Scheme Of Assistance To Scheduled Castes Development Corporations (SCDCs)

Policy Update
Alisha Mehra

Introduction

The Assistance to Scheduled Castes Development Corporations (SCDCs) scheme is a cornerstone of India’s affirmative action and financial inclusion strategy. Originally launched in 1978–79 as a Centrally Sponsored Scheme, it now functions under the Development Action Plan for Scheduled Castes (DAPSC), aligned with NITI Aayog’s 2018 guidelines. Administered by the Ministry of Social Justice and Empowerment and coordinated nationally by the National Scheduled Castes Finance and Development Corporation (NSFDC), the scheme enables 27 state and 4 UT-level SCDCs to drive targeted socio-economic development of Scheduled Castes.

The SCDCs also function as part of a broader matrix of schemes aimed at the economic, educational, and social empowerment of Scheduled Castes in India. They operate in synergy with central initiatives such as the Pradhan Mantri Anusuchit Jaati Abhyuday Yojana (PM-AJAY), Special Central Assistance to the Scheduled Castes Sub-Plan (SCA to SCSP), the Self-Employment Scheme for Rehabilitation of Manual Scavengers (SRMS), and the Credit Enhancement Guarantee Scheme for SC entrepreneurs, among others.

Alongside institutional counterparts like the National Scheduled Castes Finance and Development Corporation (NSFDC) and National Safai Karamcharis Finance and Development Corporation (NSKFDC), the SCDCs contribute to a layered and targeted delivery framework by serving as the state-level implementing agencies that function as State Channelising Agencies (SCAs ) for several schemes, including the NSFDC schemes.

Functioning

The scheme operates on a 49:51 cost-sharing pattern between the Central Government and State Governments. The central government provides a smaller share to incentivise state participation.

Main Objective	Empowering SC individuals and families to rise above the poverty line through varied developmental efforts.
Social	Advancing the social status of SC communities by supporting access to education and related opportunities.
Economic	Promoting entrepreneurship as a means to change the income and expenditure patterns of SC households.
Role	Acting as facilitators for mobilising institutional credit, serving as promoters, guarantors, and intermediaries for economic transformation.
Mandate	Promote self-employment and income-generating activities among SC individuals, especially those below the poverty line.

DAPSC is a comprehensive monitoring framework that encompasses multiple schemes across various ministries. It differs from SCDC in terms of its nature of work i.e. monitoring and evaluation work, scope of schemes (229 schemes across 38 ministries), implementation, fund flow, targets and establishment.

The same for SCDC is stated below –

Aspect	SCDC
Nature	Financial institution/corporation
Scope	Direct lending and financial assistance
Implementation	State-level corporations provide direct services
Fund Flow	Equity capital and loan disbursement
Target	SC families below the poverty line
Establishment	1978-79

These corporations act as financial intermediaries by bridging the gaps between formal financial institutions and the target population. They offer financial support through concessional loans, margin money assistance, and subsidies, thereby lowering the repayment burden of beneficiaries. Apart from financing, SCDCs play an active role in identifying eligible SC families, encouraging them to undertake viable economic activities, and facilitating partnerships with financial institutions to deliver credit.

Scheme coverage and eligibility

The SCDCs channel funds through multiple institutional partners, including Public Sector Banks (PSBs), Regional Rural Banks (RRBs), and Non-Banking Financial Company-Microfinance Institutions (NBFC-MFIs). The NSFDC serves as the primary channelising agency, offering 13 distinct loan schemes ranging from Mahila Samriddhi Yojana to Educational Loans. The scheme underwent significant revision in 2017-18, introducing performance-based fund release mechanisms

Key changes included –

Conditional Release: Central share equity release is now subject to the NSFDC techno-economic viability evaluation of the project.
Utilisation Requirements: 75% utilisation of previously released Central Government equity is mandatory
State Contribution: Prior release of the state share to SCDC is required
Institutional Capacity: SCDCs must demonstrate the ability to raise additional resources from financial institutions other than the government.

