- Why in news
- On 22 September 2026 the Ministry of Social Justice and Empowerment released an update on its Economic Inclusion Division schemes. It covered the Venture Capital Funds for Scheduled Castes and Backward Classes and the begging rehabilitation component of SMILE.
- What it is
- The Venture Capital Fund for Scheduled Castes (VCF-SC) gives concessional finance to SC-owned companies so they can set up and expand viable enterprises. A similar fund exists for Backward Classes. SMILE is a Ministry scheme with a component for the comprehensive rehabilitation of persons engaged in begging.
- VCF-SC corpus and terms
- The fund has a corpus of Rs 750 crore. It gives assistance of Rs 10 lakh to Rs 15 crore at 4 per cent interest.
- ASIIM
- The Ambedkar Social Innovation and Incubation Mission was launched under VCF-SC on 30 September 2020. It gives up to Rs 30 lakh to young SC researchers and students for innovative ideas.
- SMILE begging rehabilitation
- The initiative was launched on 23 October 2023. Central assistance of Rs 46.16 crore has been released up to FY 2025-26.
- Implementing ministry
- These schemes are run by the Ministry of Social Justice and Empowerment through its Economic Inclusion Division.
Don’t confuse with VCF-SC vs VCF-BC: VCF-SC has a Rs 750 crore corpus, 4 per cent interest and a minimum of Rs 10 lakh. VCF-BC has Rs 200 crore, 6 per cent and a minimum of Rs 20 lakh.
Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.
Why it matters
- Concessional equity-style finance helps SC and BC entrepreneurs who find it hard to get credit, and creates jobs.
- Rehabilitation of persons engaged in begging links welfare with livelihood and dignity.
Problems
- Only 329 SC and 35 BC entrepreneurs are supported, which is small compared with the need.
- Disbursal lags approvals, and BC uptake is low.
Way forward
- Raise awareness and mentoring so more entrepreneurs can access the funds.
- Speed up disbursal and track outcomes of rehabilitated persons.
Put in your answer
VCF-SC and VCF-BC outcomes: The funds have supported 329 SC and 35 BC entrepreneurs and generated around 4,500 direct and indirect jobs.
Productive assets: Supported enterprises have created permanent assets worth nearly Rs 800 crore.
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UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Schemes with corpus, loan size and rate are lasting topics, but this is a progress update and Prelims asks schemes on fresh features.
Worth revising until Prelims 2028: most news questions come within two years of the event.