Delay in Operationalizing Venture Capital Fund for Scheduled Tribes Raises Concerns

Context

With a renewed focus on administrative reforms aligning with the aspirations of Viksit Bharat, the government has approved an outlay of Rs. 235 crores for the revamped Scheme for Administrative Reforms of DARPG.

Context: Despite being announced in the 2022-23 budget, the Venture Capital Fund for Scheduled Tribes (VCF-ST), aimed at supporting tribal entrepreneurs, is yet to take off.

Background

The VCF-ST, introduced as a key scheme amid a major tribal outreach effort by the government, mirrors a similar fund for the Scheduled Castes (SC) and Other Backward Classes (OBC).
The scheme is designed to provide concessional finance to new incubation and startup ideas initiated by the Scheduled Tribes.

Need for VCF-ST:

The delay in operationalizing the VCF-ST, which allows businesses to seek financial assistance up to Rs 5 crore, is impacting ST entrepreneurs who hoped for timely implementation to aid their recovery from the pandemic's adverse effects.
The fund is crucial for offering financial support to expand businesses and overcome difficulties faced in securing loans from traditional banking channels.

Allocation and Revisions:

In the budget for FY 2022-23, initially allocated Rs 50 crore for the VCF-ST.
This was later revised to Rs 20 crore.
For the fiscal year 2023-24, Rs 30 crore was allocated for the fund.
The Ministry of Tribal Affairs, the nodal ministry for the scheme.