For inclusive development, support Dalit entrepreneurs


Despite the constitutional guarantee of equality, the mind space of Indian society is deeply entrenched in caste and its serpentine matrix. So much water has flown under the bridge in making the highly-stratified Indian society an inclusive one. Dalits have achieved a degree of mobility through franchise and social movements, but the question that remains is: Why, after seven decades of affirmative action and policies, have they not been able to fill the void of social and cultural capital?


In a departure from the fixation on traditional parameters for the study of Dalit rights and empowerment, there is now a focus on how market forces can be expanded to address social exclusion. While entrepreneurship alone isn’t the panacea to caste-based exclusion or marginalisation, Dalit entrepreneurship is the new narrative changing the discourse of Dalit empowerment.

Entrepreneurship can shape access to rights and push against entrenched social hierarchies. The circulation of material benefits and the relative autonomy that comes with entrepreneurship are added advantages. The new generation of Dalits is looking for a way out of the exploitative social order. It is now ready to become a stakeholder and an active participant in the New India story. It refuses to be bogged down by the players and practices emblematic of the old socio-political order in the market.

The dominance of a few castes over the domains of business and commerce, and their entrepreneurial instinct have helped them create a network that they can bank on, while an individual from a marginalised section of society only has the options of taking up a government job or continuing their caste-based occupation. My research has shown that most of this has to do with the fact that, along with access to capital for their entrepreneurial ventures, dominant castes are also accumulating social capital. Whether both these things are corollaries to each other or occur together as a coincidence is open to debate.

As per the reports by the MSME ministry, Dalit-owned ventures are still minimal in terms of numbers as well as revenue. Micro studies conducted all over India show that Dalits are still indentured to their traditional caste-assigned occupations, which are usually manual and low-paying. Those Dalits who consider taking up self-employment are hindered by the fear of social discord and losing any potential subcaste networks that might provide them with mutual insurance. To overcome hindrances to the establishment of networks across various social groups, Dalit entrepreneurs take recourse to their internal ties and use them to sustain their economic gains. It is increasingly becoming clear that supporting Dalits entrepreneurs is integral to the nation’s inclusive development and this is why institutional aid is required in this regard.

Some progress has already been made in this direction. The District Industries Centre (DIC) stipulates that to nurture entrepreneurs, the government must increase the share of goods produced by Dalits in its procurement. The DIC 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. The Andhra Pradesh Industrial Infrastructure Corporation has allocated 16.2 per cent of plots to SC entrepreneurs, while the Small Industries Development Bank of India offers an additional subsidy to them. But the dynamics of how the support reaches Dalit entrepreneurs is not known. So, schemes and programmes must be closely monitored to ensure that the subsidies are accessible.

One of the focussed financial interventions for SC/ST entrepreneurs is the Stand Up India initiative, guaranteeing credit up to Rs 1 crore. But this failed to deliver the expected results due to the unavailability of so-called eligible SC/ST entrepreneurship, with most of the fund lying unutilised. This was primarily due to the apathy of loaning branches and officials towards proposals by Dalit entrepreneurs. The difference in the amount sanctioned and the actual disbursement also seems to be a significant impediment. There is a need for Dalit-focussed alternate investment finance (AIF) and private equity (PE) funds to create a vibrant and inclusive MSME ecosystem. I would also suggest that an inclusivity cell be created in banks and lending institutions/NBFCs in order to inform, educate and foster Dalit entrepreneurship.

It is evident that despite the existence of government schemes and policies to support such initiatives, the actual benefit could never reach the beneficiaries due to the artificial inaccessibility created by inherent social and caste biases. It is advisable to formulate multiple credit guarantee trusts by raising contributions from MNCs, FDIs, portfolio investors, corporates, etc. These trusts can be created based on categories of sectors, products, output, activities, etc. They will provide guaranteed support to the banks for them to extend credit. Stakeholding by FDIs, MNCs, corporates, and PSUs will form the corpus and this can be further leveraged by portfolio investments, borrowings and listings on stock exchanges. A social vulnerability index also needs to be introduced, addressed and assessed.

Dalit entrepreneurship today holds the promise of an exciting and uncharted future for social transformation.

The writer is an assistant professor at the University of Delhi



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