Stand Up India Scheme

-Srushti Mahale-181
(UID-22BA235)

● Introduction
The "Stand Up India" scheme was introduced by the Government of India
on 5 th April, 2016 and aimed to promote entrepreneurship and financial
inclusion among women and marginalised communities, particularly
Scheduled Castes (SC) and Scheduled Tribes (ST). The primary idea
behind bringing this scheme was to empower these underrepresented
groups and provide them with access to financial resources and
opportunities.

● History of the Scheme

The scheme was officially launched by Prime Minister Narendra Modi on
April 5, 2016.The objective of the scheme was to facilitate bank loans
between ₹10 lakh and ₹1 crore to at least one SC or ST borrower and at
least one woman borrower per bank branch for setting up a greenfield
enterprise.The scheme aimed to support a wide range of sectors and
businesses, including manufacturing, services, and trading.

● Objectives for introducing the scheme

The Stand-Up India scheme, launched as an initiative to foster
entrepreneurship and economic empowerment, aims to uplift and promote
financial inclusion among women and marginalised communities in India.
This flagship program strives to create a more equitable and diverse
business landscape by facilitating the establishment of new enterprises.
The primary objectives of the Stand-Up India scheme are twofold. Firstly,
it seeks to provide a platform for aspiring entrepreneurs from Scheduled
Castes (SCs), Scheduled Tribes (STs), and women by offering them access
to financial resources and services, thus reducing the barriers they
traditionally face in accessing credit and capital. Through this, the scheme
aims to encourage the development of a diverse range of businesses across
various sectors, fostering innovation and economic growth.Secondly, the
scheme aspires to generate employment opportunities for individuals in
these underserved groups, thereby contributing to the overall
socio-economic development of the nation. By assisting these
entrepreneurs in realising their business ideas and dreams, the Stand-Up
India scheme not only empowers the marginalised sections of society but
also stimulates local economies. Ultimately, the scheme envisions a more
inclusive and dynamic entrepreneurial ecosystem, driving progress,
reducing inequality, and creating a pathway for traditionally disadvantaged
groups to actively participate in the country's economic growth and
development.

● Key Features of the Scheme

The key features of the Stand Up India Scheme include collateral-free
loans to eligible entrepreneurs from SC, ST, and women categories. This
enables individuals who might not have significant assets to access
funding for their business ventures.The scheme encourages a diverse range
of sectors for entrepreneurship, including manufacturing, services, and
trading activities. This allows entrepreneurs to choose business domains
that align with their skills and interests.It typically provides loans ranging
from ₹10 lakh to ₹1 crore. The loan amount can be used to establish a new
enterprise or expand an existing one.The loan under the scheme is a
composite loan, which means it covers both working capital and term loan
requirements of the business.The interest rates for loans provided under
the scheme are competitive and in line with prevailing market rates. The
interest rate is determined by the lending institution.The scheme facilitates
an online application process, making it easier for eligible entrepreneurs to
apply for loans and access information about the scheme.It emphasises the
importance of skill development and provides training and support to
beneficiaries to enhance their entrepreneurial skills and manage their
businesses effectively.It’s implemented through various lending
institutions such as banks, financial institutions, and non-banking financial
companies (NBFCs). These institutions play a crucial role in disbursing
loans and providing support to entrepreneurs.The scheme also encourages
the establishment of environmentally sustainable and green businesses,
contributing to sustainable development.The progress of the beneficiaries
and their businesses is monitored, and follow-up support is provided to
ensure the success and growth of the enterprises.The beneficiaries receive
guidance and support throughout the entrepreneurial journey, from the
application process to business setup and expansion.

● Implementation of the scheme

The government conducted awareness campaigns to inform the target
beneficiaries, including women and entrepreneurs from Scheduled Castes
(SC) and Scheduled Tribes (ST) communities, about the scheme's benefits,
eligibility criteria, and application process. The participating banks were
required to set up designated branches to cater specifically to the needs of
the beneficiaries under the scheme. These branches were equipped with
staff trained to handle applications and inquiries related to the scheme. An
online portal was established where eligible entrepreneurs could apply for
loans and submit their business proposals. This digital platform
streamlined the application process and made it more
accessible.Entrepreneurs could submit their loan applications along with
detailed business proposals to the designated bank branches. The proposals
were evaluated for their viability and potential impact. Once the
applications were reviewed and deemed eligible, the banks approved
collateral-free loans based on the business proposal's feasibility and the
entrepreneur's capabilities. Approved loans were disbursed to the
beneficiaries' bank accounts.The loan amount varied based on the nature of
the business and its requirements. The scheme also included provisions for
entrepreneurs to receive training, mentoring, and assistance in business
planning and development. This aimed to enhance the chances of business
success and sustainability. Participating banks and relevant government
agencies monitored the progress of the businesses that received loans.
Regular updates and reports were submitted to track the impact of the
scheme. Industry associations, business chambers, and other relevant
organisations collaborated with the government to identify potential
entrepreneurs, provide guidance, and promote the scheme. Feedback from
beneficiaries and participating banks was collected to make necessary
improvements to the scheme's implementation and address any challenges
that arose. The government continued to provide support to the
beneficiaries even after the loan disbursal, assisting them in overcoming
challenges and ensuring the growth and sustainability of their businesses.

