Current Affairs · · GS3 · Economy

National SC-ST Hub links SC/ST-owned enterprises with government buyers

The National SC-ST Hub, run by NSIC under the MSME Ministry since 2016, helps SC/ST entrepreneurs with credit, training, testing and market access. It aims to help their enterprises win a 4% share of Central government purchases. By July 2026 it had assisted over 1.9 lakh beneficiaries, though actual procurement still trails the target.

Event date:

REq1
  1. Context1 / 6
    • A government review has set out the progress of the National SC-ST Hub (NSSH), which supports enterprises owned by Scheduled Caste and Scheduled Tribe entrepreneurs.
    • The scheme was launched by the Prime Minister on 18 October 2016, under the Ministry of Micro, Small and Medium Enterprises.
    • It is implemented by the National Small Industries Corporation (NSIC), a public sector undertaking under the MSME Ministry.
    • Its core aim is to help SC/ST-owned micro and small enterprises (MSEs) meet the reserved share of government purchases under the Public Procurement Policy.
  2. Key concepts2 / 6

    1. What does the policy require?

    Central Ministries, Departments and Central Public Sector Enterprises must buy at least 25% of their annual purchases from micro and small enterprises. Within that 25%, a share of 4% is earmarked for MSEs owned by SC/ST entrepreneurs, and 3% for those owned by women.

    2. What is its legal basis?

    The policy was notified in 2012 under Section 11 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. A 2018 amendment raised the overall target to 25%, with effect from 1 April 2019.

    3. Why does a reserved share help?

    Think of it as a guaranteed buyer. A small firm that knows the government will buy some of its output can plan, borrow and grow. The Hub's job is to help SC/ST firms become capable of filling that order.

  3. Key highlights3 / 6

    The table summarises the main financial support components of the scheme.

    ComponentWhat it coversSupport limit
    Special Credit Linked Capital SubsidyPlant, machinery and equipment bought with bank credit25% subsidy, up to ₹25 lakh
    Bank loan processing feeFees on loans from banks, NBFCs and State Finance Corporations80%, up to ₹1 lakh
    Bank guarantee chargesPerformance guarantees for government tenders80%, up to ₹1 lakh
    Testing feeProduct testing and BIS certification80%, up to ₹1 lakh a year
    Export Promotion Council membershipJoining export networks80%, up to ₹20,000 a year
    E-commerce portal membershipSelling on GeM, e-Khadi, Tribes India and MSME Mart80%, up to ₹25,000 a year
    Management trainingCourses at the top 50 NIRF management institutes90%, up to ₹1 lakh a year
    • Market access. Through Single Point Registration with NSIC, registered MSEs get free tender sets and exemption from the Earnest Money Deposit. The Special Marketing Assistance Scheme supports participation in trade fairs and exhibitions.
    • Capability building. Training, mentoring and a Business Accelerator Programme cover pricing, operations and preparation for government tenders. Training has been aligned with demand on GeM, in trades such as welding, CAD/CAM, food production and tailoring.
  4. Note4 / 6

    Progress so far

    The table shows the headline outcomes reported by the government.

    IndicatorFigureReference period
    Total beneficiaries assisted1,90,414As on 31 July 2026
    Candidates trained54,499As on 31 July 2026
    Government procurement from SC/ST-owned MSEs₹4,013.42 crore2025-26
    SC/ST-owned MSEs supplying to government12,5242025-26
    MSEs given capital subsidy3,160, worth ₹356.10 crore2016 to March 2026
    Districts covered by capital subsidy233, across 27 States and UTs2016 to March 2026

    Procurement from SC/ST-owned MSEs has grown sharply since 2016. Their share of total Central procurement, however, is reported to be well under 2% in 2025-26, still short of the 4% target.

