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Standing up to prejudice

Stand Up India needs to go beyond handing out loans

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Business Standard Editorial Comment New Delhi
Last Updated : Apr 07 2016 | 9:40 PM IST
The "Stand Up India" scheme for scheduled castes (SCs), tribes (STs) and women that Prime Minister Narendra Modi launched on Tuesday serves a good purpose, even if it is timed ahead of elections in Uttar Pradesh, with its powerful Dalit vote. A programme focused on entrepreneurship and empowerment for excluded groups within the market economy is certainly a more practical way of helping these sections than reserving jobs in government institutions, especially given the shrinking market for such employment. Mr Modi clearly understands this when he described Stand Up India as a programme that is aimed at turning "job seekers into job creators," ensuring that these marginalised sections of society, which collectively account for nearly a quarter of India's population, integrate into the "mainstream economy". True to this government's approach, the project has time-bound deliverables: 250,000 approvals in 36 months for loans between Rs 10 lakh and Rs 1 crore, repayable in up to seven years. The programme involves refinancing options via the Small Industries Development Bank of India for which the government has put in an initial amount of Rs 10,000 crore and, later, a Rs 5,000-crore corpus is to be created for credit guarantees.

Transforming the lot of these sections of society, however, does not lie simply in loan disbursals. In fact, one institution to do so already exists - the National Scheduled Castes Finance and Development Corporation was set up as far back as 1989 without noticeably changing the state of Dalit entrepreneurship. A Mahila Bank for women had so little impact that it faces closure. Stand Up India does provide for a certain amount of hand-holding of borrowers from the pre-loan to the operating stage. This is critical given India's labyrinthine and complex rules for doing business. In areas where tribal societies may need to lose land for industrial projects, schemes like this can be invaluable for creating the kind of small entrepreneurial framework that accounted for China's growth. But even if it is assumed that the scheme works to its full potential, it will at best be a halfway house. To genuinely integrate into the business mainstream - in the way, say, African-Americans have done in the US within three decades of winning the right to vote - these groups need to be able to operate within the business environment without the artifice of intervention by state institutions that are often controlled by upper castes anyway.

Handing out loans is also fundamentally different from empowering people with the connections needed for successful businesses. Indeed, when the doing business environment is still far from optimal for big businesses, and decidedly unfriendly to the small and medium entrepreneur, it is unlikely to be welcoming to sections of society that have been prey to ingrained caste and gender prejudices for centuries. This is an opportune time for Mr Modi, a powerful and influential symbol of caste mobility in himself, to align his regime's social agenda to a more inclusive platform. Only a progressive political messaging can make the change a durable one.

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First Published: Apr 07 2016 | 9:40 PM IST

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