SC/ST Hub

About SC/ST Hub

As per the Public Procurement Policy for Micro and Small Enterprises, it is mandatory to procure a minimum of 25% of the total annual value of goods and services from the Micro and Small Enterprises, in which 4% of goods and services should be procured from SC / ST owned Micro and Small Enterprises and 3% of goods and services should be procured from Micro and Small Enterprises owned by women, for the Central Government Ministries, Departments, and Public – Sector Undertakings. Tenders are published by Central Public Service Enterprises (CPSEs), Public Sector Units (PSUs), and Government Organizations. These tenders are then bid upon and after the order is won, a Performance Bank Guarantee (PBG) is mandatorily required to be submitted for the CPSEs or large firm tenders, against the total value of the tender. This PBG agreement acts as a guarantee that the bank would pay the specified amount in case the Micro & Small Enterprises which is the applicant, fails to meet the ‘financial’ and ‘performance’ obligations. The bank charges an annual fee against its guarantee which generally ranges from 0.5 – 3% per annum. This application fee is paid one time, at the time of issue of the PBG. However, this charge varies based on the ‘risk profile’ of the applicant and various other aspects. Although, these charges are of small amount but somehow add a little burden on the part of entrepreneurs. To lower this burden on the Scheduled Cast / Scheduled Tribes Micro & Small Enterprises (SC / ST MSEs) the government has set the National SC-ST Hub (NSSH). This committee is chaired by Shri Milind Kamble the chairman of the Dalit Indian Chamber of Commerce and Industry (DICCI). It provides financial assistance to the SC / T MSEs by reimbursing the bank charges that any SC / ST MSE has paid for issuing PBG for government tenders. For the SC-ST Hub the Ministry of Micro, Small and Medium Enterprises, from 2016 to 2020, made an initial fund allocation of Rs 490 crore.

The objective for providing financial assistance to the ST / ST MSEs under this scheme are as follows:
• For achieving the target of 4% procurement of goods and services under the Public Procurement Policy, by the SC / ST MSEs.
• To provide exposure to the SC / ST MSEs to the global market.
• To provide a competitive platform to the MSEs and help them with their marketing skills.
• To provide exposure to large industries and buyers.
The nodal agency to look after the implementation of this scheme is the National Small Industries Corporation Ltd. (NSIC).
The financial assistance under this scheme is provided from the National SC-ST Hub (NSSH) fund and has a limit of 50% or Rs 1,00,000 whichever among the two is less. This amount is exclusive of GST and other taxes applicable. Although, in a financial year the scheme can be availed multiple times by the SC / ST MSEs the amount remains limited as mentioned above. The reimbursement s done based on valid documents or receipts showing payment details, bank statements showing debit of BG charges, GST invoice generated through the system, and a copy of PBG issued (which should be certified).
For availing the benefit under this scheme, the following criteria need to be fulfilled:
• If a proprietorship firm wants to be recognized as SC / ST MSE the proprietor should belong to SC / ST category.
• If a partnership wants to be recognized as SC / ST MSE then at least 51% of shares should be held by the SC / ST partners.
• If a private limited company wants to be recognized as SC / ST MSE then the company should have at least 51% shares held by SC / ST promoters.
• The SC / ST MSEs must have their Udyog Aadhaar Memorandum (UAM) number, PAN number and must be registered under the Goods and Service Tax (GST) to avail of the scheme benefit.

After the evaluation and approval of the reimbursement by the NSSHO and NSIC, the reimbursement amount is transferred to the bank account of the applicant from where the PBG charges are debited and this is directly transferred through the Public Financial Management System (PFMS). The claims by the applicant are required to be submitted within 45 days from the time PBG is issued.
This scheme can be availed by the PBG issued on or after 14th November 2018 till the NSSH scheme exists or there are any revisions or amendments made to this scheme.

Impact

The SC / ST Hub also provides professional support to the SC / ST MSEs and provides training and skill development programs. In 2016 – 17 it has provided for 3 capacity building training programs (skill entrepreneurship development) to 83 candidates, in 2017 – 18 64 programs with 1,311 candidates, in 2018 – 19 288 programs to 6,514 candidates and for the year 2019 – 20 provided with 513 programs to 13,362 candidates which come to a total of 868 programs to a total of 21,270 candidates. 823 crore procurements have been made from SC / ST owned MSEs by 162 CPEs and a total of 17,537 SC / ST candidates have been assisted as per the reports of the SC-ST Hub under the Ministry of Micro, Small & Medium Enterprises. This scheme is helping nurture the Micro and Small Enterprises through the involvement of the marginalized, that is the Scheduled Tribes and Scheduled Castes, giving them equal opportunities to grow and develop financially as well as socially.