  5. Way forward5 / 6
    • The gap with the target. Many buyers still fall short of the 4% sub-target. Stronger monitoring, and annual procurement plans drawn up by each ministry, can close the gap.
    • Access to credit. First-generation entrepreneurs often lack collateral and a credit history. Easier guarantees, and linkage with Stand-Up India loans, can help.
    • Awareness and reach. Benefits reach only some districts. Outreach through States and district industries centres can widen coverage.
    • Quality and scale. Government buyers need consistent quality. Testing support, certification and the clustering of small units can raise competitiveness.
    • From supplier to competitor. Market linkages through GeM and private value chains can reduce dependence on reserved procurement alone.
  6. Note6 / 6
    REq1

Sources

Syllabus

PaperSubjectSub-topic
GS3EconomyIndian economy: inclusive growth; MSMEs; government procurement
GS2Social JusticeWelfare schemes for vulnerable sections: Scheduled Castes and Scheduled Tribes
PrelimsEconomyGovernment schemes for MSMEs; the Public Procurement Policy for MSEs; GeM; NSIC

Topics

Human Development and Sustainable DevelopmentIndustryPublic FinanceGovernance

Practice questions

  1. With reference to the Public Procurement Policy for Micro and Small Enterprises, consider the following statements: 1. Central Ministries and CPSEs must procure at least 25% of their annual purchases from MSEs. 2. Out of this, 4% is earmarked for MSEs owned by SC/ST entrepreneurs. 3. The policy was notified under the Competition Act, 2002. Which of the statements given above are correct?

    1. 1 and 2 only
    2. 2 and 3 only
    3. 1 and 3 only
    4. 1, 2 and 3
    Show answer

    Answer: A. Statements 1 and 2 are correct. Statement 3 is wrong: the policy was notified in 2012 under Section 11 of the MSMED Act, 2006, which is the statute governing micro, small and medium enterprises. Within the 25% overall target, 4% is reserved for SC/ST-owned enterprises and 3% for women-owned ones.

    Difficulty: medium · statement

  2. The National SC-ST Hub scheme is implemented by which one of the following?

    1. Small Industries Development Bank of India
    2. National Small Industries Corporation
    3. Ministry of Social Justice and Empowerment
    4. National Scheduled Castes Finance and Development Corporation
    Show answer

    Answer: B. The National Small Industries Corporation, a public sector undertaking under the Ministry of Micro, Small and Medium Enterprises, implements the scheme. The Hub sits under the MSME Ministry rather than the Ministry of Social Justice and Empowerment, because its instrument is enterprise support and public procurement.

    Difficulty: easy · statement

  3. Under the National SC-ST Hub, registered SC/ST-owned MSEs receive which of the following benefits in government tenders? 1. Free tender sets 2. Exemption from Earnest Money Deposit 3. Automatic award of all tenders below ₹25 lakh Select the correct answer using the code given below.

    1. 1 only
    2. 1 and 2 only
    3. 2 and 3 only
    4. 1, 2 and 3
    Show answer

    Answer: B. Single Point Registration with NSIC gives free tender sets and exemption from the Earnest Money Deposit, both of which lower the cost of bidding. Statement 3 is wrong: there is no automatic award of any tender. The policy reserves a share of purchases, but each contract is still won competitively.

    Difficulty: medium · statement

Mains practice

Answer-writing practice on this article. Attempt it first, then open the hints.

  1. GS3 · 250 words

    Public procurement can be a tool for inclusive entrepreneurship. Examine with reference to the National SC-ST Hub, and suggest measures to meet the 4% procurement target.

    Show hints
    1. Explain the mechanism: a reserved share of public purchasing creates assured demand, which is what lets a small firm plan, borrow and invest.
    2. Set out the barriers the scheme is designed to remove, from collateral and credit history to testing, certification and the cost of bidding.
    3. Use the gap between the reserved share and the share actually procured to show that demand alone does not build supply capacity.
    4. Argue for accountability on the buyer side, through ministry-wise annual procurement plans and monitoring of the sub-target.
    5. Conclude on the exit from dependence, with clustering, quality certification and linkage to private value chains and e-marketplaces.