Do government's schemes for up-lifting vulnerable and backward communities by protecting required social…

Question

Do government's schemes for up-lifting vulnerable and backward communities by protecting required social resources for them, lead to their exclusion in establishing businesses in urban economies ?

Ghissu Editorial · Accepted Answer

Protective schemes contribute only partly to the exclusion of vulnerable groups from urban business, through inalienable land and village-bound entitlements, while capital, networks and caste prejudice matter more. Stand-Up India (2016) and the 4% procurement quota for SC/ST-owned firms show the shift from protection to promotion.

**Introduction**

Article 46 and the Fifth and Sixth Schedules oblige the state to shield weaker sections through reserved jobs, land and forest rights. The 6th Economic Census (2013-14) found SC-owned firms at about 11% of establishments against a 16.6% population share, raising the question whether protection itself keeps them out of urban business.

**How Protection Can Hold Back Urban Enterprise**

1. **Locked assets**: Bars on transferring tribal land, upheld in Samatha v State of Andhra Pradesh (1997), make that land unusable as collateral for bank credit.
2. **Place-bound entitlements**: Ration cards, MGNREGA job cards and FRA 2006 rights are tied to the village, so migrants lost the safety net until One Nation One Ration Card (2019).
3. **Job-centred mobility**: Reservation steers aspiration toward government jobs, while caste-based business networks stay closed, as Harish Damodaran's India's New Capitalists (2008) shows.

**Why Protection Is Not the Root Cause**

SKETCH: forcefield | Urban Enterprise by SC/ST Groups
center: Urban business ownership
driving: Stand-Up India loans, Procurement quota, SC-ST Hub, DICCI networks
restraining: Inalienable land, Place-bound entitlements, Closed caste networks, Skill gap

1. **Older barriers**: Iyer, Khanna and Varshney (2013) documented a persistent SC/ST ownership gap, one that tracks low capital, education and networks rather than welfare protection.
2. **Credit and markets**: Stand-Up India (2016) mandates loans of ₹10 lakh to ₹1 crore for SC/ST and women entrepreneurs, and the Public Procurement Policy reserves 4% of central purchases for SC/ST-owned firms.
3. **Urban poor**: DAY-NULM self-employment loans and PM SVANidhi (2020) help street vendors and the urban poor start businesses.

**Conclusion**

Protective schemes explain urban business exclusion only partly; capital, networks and caste prejudice matter more. Moving from protection to promotion, with portable entitlements and assured credit, would let these communities own urban enterprises.

Do government's schemes for up-lifting vulnerable and backward communities by protecting required social resources for them, lead to their exclusion in establishing businesses in urban economies ?

Model answer

Practise this question

Welfare Schemes9 questions

Ghissu