For some entrepreneurs, capital trumps caste, but not always

I get suspicious when I get something easily,” says Riki Biswas, co-founder of Pointo, an electric vehicle service company, in Kolkata. The entrepreneur embraced the day-to-day struggle of running a startup: rickshaw drivers, to avoid fights with local thugs and choose to build a low-cap company. However, not all of Biswas’ problems are not work related.

As a member of the Dalit community, the 28-year-old feels acutely the lack of capital that comes from family or community networks. “That kind of support – like the Marwaris – would have been helpful when my father had a heart attack and I was short on money,” he says.

The case of Biswas illustrates the extra effort Dalit entrepreneurs have to make to do business. But, on the whole, does capital prevail over caste? Yes and no.

Statistics indicate that after 75 years of independence, Dalits have not achieved a commensurate share in Indian capitalism. Only 11.2% of non-agricultural owner-occupied settlements belong to Scheduled Castes (SC), according to data from the 2013 Sixth Economic Census. This is significantly lower than their 16.6% share in India’s total population. , according to the 2011 census. Even this is mainly due to their concentration in relatively smaller companies.

The 73rd National Sample Survey (NSS) of Micro, Small and Medium Enterprises conducted in 2015-2016 shows that SCs owned 12.5% ​​of micro enterprises, which drastically reduced to 5.5% for small and medium enterprises. less than 0.01% for medium-sized companies. Lower levels of wealth in the community, with their share being higher in lower wealth deciles, limit their ability to take risks.

“Only those of us who have the ‘business bug’ or who are ‘crazy’ can take a risk without any safety net,” says Nitin Mehandia, 38, who runs a modular furniture company based in Gurugram. “I quit my job and took the leap with 7,000 as seed capital. We talk about “calculated risk” these days, but the question of any calculation only arises when you have a starting capital”, explains Mehandia.

He worked for an auto parts company before taking a leap of faith in 2009. He started out as a labor contractor for piecemeal jobs like plumbing, electrical and carpentry as part of larger residential and commercial contracts. Gradually, he focused on the furniture part, and founded his company Universal Pride Interior Pvt Ltd in 2015, which achieves a turnover of more than 7 crore in 2021-22, and employs around 45 workers. He boasts of having clients like Indiabulls, Emaar, Spaze and Godrej.

Biswas began running solar power projects shortly after graduating in 2016 and ran an e-bike business at his alma mater Indian Institute of Technology (IIT), Guwahati. It has now boarded more than 2,000 electric three-wheelers and employs 22 people.

In an ideal world, capitalism and urbanization should have loosened caste chains. But a 2019 research paper suggested that caste affiliations determine trading relationships, even if the results turn out to be suboptimal.

The experiments of Mehandia and Biswas suggest that this is not the case. “I entered into my first residential project contract with a certain Mr. Pathak, who visited me in a low-level blue-collar settlement,” Mehandia explains. “He trusted me despite the deplorable state of my office.” Today, most of his clients, including many “upper castes”, know that he comes from a Scheduled Caste (SC) community. Biswas has not seen caste addressed on the business table and enjoys credit facility with Marwaris and Punjabis.

“Labelling any of our fabrics commemorating Dalit patterns or design won’t be strategically sensible or feasible until people become more inclusive,” says Munmun Biswas, 42, who founded Indiloom in 2017. His factory employs currently 50 people and manufactures digital products. printed fabrics for some well-known brands in the fashion industry. Aspiring to create a FabIndia-like brand, she cites the controversy over Diwali’s call as Jashn-e-Riwaaz last year to make her point. seen.

State support has proven useful for Dalit entrepreneurs. The Government of India endowed a special venture capital fund for SCs in 2014-15, which currently has a body of 616 crores. Apart from that, 450 crore has already been sanctioned for 120 companies at least 51% owned by SC contractors. Munmun also received 1.5 crore, with a repayment period of 10 years and at an interest rate of 4%, under this fund in 2019. It plans to raise another 3 crore later this year for the opening of a bigger factory.

But government money alone cannot support the dynamics within the community.

Some Dalit entrepreneurs raise funds through private capital. Biswas is able to tap into his network of IIT alumni, which the others are not. At $38.5 billion, India recorded the third highest amount of venture capital investment in the world, after the United States and China, in 2021. The Indian Chamber of Commerce and Industry Dalit tried to identify companies or private venture capitalists to cater specifically to Dalit entrepreneurs. , says Munmun, who leads his Eastern Region chapter. Easier access to funds will be essential for Dalit startups to transform into FabIndia, IKEA or Uber. Hopefully it won’t take 75 years to get there.

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