Stand Up India to aid entrepreneurs

The Stand Up India programme, launched by Prime Minister Narendra Modi last week, is intended to promote entrepreneurship among the weakest sections of the country’s population – women and Scheduled Castes and Scheduled Tribes. These are the most underprivileged groups that find it hardest to get financial backing or to raise resources for any venture they want to set up or pursue. The easy availability of loans will make a big difference to them. The plan is to facilitate loans in the range of Rs 10 lakh to Rs 1 crore to members of these groups without any collateral security. Each of the 1.25 lakh branches of commercial banks in the country will have to disburse at least two such loans in one year to members of the beneficiary sections for starting an enterprise in the non-farm sector or for strengthening an ongoing project.

There are a number of social and financial programmes, including reservations, which are meant to help the two groups in many ways. They have helped uplift them, improve their capabilities and make them independent. But the impact has been limited in the area of business. Studies have shown that India is way behind most countries in encouraging women entrepreneurs. SC and ST entrepreneurs are very few, though the numbers are increasing. Stand Up India will hopefully ensure that no aspiring entrepreneur from these sections will be short of funds for their business. Besides finance, the programme will also offer guidance and support services which are important for the success of new ventures undertaken by persons who may be lacking in experience.The programme will help about 2,50,000 people to begin with and will lead to a disbursal of at least Rs 50,000 crore. Loans with a priority tag have a habit of going bad, as experience has amply shown. But it is claimed that banks will not be hit if the loan goes bad, because
there are refinancing arrangements and a credit guarantee fund which will take care of their risk. Effective safeguards have to be put in place if the programme has to succeed and benefit the targeted sections, the economy and the society. A lot of care is needed for this. It should be noted that no programme launched by the government has as yet really taken off, in spite of all the fanfare and rhetoric. A political plan has been seen in the programme, but it has a value beyond politics. Society benefits more when the condition of those from the weaker sections improves than when others move up the ladder.