Van Dhan Vikas Yojana

Policy Update
Paridhi Passi

Background

India has over 10.45 crore tribal people spread across more than 705 communities, most of whom live in or near forested areas. For these communities, Non-Timber Forest Produce (NTFP) is not just supplementary income, it is central to how households sustain themselves. This includes products like mahua, honey, tamarind, amla, sal leaves, and medicinal herbs. Studies show that roughly 20 to 40 percent of a tribal household’s total earnings come from Minor Forest Produce or MFP (TRIFED, 2024).

Despite depending so heavily on forest produce, tribal gatherers were not really seeing the benefits of it. Raw produce would get sold to middlemen at very low prices, and communities had no real way to process or market it on their own. Whatever value could have stayed within these communities was slipping away at every step.

The Van Dhan Vikas Yojana (VDVY) was launched on 14th April 2018 at Bijapur, Chhattisgarh, on Ambedkar Jayanti, by the Ministry of Tribal Affairs andTribal Cooperative Marketing Development Federation of India (TRIFED). Rather than treating tribal communities only as welfare beneficiaries, the scheme tries to turn them into micro-entrepreneurs who can earn better from the forest wealth they already have access to.

Objectives

The scheme essentially works towards three main goals:

The first is to increase tribal incomes by adding value to the forest produce they collect — through basic steps like sorting, processing, packaging, and branding it properly before selling.
The second is to build the entrepreneurial capacity of tribal Self Help Groups by providing them skill development and training so they can manage these activities on their own.
The third is to create market linkages at the local, state, and national level so that tribal producers are not entirely dependent on middlemen and can actually get better prices for what they collect (National Portal of India, 2024).

Functioning

The Van Dhan Vikas Kendra or VDVK is the basic unit through which the scheme operates. Each Kendra is structured as follows:

15 Self Help Groups with 20 members each, making 300 tribal members per Kendra
Rs. 15 lakhs provided by the central government per Kendra, meant to cover equipment, training, and operational costs
A token contribution of Rs. 1,000 from each member, which is kept small but is important for building a sense of collective ownership (India.gov.in, 2024)

At the Kendra level, the focus is primarily on primary processing of forest produce. This means activities like cleaning, sorting, grading, drying, and basic packaging of collected MFPs before they are sent further up the value chain. Members are also trained in quality standards and hygiene so that the produce can meet market requirements. In some Kendras, value addition goes a step further, with processing units set up for making products like honey jars, herbal powders, or packaged mahua, depending on what is locally available and viable.

Figure 1: Value chain approach under Van Dhan Vikas Yojana, from SHG formation to branding and marketing of tribal products.

Source: Press Information Bureau (PIB), Government of India.

Fifteen VDVKs are grouped together to form a Van Dhan Vikas Kendra Cluster or VDVKC, covering around 4,500 members in total. The cluster level is where more advanced processing and bulk marketing takes place. It also helps in pooling resources, sharing storage infrastructure, and negotiating better rates with buyers. This layered structure, from individual SHGs to Kendras to Clusters, is what gives the scheme its scalability, at least in theory.

In terms of governance, TRIFED acts as the nodal agency at the national level, responsible for fund disbursement, training coordination, and market linkage support. At the state level, State Nodal Departments oversee implementation and liaise between TRIFED and the districts. District Implementation Units handle the actual on-ground work, including Kendra registration, member onboarding, and monitoring of activities. This three-tier structure is meant to ensure that the scheme does not remain just a central government initiative but gets embedded into local administrative systems as well.

The overall target is 50,000 VDVKs across all tribal states and Union Territories, except Haryana, Punjab, and Delhi, which do not have Scheduled Tribe gatherers (National Portal of India, 2024).

Table 1: Key Structural Features of Van Dhan Vikas Yojana

Feature	Details
Launch Date	14th April 2018
Nodal Ministry	Ministry of Tribal Affairs
Implementing Agency	TRIFED
Basic Unit	Van Dhan Vikas Kendra (VDVK)
Members per VDVK	300 (15 SHGs of 20 members each)
Central Funding per VDVK	Rs. 15 lakhs
Member Contribution	Rs. 1,000 per member
Overall Target	50,000 VDVKs
States Covered	27 States and 2 UTs
Beneficiaries	Tribal NTFP gatherers and artisans

Source: TRIFED, National Portal of India, Ministry of Tribal Affairs (2024)

Performance

The scheme has shown decent growth over the years. By March 2021, around 33,360 VDVKs had been sanctioned across 23 states and 2 UTs, covering over 10 lakh tribal gatherers (PIB, 2021). In 2021-22, 1,009 new VDVKs were added and Rs. 149.77 crore was sanctioned for 3.02 lakh beneficiaries across 13 states (TRIFED Annual Report, 2021-22). By 2022, over 5.26 lakh gatherers had been onboarded across 1,756 VDVKs in 174 districts and total funds released were around Rs. 260 crore (Sarkari Yojana, 2022).

In terms of regional performance, the Northeast has clearly done the best, accounting for about 80 percent of all established VDVKs. Manipur is a particularly good example here — 100 clusters were set up out of which 77 were made operational, benefiting around 30,000 tribal entrepreneurs who are involved in collecting, processing, and selling forest products (PIB, 2021).