● Successes of the scheme

63 billion dollars have been invested in Indian startups in the last five
years. The Indian tech startups raised about 13.5 billion dollars in funding
across 885 deals in 2017, which is the peak year in terms of funding in the
past five years. From 29,000 startups in 2014, the numbers grew
exponentially from 2015-2018 to touch 55,000 in 2020. Between 2016 and
August 2020, Startup India programme says it has recognised over 34,800
startups. Among these, 8300 startups received intellectual property rights
(IPR) fee benefits, while over 2.6 lakh people enrolled in the
entrepreneurship-focused learning courses.In terms of gender diversity
across workspaces in India, just 9% of the board members of the top 20
unicorn startups in India are women.

● Inherent challenges to Start-ups in India

The availability of finance is critical for the startups and is always a
problem to get sufficient amounts. There is also a lack of support
mechanisms that play a significant role in the life cycle of startups which
include incubators, science and technology parks, business development
centres etc. Starting and exiting a business requires a number of
permissions from government agencies. Although there is a perceptible
change, it is still a challenge to register a company and exiting it. For
example earlier Angel tax, which stands removed now, falls under
corruption and bureaucratic inefficiencies as it takes the focus of
entrepreneurs away from building a product or service to responding to tax
notices and filing appeals. Several startups fail due to poor revenue
generation as the business grows. As the operations increase, expenses
grow with reduced revenues forcing startups to concentrate on the funding
aspect, thus,diluting the focus on the fundamentals of business. To be
successful a startup must be innovative. Unfortunately, Indian startups are
less innovative than startups elsewhere. Many Indian startups don’t have
an original business idea that is disruptive and by which consumers will be
provided with better service.Too many startups serving too few consumers
are saturating the Indian market. Most startups serve the fraction of
Indians who live in urban India. The majority of Indians who live in rural
areas and small towns remain untouched by most startups.

● Shortcomings of the scheme

While the "Stand Up India" scheme introduced by the Government of
India aimed to be beneficial and inclusive, there were some shortcomings
and challenges associated with its implementation. Some of these
shortcomings include limited awareness where many eligible individuals,
especially those from marginalised communities, might not have been
aware of the scheme's existence or how to access its benefits. Lack of
awareness has hindered the scheme's reach and impact.The education of
the people about the socio-economic dimensions of Dalit entrepreneurship
and women entrepreneurship has not been paid much attention. If this is
not done, the Stand Up India scheme may not be very effective. While the
scheme aimed to provide collateral-free loans, some applicants might have
faced challenges in meeting the necessary eligibility criteria or providing
the required documentation, restricting their access to credit. Starting and
running a business requires not just financial support but also mentorship
and guidance. Lack of proper training and support for beneficiaries lead to
businesses struggling to succeed. Ensuring the long-term sustainability of
the businesses established under the scheme is crucial. Some businesses
faced challenges in scaling up or remaining profitable beyond the initial
stages. Effective monitoring and evaluation of the scheme's impact are also
essential to determine whether it is achieving its intended goals. Without
proper monitoring, it might be challenging to identify and address issues
that arise during implementation. The economic conditions and
opportunities can vary significantly across different regions of India. The
effectiveness of the scheme differs based on geographical factors. Some
communities face cultural or social barriers that make it difficult for
individuals, especially women, to actively participate in entrepreneurship.
The success of businesses depends on market demand and competition.
Some businesses might struggle to find a sustainable market for their
products or services. Entrepreneurship requires a certain level of skill and
knowledge. Lack of adequate skill development opportunities might hinder
individuals from fully benefiting from the scheme.The SC/ST’s and
women have not been fully and meaningfully empowered in terms of
tech-know how, access to skilled labour, knowledge about the sectors and
so on. The criteria for this scheme says that the company needs to be
innovative. Judging whether a product is innovative or not is left to the
discretion of the DIPP. This may lead to delays and also potentially good
entrepreneurial ventures may be lost in the process. Bureaucratic processes
and paperwork have also created obstacles for potential beneficiaries,
particularly those who are less familiar with navigating government
procedures. Providing collateral-free loans can carry the risk of loan
defaults, which can impact the financial sustainability of the lending
institutions involved in implementing the scheme. The scheme's
effectiveness might be influenced by political factors, such as changes in
government policies or priorities. The company is required to have a
turnover of 25 crores. There are very few women-led entrepreneurs and
SC/ST led firm which fit this criterion. The self-help group’s which have
indeed provided some impetus to women entrepreneurs, especially in rural
areas have been subject to elite capture and have been overwhelmed by
locally dominant interests. The Stand Up India scheme does not make
mention of any institutional measures to address these challenges. Further,
the banking sector has not yet penetrated to the hinterlands in a meaningful
manner. Therefore, the challenges of lack of institutional bank linkages,
awareness among the people, digital divide and many other technical
challenges can be obstacles to bank account linkages despite the success of
Pradhan Mantri Jan Dhan Yojana. (PMJDY). The funding support of about
10 lakhs to 1 crore is inadequate for the manufacturing sector
The Startup India scheme had received around 1368 applications by
mid-December last year out of which DPIIT has only accepted 502
application forms and recognized them as ‘startups’. The delay and lack of
efficiency is also a cause for the startup plan to fail in some cases. The
concerns of domestic angel and VCs on capital gains tax remain largely
unaddressed. Venture capital firms and angel investors are more cautious
while investing in Indian startups. It is because the conditions, the ease of
capital flow and doing business are not stable enough.
Despite these shortcomings, it's important to note that the "Stand Up
India" scheme was a step towards promoting economic empowerment and
inclusion. Addressing these challenges through continuous improvements,
targeted support, and effective monitoring could enhance the scheme's
impact and ensure that it reaches its intended beneficiaries more
effectively.

