Stand up India Scheme: This scheme was launched on April 5, 2016, to encourage grassroots entrepreneurship for economic empowerment and job creation. This strategy uses the institutional credit system to reach out to underserved people, such as SCs, STs, and women entrepreneurs.

The Stand Up India Scheme is one of the most important topics for the UPSC IAS exam. It covers a significant part of the Government Schemes section in the General Studies Paper-2 Syllabus and current events of national importance in general studies paper -1 of the UPSC Prelims Syllabus.

In this article, we shall study the Stand Up India Scheme's eligibility, features and benefits.

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Stand Up India Scheme

The Stand Up India Scheme is a government initiative. It was launched in 2015 to promote entrepreneurship among women and Scheduled Castes (SCs) and Scheduled Tribes (STs). The scheme provides collateral-free loans of up to Rs. 1 crore to eligible borrowers. This is utilized to set up new businesses in the manufacturing, services, and agri-allied sectors.

Objectives of the Stand Up India Scheme

• The Stand-Up India project aims to support at least one borrower from the Scheduled Caste (SC) or Scheduled Tribe (ST) category with bank loans ranging from 10 lakh to 1 Crore.
• Additionally, the project ensures that every bank branch facilitates at least one female borrower for establishing a new business in the manufacturing, services, or trading sectors.
• For non-individual enterprises, it is required that a minimum of 51 percent ownership and controlling interest is held by an SC/ST or female entrepreneur.

Check the details on the Economy Notes Here.

Features of Stand Up India Scheme

• The Department of Financial Services (DFS), standup India scheme ministry is the Ministry of Finance. It is leading the initiative of the scheme to promote entrepreneurial enterprises.
• The scheme offers loans ranging from Rs 10 lakhs to Rs 1 crore, including working capital, for establishing new businesses.
• Each bank branch is expected to assist, on average, two entrepreneurial enterprises—one for a woman entrepreneur and one for an SC/ST entrepreneur.
• RuPay debit cards will be provided for credit withdrawals.
• The scheme will complement the existing initiatives of other departments.
• The Small Industries Development Bank of India (SIDBI) will spearhead the Stand Up India initiative, with the participation of the Dalit Indian Chamber of Commerce and Industry (DICCI) and other sector-specific institutes.
• Stand Up Connect Centres will be designated for SIDBI and the National Bank of Agriculture and Rural Development (SUCC).
• The bank will monitor the borrower's credit history to ensure the funds are used appropriately and not for personal gain.

Also, read the National Electric Mobility Mission Plan.

Convergence and Inter-Sectoral Linkages in the Scheme

• When this program started, Bhartiya Micro Credit (BMC) gave out 5100 E-Rickshaws as part of the Pradhan Mantri Mudra Yojna scheme.
• The people who got these E-Rickshaws will also be included in other important government programs like:
  • Pradhan Mantri Jan Dhan Yojna, 
  • Pradhan Mantri Jeevan Jyoti Bima Yojana, 
  • Pradhan Mantri Suraksha Yojana, 
  • Atal Pension Yojana, and 
  • eight more schemes led by the Prime Minister.
• Bhartiya Micro Credit (BMC) aims to make sure that poor and homeless people across the country know about financial inclusion and social security programs. 
• The main idea is to help pedal rickshaw pullers become E Rickshaw owners. It aims to increase their income by three times.
• The Mudra scheme is the one that provides the money for all the services in this program.
• Switching from pedal rickshaws to E-rickshaws will also help in keeping the country clean. It is part of the Swachh Bharat Abhiyan.
• As part of the program, they'll set up places where E-Rickshaws can be charged and serviced. This will not only help small businesses but also create opportunities for entrepreneurs.
• This program effectively combines Bhartiya Micro Credit (BMC) E-Rickshaws with the 'Stand Up India' initiative. This will help more people stand on their feet and become independent.

Know more about Women Empowerment!

Eligibility for Stand Up India Scheme

• The scheme targets SC/ST and/or women entrepreneurs at least 18 years old.
• Loans provided through this scheme are exclusively for green field projects. Greenfield projects refer to the initial venture of the beneficiary in manufacturing, services, trading, or agriculture-related activities.
• For non-individual enterprises, SC/ST and/or women entrepreneurs must hold a controlling stake of 51% in the shareholding.
• Borrowers must not have any outstanding dues to banks or financial institutions.
• The scheme allows for a margin money of up to 15%, which can be supplemented through eligible Central/State schemes.
• Regardless, the borrower must contribute a minimum of 10% of the project cost as their contribution.

Know more about the Special Policy for Women Entrepreneurs!

