The then Union Finance Minister, P Chidambaram announced the setting up of the Venture Capital fund for promoting Dalit Entrepreneurs in his budget speech in February 2014. The fund was set up with 200 crore rupees and was launched in January 2015. So far, 28 entrepreneurs from 10 different states have been sanctioned funding to the extent of 104.7 crore.
We haven’t often seen the BJP and the Congress working together on a policy in the last 18 odd months. But this is one initiative, where the BJP launched what is essentially an idea proposed by the Congress in their budget speech in 2014. In the last budget of the UPA-II government, the then Union Finance Minister P Chidambaram announced setting up of a venture capital fund for Scheduled Castes(SCs) with an initial capital of 200 crore rupees. The fund would be set up by The Industrial Finance Corporation of India (IFCI) to promote entrepreneurship among the SCs. The NDA has made a similar allocation for this fund in its 2015-16 budget.
The Venture Capital Fund for SCs
The fund was setup after the budget announcement. Several melas & advertisements were issued by the government after launching the fund in January 2015. Interested entrepreneurs were asked to apply online with all the required details to be considered for funding. Funding is extended for projects in the manufacturing and services sector ensuring asset creation. The venture capital fund would select those projects that have at least 60% stake holding by Scheduled Caste entrepreneurs for the past 12 months with management control. The investment size could be anywhere from 0.5 crore to 15 crore and the assistance would not be more than two times the current net worth of the company. Women entrepreneurs would be given preference as per the fund guidelines.
28 Projects Sanctioned till December 2015
Till December 2015, a total of 28 projects were sanctioned funding, with a total funding of 104.7 crore rupees. The funding size ranged from as low as 0.52 crore to as high as 15 crore.
Among the states, Maharashtra topped the list with nine (9) entrepreneurs, followed by Telangana with four (4), Tamilnadu & Delhi with three (3) each. Andhra Pradesh, Gujarat & Punjab had two(2) entrepreneurs each. A total of 10 states figured in the list of these 28 projects selected for funding.
Equal distribution of Manufacturing & Services Projects
Out of the 28 projects selected for funding so far, 13 are in the manufacturing sector, 12 in the services sector and the remaining three in the solar power generation. Seven of the nine projects from Maharashtra are in the services sector. All the three projects in the solar power area are from Andhra Pradesh and Telangana. Four of the 28 projects were in the healthcare sector with one manufacturing generic medicines and the other ayurvedic medicines. Only one idea is in the e-commerce sector for gift card.
- Seven (7) of the 28 projects are expansion of existing units while the remaining are new projects
- The average investment size for a manufacturing project was 3.89 crore while it is 1.95 crore for a services project.
- The three solar power related projects took almost 30% of the funding (31 crore)
- Three (3) projects received more than 10 crore each in funding while 3 other projects received 5 crore or more.
- Bulk (15) of the projects received between 1 crore and 5 crore in funding.