● Conclusion

In retrospect, the Stand-Up India scheme emerges as a multifaceted and

ambitious endeavour aimed at fostering economic inclusivity,
entrepreneurial dynamism, and equitable growth. Delving into its
outcomes and impact, it becomes evident that the scheme has had its share
of successes and challenges, which collectively shape a comprehensive
narrative.
Undoubtedly, the scheme's underlying objective of empowering
marginalised sections of society by facilitating their entry into the
entrepreneurial landscape has yielded commendable results. By extending
financial support to women and SC/ST entrepreneurs, it has shattered
traditional barriers that once hindered their participation in business
activities. The creation of specialised branches in banks for aiding these
entrepreneurs in obtaining loans signifies a pivotal step towards
minimising the credit gap that existed. Furthermore, the scheme's
emphasis on nurturing innovation and encouraging green and sustainable
business models aligns well with the contemporary focus on holistic
development.
However, while the Stand-Up India scheme has carved a notable niche in
India's economic landscape, it has not been entirely devoid of challenges.
One of the prominent hurdles is the limited awareness of the scheme's
benefits and procedures, particularly among the intended beneficiaries.
This has led to an underutilization of the scheme's provisions, hindering its
potential impact. Additionally, the complex bureaucratic processes
associated with loan disbursement and the lack of sufficient handholding
for fledgling entrepreneurs have somewhat tarnished the scheme's
efficiency. To optimise its impact, a more streamlined approach and
enhanced sensitization efforts seem imperative.
In my personal opinion, the Stand-Up India scheme exemplifies the
government's proactive attempt to address long-standing socioeconomic
disparities. Its focus on nurturing entrepreneurship aligns with the belief
that economic empowerment is a potent tool for social upliftment.
Witnessing the rise of businesses led by women and individuals from
marginalised communities not only instils hope but also substantiates the
transformative power of targeted policy initiatives. It is heartening to note
that while the journey has been riddled with obstacles, the scheme has
managed to infuse a sense of economic agency and self-reliance among
those who have benefited from it.
Nonetheless, the scheme could gain immensely from a comprehensive
overhaul of its outreach strategies. Heightened awareness campaigns,
workshops, and a user-friendly digital interface could significantly bridge
the information gap and enhance participation. Moreover, collaborating
with financial institutions to simplify loan approval processes and
providing mentorship programs for first-time entrepreneurs could be
pivotal in enhancing the scheme's efficacy.
In conclusion, the Stand-Up India scheme stands as a testament to the
government's commitment to fostering inclusive economic growth. While
its achievements are commendable, the scheme's full potential is yet to be
realised due to operational challenges and limited awareness. Addressing
these concerns could unlock the true transformative power of the scheme,
ensuring that marginalised entrepreneurs are not only uplifted but also
become integral contributors to India's economic resurgence. The journey
of Stand-Up India is a reminder that the path to equitable progress is paved
with persistent policy evolution and an unwavering focus on
empowerment.