UPSC Mains 2014 GS Paper 2 Q11: model answer

Tribal land in Fifth Schedule areas cannot usually be sold to non-tribals, a rule meant to stop dispossession. But a bank will not lend against land that cannot be sold. A young tribal entrepreneur from Jharkhand who wants to open a shop in Ranchi often finds that the very law that protects his family keeps him from capital.

Protective schemes

Land transfer restrictions (Fifth Schedule, State laws such as the Chotanagpur Tenancy Act, 1908), reservation in jobs and education, and subsidies for traditional occupations.

How they can lead to exclusion from urban business

• No collateral: protected land cannot be mortgaged, so credit is scarce.
• Job preference: educated SCs and STs move into secure government jobs rather than business.
• Occupation-linked schemes keep people in traditional crafts rather than modern enterprise.
• Networks: urban business runs on caste and kin networks; Dalit entrepreneurs face discrimination from suppliers and customers.

Why the claim is only partly true

• Exclusion from business has older causes: caste discrimination, lack of capital and education.
• Without protection, many would have lost land and livelihood entirely.
• Reservation built a middle class that is now entering business.

Way forward

• Stand-Up India (2016): bank loans of ₹10 lakh to ₹1 crore for SC/ST and women entrepreneurs.
• Public procurement quota of 4% for SC/ST-owned MSEs.
• DICCI and venture funds for SC entrepreneurs.
• Credit guarantees in place of land collateral.
• Skilling and incubation in cities.

Protection should be a floor, not a ceiling: schemes must move from guarding resources to building capability.