheme has been designed by the government to involve more SC/ST community members in the growing arena of technology-driven startups.

Speaking to TOI, social welfare department minister Priyank Kharge said the government will not restrict the funding to only SC/ST led startups, but also for all other community-led startups that will have a social impact.

“Our main criteria is the idea and innovation that will be brought forth through the scheme. If the startup has an idea that will be have social impact and have a say in lifting rural life, it does not matter which community the founders are from, we will fund it. However, an SC/ST community member in the firm with a substantial stake and active role will be given primacy and stands a better chance at bagging the funding,” the minister said.

Kharge said the department will work in close association with the IT&BT department and the startup cell under that department will vet the projects for funding.

As a seed money for the scheme, the department has decided to allocate Rs 20 crore for Unnati by utilising the Special Component Plan (SCP) and Tribal Sub Plan (TSP) of the IT&BT scheme over and above which the social welfare department will contribute towards the purpose.

Under this, every government department has to allocate 24% of every departmental allocation for SC/ST community development. The nodal agency to approve these development projects will be the social welfare department.

Kharge admitted that there are chances of the scheme being “misused” by asking a member from the SC/ST community to join the board of the individual startups for “namesake” and try to secure funding for their projects. “For this purpose, if there are four members co-founding a startup, we are asking that the SC/ST community member must have a minimum of 20-25% stake and an active role for us to fund the project. Furthermore, these projects need to be directed towards the welfare of the society and not for commercial purpose alone,” said the minister.

Besides, Unnati will also fund commercial startup ventures, but for companies wholly owned by the SC/ST community. “If the scheme shows tangible results, then the department will consider increasing the funding to Rs 100 crore and have a higher ceiling from the current cap of Rs 50 lakh per startup,” said Kharge.

The department will provide the forms for startups to apply under the IT&BT department for the next two weeks and close the entries by October third week. Subsequently, the startup ideas will be vetted by the IT&BT department and funding will be released.