The stronger performance in states like Manipur, Odisha, and Madhya Pradesh can be attributed to a combination of factors — pre-existing Self Help Group networks, higher density of tribal forest-dependent populations, better coordination between state nodal departments and TRIFED, and in some cases, prior experience with MFP-based livelihoods programmes. These conditions made it easier to roll out Kendras quickly and get them functional on the ground.

Table 2: Year-wise Progress of Van Dhan Vikas Yojana

Year	VDVKs Sanctioned (Cumulative)	Beneficiaries Covered	Funds Released (Rs. Crore)
2019-20	1,205	3.6 lakh	~18
2020-21	2,216	~6.6 lakh	~33
2021-22	3,225	9.63 lakh	149.77
2022-23	~4,500	~13 lakh	~200
2023-24	~5,500	~16 lakh	~260

Source: TRIFED Annual Report 2021-22; PIB 2020, 2021; Sarkari Yojana 2022

Figure 1: MFP Procurement Value (Rs. Crore), 2018-19 to 2022-23

Source: PIB 2020; TRIFED Annual Report 2021-22; Ministry of Tribal Affairs 2023

Impact

The Covid-19 period was probably when the scheme’s value was most clearly visible. When the lockdown shut down most other income sources in April 2020, the government raised MSP for MFPs by up to 90 percent and increased procurement. Over Rs. 2,000 crore reached tribal communities directly between April and June 2020 (TRIFED, 2020), which helped a lot given that most households had very few alternatives at the time.

Women have also played a big role in how the scheme works on the ground, making up the majority of VDVK members across states. This has not only improved household incomes but has also given women greater financial independence at the family level, which is a fairly significant change in many of these communities (Kudumbashree, 2024). Through the Government e-Marketplace and events like Aadi Mahotsav, tribal products like honey, bamboo goods, and herbal items have started reaching national and international buyers as well, which these communities previously had no real access to (TRIFED Annual Report, 2021-22).

Emerging Issues

Despite the progress, there are some significant gaps that the scheme is yet to address:

The target is 50,000 VDVKs but only around 5,500 had been sanctioned by 2023-24, which is roughly 11 percent of the goal
Many sanctioned Kendras are not yet functional or generating any real income, with delays in equipment supply, training, and market linkage being recurring problems
In more remote areas, poor internet connectivity and low digital literacy continue to limit the effective use of e-commerce platforms (Superkalam, 2025)

State level performance has also been quite uneven. While the Northeast, Madhya Pradesh, and Odisha have shown relatively stronger results, several other states with large tribal populations are still lagging behind. The absence of independent evaluation data also makes it difficult to say with any confidence whether income gains from the scheme hold up over time (TRIFED Annual Report, 2021-22).

Suggestions

A state-wise, time-bound plan for operationalising VDVKs would help close the gap between what is sanctioned and what is actually working on the ground
Greater convergence with PM JANMAN, MGNREGS, and the Forest Rights Act could strengthen the scheme’s reach
Digital literacy training should be built into every Kendra from the start rather than being treated as an afterthought
Regular independent evaluations should be made a standard part of the scheme so there is some real accountability

Way Forward

Going forward, the scheme needs to move beyond sanctioning Kendras on paper and focus on making them genuinely functional and self-sustaining. Priority should be given to closing the infrastructure and training gaps in underperforming states through dedicated state-level action plans. Convergence with schemes like PM JANMAN and the Forest Rights Act should be pursued more systematically to strengthen both resource access and community ownership. Building digital literacy into every Kendra from the start, rather than as an add-on, will be essential for e-commerce linkages to work meaningfully. Most importantly, institutionalising independent evaluations will ensure that the scheme evolves based on evidence rather than targets alone.

References

India.gov.in. (2024). Pradhan Mantri Van Dhan Yojana. National Portal of India. https://www.india.gov.in/spotlight/pradhan-mantri-van-dhan-yojana

Kudumbashree. (2024). Van Dhan Vikas Kendra. https://www.kudumbashree.org/vdvk

Ministry of Tribal Affairs. (2023). Tribal Welfare and Development Initiatives. Government of India.

Press Information Bureau. (2020). Van Dhan Yojana to tribal economy’s rescue. Government of India. https://trifed.tribal.gov.in/node/922

Press Information Bureau. (2021). Van Dhan Vikas Yojana Progress Update. Government of India. https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1712326

Sarkari Yojana. (2022). PM Van Dhan Yojana 2024. https://sarkariyojana.com/pm-van-dhan-yojana-trifed-tribal/

Superkalam. (2025). Ensuring Tribal Welfare: Union Budget 2025-26. https://superkalam.com/current-affairs/articles/ensuring-tribal-welfare

TRIFED. (2020). Van Dhan scheme infuses Rs 2,000 crore into tribal economy. https://trifed.tribal.gov.in/node/922

TRIFED. (2022). Annual Report 2021-22. Ministry of Tribal Affairs. https://trifed.tribal.gov.in/sites/default/files/2023-10/TRIFED_Annual%20Report(2021-22).pdf

TRIFED. (2024). Van Dhan Yojana. https://trifed.tribal.gov.in/pmvdy

Tripura Directorate of Tribal Welfare. (2024). Pradhan Mantri Van Dhan Yojana. https://twd.tripura.gov.in/pradhan-mantri-van-dhan-yojana

About the Contributor

Paridhi Passi is a Research and Editorial Intern at IMPRI and a Political Science (Hons.) student at Daulat Ram College, University of Delhi. Her academic interests lie in public policy and governance.