The SCDC scheme targets Scheduled Caste families with annual income up to ₹3.00 lakh, focusing on those living below the poverty line. The scheme encompasses employment-oriented activities across four primary sectors:

Agriculture and Allied Activities (including minor irrigation)
Small-Scale Industry
Transport Sector
Trade and Service Sector

Individual Beneficiary Criteria:

Belonging to the Scheduled Caste community with a valid certificate
Annual family income not exceeding ₹3.00 lakh
Age between 18-60 years for most schemes
No previous default in any government scheme

Currently, 23 states and 4 union territories operate SCDCs, with coverage concentrated in regions with significant SC populations.

Impact

Despite significant budget allocations in 2023-24 and subsequent years, the scheme continues to face persistent challenges, including bureaucratic inefficiencies, fund misutilization, and declining government equity support, necessitating comprehensive reforms to enhance its effectiveness and reach. Evaluation studies have yielded mixed outcomes in terms of poverty reduction and income enhancement.

A comprehensive NSFDC impact assessment revealed that 25.7% of beneficiaries crossed the double poverty line after receiving loans, while 6.2% remained below the poverty line. This implies that more than a quarter of loan recipients not only escaped poverty but achieved a more stable economic position by earning at least twice the poverty line threshold. The study found:

Positive Impacts:

12% increase in average annual household income (from ₹86,189 to ₹90,308)
95.6% of beneficiaries reported an income increase post-assistance
73.5% provided better education to children
80% of skill training beneficiaries gained employment or self-employment

Demographic Reach:

89.5% beneficiaries are located in rural areas
42.1% women beneficiaries
38.8% beneficiaries in the 18-34 age group

Overall, the scheme can be said to help increase the incomes of those from the stated marginalised communities. Although the demographic reach has been somewhat equally distributed, efforts can be made to make the selection more targeted, taking into account equity considerations.

Issues and way forward

Some persistent systemic issues are undermining SCDC’s effectiveness. The frequency and severity of these challenges demand immediate attention. Some high-impact challenges that are critical and need to be addressed are as follows –

Administrative	Bureaucratic delays in fund disbursement and application processing appear as the most significant barrier. The Centre for Market Research & Social Development’s evaluation found that channel partners take between 1 month to one year to utilise NSFDC funds.
Administrative	The lack of robust monitoring allows inefficiencies to persist with little accountability. For instance, Parliamentary Committee reports note significant vacancies in NSFDC Board positions, with only 2 SC members out of 15 total positions.
Financial	There is widespread diversion of funds to non-SC-specific projects and inflated project costs, pointing to fund misutilization corruption. The Telangana study specifically identifies “leakages in the system” resulting in reduced transparency and credibility.
Financial	There exist systemic issues in repayment monitoring leading to poor recovery rates. Some SCDCs, particularly in Chhattisgarh, face challenges due to inadequate state government equity support.
Structural	There is declining government support, which may constrain operational capacity of the scheme. Only 17 out of 37 State Channelising Agencies (SCAs) were functional as of 2022-23, with many unable to meet NSFDC prudential norms. This has necessitated partnerships with alternate agencies since 2013-14, but coverage gaps persist in SC-concentrated states.
Policy	Current eligibility criteria limiting family income to ₹3.00 lakh exclude educated, unemployed SC youth who may have crossed this threshold but still face socio-economic barriers. The Kerala evaluation specifically identifies this as a major limitation requiring SCDC revamping.

Some reforms to remedy the same are as follows –

Immediate Reforms (2025-2026):

Restore Central Equity Support: Resume regular equity release with committed annual allocations. The government should provide at least ₹200 crores annually to maintain operational momentum.
Strengthen Monitoring Framework: Establish real-time monitoring systems with quarterly review mechanisms. Parliamentary Committee recommendations for adequate SC representation in the NSFDC Board should be implemented immediately.
Digitise Application Processes: Implement end-to-end digital platforms to reduce bureaucratic delays and enhance transparency. The PM SURAJ portal experience should be expanded across all SCDC operations.