Benefits of the Stand Up India Scheme

• The Stand Up India scheme benefits the public by inspiring and motivating new entrepreneurs to reduce unemployment.
• It provides an ideal platform for investors, offering expert guidance, time, and legal knowledge.
• The scheme assists entrepreneurs during the first two years of their business and provides ongoing support to consultants.
• Borrowers have the advantage of a seven-year repayment period, reducing the stress of loan repayment.
• The scheme aims to remove business barriers, including legal and operational obstacles.
• It has the potential to generate employment and empower Dalits, tribals, and women.
• The Stand Up India initiative can catalyse other government initiatives such as 'Skill India' and 'Make in India.'
• It contributes to preserving India's demographic dividend and promotes financial and social inclusion through access to bank accounts and technical knowledge.

Know more about the Economic empowerment of women!

Details of Loan Under Stand Up India Scheme

• For loans above Rs.10 lakh up to 100 lakhs, it depends on risk-based pricing for micro and small enterprises.
• A Composite loan that includes a term loan and working capital between 10 lakh and 100 lakh is provided.
• The loan is repayable in 7 years with a maximum moratorium period of 18 months.
• Generally, working capital limits are authorised by cash credit limits. However, subject to the delegation of loaning power, working capital up to 10 lahks can be approved through an overdraft facility. A Rupay debit card will be provided to make things easier for the borrower.
• A cash credit limit will establish a working capital limit. A Rupay debit card will be provided for the borrower’s convenience.
• Besides primary security, the loan may be secured by collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) wherever applicable.

Also, read about PM Kisan Samman Nidhi Yojana for the UPSC Exam here!

Challenges Associated with the Stand Up India Scheme

The below mentioned are some of the major challenges related to Stand Up India Scheme:

• Lack of Socio-economic Education
  • Limited focus on educating people about the socio-economic aspects of Dalit and women entrepreneurship.
  • Insufficient awareness might hinder the scheme's effectiveness.
• Subjective Innovation Criteria
  • The scheme requires companies to be innovative. However, the determination of innovation is left to the discretion of the DIPP.
  • This could result in delays and potentially exclude deserving entrepreneurial ventures.
• Turnover Requirement
  • The stipulated turnover of 25 crores is a challenge. Very few women-led and SC/ST-led firms meet this criterion.
• Issues with Self-help Groups
  • Self-help groups often face issues like elite capture and local dominance.
  • The scheme doesn't outline measures to address these challenges.
• Limited Banking Access
  • The banking sector's inadequate penetration into rural areas presents a hurdle.
  • Challenges include:
    • a lack of institutional bank linkages, 
    • low awareness, 
    • the digital divide, and 
    • other technical issues, despite the success of Pradhan Mantri Jan Dhan Yojana (PMJDY).

• Inadequate Funding for Manufacturing
  • The funding support ranging from 10 lakhs to 1 crore is considered insufficient for the manufacturing sector's needs.
• Empowerment Gaps
  • SC/ST individuals and women often lack meaningful empowerment in terms of technological knowledge, access to skilled labor, and sector-specific understanding.
  • Bridging these gaps is essential for the success of the scheme.

Know more about the National commission for women!

Significant Points of the Stand Up India Scheme

• SIDBI has established a refinance window with an initial amount of Rs. 10,000 crore.
• The NCGTC will create a corpus of Rs. 5,000 crore for a credit guarantee.
• Pre-loan training, including loan facilitation, marketing, and more, will be provided to support borrowers.
• A web portal has been developed to assist with online registration and support services.
• The main objective of this strategy is to improve institutional credit accessibility for minority populations in the non-farm sector.
• Rs. 10,000 crore will be allocated to SIDBI for financial assistance.
• The plan consists of a pre-loan and an operating phase, with assistance provided throughout.
• The composite loan will have a margin money of up to 25% to help businesses access credit.
• Applicants will receive training in online platforms, e-marketing, web entrepreneurship, factoring services, and registration.

Download Government Scheme UPSC Notes with this link!

Questions to Ace Your Exams

Q1.What is the Stand-Up India scheme? 
Unveiled on April 5, 2016, the Stand Up India scheme is a groundbreaking endeavor designed to nurture entrepreneurship at the grassroots level. With a focus on driving economic empowerment and job generation, the initiative offers bank loans ranging from 10 lakh to 1 Crore to at least one individual belonging to Individuals from reservation backgrounds.
 
Additionally, it also focuses on promoting entrepreneurship among women. Anchored by the Department of Financial Services, Stand Up India plays a crucial role in creating a conducive environment for business growth and empowerment and contributing significantly to the economic landscape of the nation 
 
Q2.What is the need for this scheme?
Stand-up India aims to encourage entrepreneurship among women and scheduled castes and tribes. In India, the scheme is coordinated by the Ministry of Finance's Department of Financial Services (DFS).
The Stand-Up India Scheme provides bank loans between Rs 10 lakh and Rs 1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and one woman borrower per bank branch to start a greenfield business. It can be a manufacturing company, a service company, or a trading company. At least 51% of the shares and controlling stake in non-individual enterprises must be held by SC/STs or women entrepreneurs.

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