22th January 2024 (10 Topics)
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Delay in Operationalizing Venture Capital Fund for Scheduled Tribes Raises Concerns
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.
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