Medium-term Structural Changes (2025-2030):

Revise Eligibility Criteria: Increase income ceiling to ₹5.00 lakh and introduce asset-based eligibility to include educated unemployed SC youth.
Expand Channelising Network: Strengthen partnerships with fintech companies and microfinance institutions to improve rural penetration, particularly in underserved Eastern states.
Integrate with Digital India: Link SCDC schemes with Aadhaar, Jan Dhan accounts, and Direct Benefit Transfer systems to reduce leakages and improve targeting.

Long-term Vision (2030-2035):

Performance-Based Funding: Implement outcome-based budget allocations tied to poverty reduction metrics and employment generation.
Sectoral Diversification: Expand beyond traditional sectors to include digital economy opportunities, green energy projects, and skill-based services aligned with Industry 4.0 requirements.
Impact Measurement: Establish robust impact assessment frameworks with third-party evaluations every three years to ensure accountability and continuous improvement.

The SCDC scheme’s potential for transformative impact on SC economic empowerment remains constrained by systemic challenges requiring urgent policy intervention. With proper reforms emphasising transparency, technology integration, and sustained financial commitment, SCDCs can become effective catalysts for inclusive growth. However, without addressing the critical issues of declining government support and institutional capacity gaps, the scheme risks further marginalisation of its intended beneficiaries.

References

Bushipaka, G., & Chaitanya, K. K. (2024). Challenges and Opportunities in the Implementation of SC Sub-Plan Schemes in Telangana. Journal of Research in Business and Management, 12(9), 82-88.
Centre for Market Research & Social Development. (2019). Evaluation Study on “Functioning of National Scheduled Castes Finance and Development Corporation (NSFDC”). Ministry of Social Justice and Empowerment. https://socialjustice.gov.in/public/ckeditor/upload/Summary%20Report-Evaluation%20of%20NSFDC_1648795113.pdf
Ministry of Social Justice and Empowerment. (2009). Scheduled Castes Development Bureau – About the Division. Government of India.
Ministry of Social Justice and Empowerment. (2019). Scheduled Castes Development Corporation (SCDCs): Revised Guidelines 2017-18. Government of India. https://socialjustice.gov.in/writereaddata/UploadFile/scdcorp09082019.pdf
Ministry of Social Justice and Empowerment. (2025). NSFDC Schemes – Performance and Guidelines. Government of India. https://nsfdc.nic.in/channel-patrners/scas
National Campaign on Dalit Human Rights. (2025). Dalit Adivasi Budget Analysis 2025-26. NCDHR.
NSFDC. (n.d.). Final Report – Evaluation Study of Credit Based Schemes of NSFDC. https://nsfdc.nic.in/UploadedFiles/other/publication/final%20report-evaluation%20studiy%20of%20credit%20based%20schemes%20of%20nsfdc-210416.pdf
NSFDC. (n.d.). Comprehensive Impact Assessment Study of NSFDC Schemes. https://nsfdc.nic.in/UploadedFiles/other/publication/final%20report-comprehensive%20impact%20assessment%20study%20of%20nsfdc%20%20schemes.pdf
Parliament of India. (2023). Twenty Ninth Report on Action Taken by the Government on NSFDC. Committee on the Welfare of Scheduled Castes and Scheduled Tribes.
Planning Commission. (2014). Revised Guidelines for Implementation of Scheduled Castes Sub-Plan (SCSP) by the States/UTs. Government of India.
Press Information Bureau. (2024). Year-end Review 2024 – Department of Social Justice and Empowerment. https://www.pib.gov.in/PressReleseDetail.aspx?PRID=1983216
State Planning Board Kerala. (2021). Working Group Report on Scheduled Castes Development. Government of Kerala.
UP Civil Services Magazine. (2025). Evaluating the Impact of Welfare Schemes for Scheduled Castes and Scheduled Tribes in Uttar Pradesh. https://uppcsmagazine.com/evaluating-the-impact-of-welfare-schemes-for-scheduled-castes-and-scheduled-tribes-in-uttar-pradesh/