The missing entrepreneurs in India's startup story

While much of the discussion has focused on the capabilities of India’s startups and the role of government, the moment offers an opportunity to confront a deeper issue: the persistent exclusion of Scheduled Caste (SC) and Scheduled Tribe (ST) entrepreneurs from India’s startup and business landscape.

At the recent Startup Mahakumbh, the Union Minister for Commerce stirred controversy by comparing India’s startup ecosystem to China’s. His provocative claim--that China is investing in high-end technology while India is building grocery delivery apps and gig work platforms-- sparked widespread debate. While much of the discussion focused on the capabilities of India’s startups and the role of government, the moment offers an opportunity to confront a deeper issue: the persistent exclusion of Scheduled Caste (SC) and Scheduled Tribe (ST) entrepreneurs from India’s startup and business landscape.

The uncomfortable truth is that India’s startup ecosystem continues to be dominated by caste groups with generational access to capital, networks, and a culture of entrepreneurship. For SC/ST communities, the road to entrepreneurship remains disproportionately steep and poorly paved. This disparity extends beyond startups into the Micro, Small, and Medium Enterprises (MSME) sector. According to the Periodic Labour Force Survey, sector-wise labour force participation in India stands at 45 per cent in agriculture, 11 per cent in manufacturing, and 32 per cent in services. The limited share of manufacturing curtails opportunities for SC/ST entrepreneurs to enter this critical sector. Systemic barriers-- such as limited risk appetite, lack of exposure, restricted access to credit, and exclusion from business networks – further entrench this gap.

The MSME Report 2020 reinforces this inequity: SCs own only 8.9 per cent of registered MSMEs and STs a mere 2.9 per cent. Most of these are microenterprises, far from fair representation, especially considering that SC/ST communities constitute over 25 per cent of India’s population. Encouragingly, our state Karnataka has taken bold steps to promote entrepreneurship among SC/STs. Initiatives such as interest subsidies, collateral-free loans, training programmes, industrial land subsidies, and support through the Elevate programme are beginning to yield results. Until 2009, less than 1 per cent of industrial land in the state was allotted to SC/STs. Today, due to affirmative measures like reservation in allotment and subsidised land pricing, over 12 per cent of allottable industrial land is allocated to them.

I have consistently raised the issue of support for SC/ST entrepreneurs – particularly those from rural backgrounds--in Parliament, posing several questions to the concerned ministries. At the national level, schemes such as the SC/ST Hub under the MSME Ministry and the Venture Capital Fund for SC/ST entrepreneurs have been launched. However, their implementation remains limited in both awareness and reach. Consider the ST Venture Capital Fund: of the Rs 50 crore allocated, only Rs 8.41 crore has been disbursed to just two ST-owned startups since 2024. This reflects not a lack of potential, but systemic failure in outreach, trust-building, and institutional support. Government claims of webinars and social media campaigns fall short in communities with little generational exposure to business. Real transformation demands grassroots investment, sustained mentorship, early exposure in schools and colleges, targeted incubation, and partnerships with trusted social organisations.

Entrepreneurship is not merely an economic opportunity--it is a tool for cultural assertion. I was deeply inspired to see Leader of the Opposition Rahul Gandhi visit Chamar, a Dalit-owned brand with global recognition. Brands like this challenge entrenched narratives of exclusion and usher in a new era of self-determined agency. We must reframe how we view SC/ST entrepreneurship. It cannot remain confined to kirana stores or small dairy units. These communities must be supported to enter high-growth sectors such as artificial intelligence, green energy, and advanced manufacturing. Innovation must not be the preserve of a privileged few -- it must become the right of all.

If the goal is to support 10,000 SC/ST entrepreneurs by 2030, the groundwork must begin now—with skill mapping, financial literacy, and entrepreneurship training in schools and colleges, tailored to the realities and aspirations of SC/ST youth. The government cannot do this alone. We need networked governance – a collaborative model where the State works with NGOs, business networks, and community organisations. These partners are vital in bridging gaps that neither the State nor the market can fill alone.

We must build institutions that recognise and dismantle systemic biases. Innovation labs, incubation support, and accelerators must cater not just to elite startups but also to grassroots MSMEs. Business clinics must be established at the micro level to support young entrepreneurs with legal services, market access, and technology integration.

Organisations like the Karnataka Dalit Entrepreneurs Association (KDEA) play an essential role in mentoring and bridging the trust and information gap between the government and grassroots entrepreneurs. State efforts must complement and not substitute the work of such local ecosystem builders. Business does not thrive in isolation. SC/ST entrepreneurs must be connected to investor networks, mainstream incubators, and mentorship forums. While reservations in procurement, collateral-free loans, and subsidies are useful, they remain insufficient without the social capital that sustains entrepreneurial journeys.

The time has come to democratise India’s entrepreneurial dream. We must build an ecosystem where the next deep-tech innovator, fashion brand creator, or unicorn founder could just as likely emerge from a tribal hamlet or Dalit colony as from an IIT or an urban elite family. India’s true economic potential will not be realised when a few prosper, but only when all communities have equal access to opportunity, networks, and dignity through enterprise.

(The writer is a retired IAS officer and Congress Lok Sabha member from Raichur)