Union Finance Minister Arun Jaitley said the government will partner with Dalit Indian Chamber of Commerce and Industry (DICCI) to set up entrepreneurial hubs for entrepreneurs from the backward classes.

Jaitley, presenting the Union Budget for 2016-17, said the government proposes to allocate Rs 500 crore for its Stand-Up India scheme, which was announced in January, to stimulate innovation and startup activity by women and Scheduled Caste and Scheduled Tribe entrepreneurs.

“This must become the year of entrepreneurship for SC/ST… This will benefit 2.5 lakh entrepreneurs,” Jaitley said on February 29.

The announcement signals a strong show of support for Dalit entrepreneurs. In 2015, the Dalit SME fund, launched two years ago by former Congress finance Minister P Chidambaram, was close to shuttering.

The DICCI SME fund had been launched with massive fanfare with the objective of raising about Rs 500 crore over 10 years to fund ventures set up and run by Schedule Caste and Schedule Tribe entrepreneurs.

The Small Industries Development Bank of India (SIDBI) came in as an anchor investor in the fund, committing Rs 10 crore to its corpus. The then Congress party-led United Progressive Alliance government had urged public sector banks, state insurance companies and DICCI members also to contribute towards the fund.

But a lack of interest from financial institutions and the launch of multiple similar ‘mini-funds’ by the government had pushed the DICCI SME fund to the backburner.

Entrepreneurs belonging to the Scheduled Castes and Scheduled Tribes also face significant hurdles in procuring land and providing collateral for bank loans.

Last year, the Narendra Modi-led Bharatiya Janata Party government proposed to create a refinance agency to provide much-needed credit facilities to micro, small and medium enterprises, with a focus on businesses promoted by SC and ST entrepreneurs.

The Micro Units Development Refinance Agency, or Mudra Bank, would have a corpus of Rs 20,000 crore and a credit guarantee corpus of Rs 3,000 crore, Jaitley had said announcing his previous Budget for 2015-16.

Source: The Economic Times