India’s leading political parties and regional parties focus on various aspects of States’ developmental problems. But the key electoral concern remains the distressing state of unemployment among Dalit and Other Backward Classes (OBCs) youth and the distress of small and marginal farmers.

In this context, the idea of mass entrepreneurship will serve well to address the pressing issue of youth unemployment and poverty alleviation.

The youth unemployment crisis in aspirational States impacts marginalised communities, especially Scheduled Castes (SC), Scheduled Tribes (ST) and OBCs.

The findings of the Periodic Labour Force Survey 2022–23 show that while worker-population ratio (WPR), labour force participation rate (LFPR), and unemployment rate (UR) are consistently improving from 2017–18 to 2022–23, there has been a loss of ‘salaried’ jobs (22.8 per cent to 20.9 per cent) , ‘casual’ jobs (24.9 per cent to 21.8 per cent) and a rise in ‘self-employment’ (52.2 per cent to 57.3 per cent).

This suggests that ‘necessity entrepreneurs’ are setting up shop who need guidance and support to establish viable businesses.

In States like Chhattisgarh and Rajasthan, with a significant population SC-ST communities and OBCs, addressing youth unemployment is critical. Privatisation of PSUs and State jobs has impacted reservation for the underserved communities. Mass entrepreneurship holds the key, as it empowers individuals in rural and urban communities to launch their businesses and generate employment opportunities.

National and state-level entrepreneurship incubation programs not only create jobs but also encourage innovation, wealth generation, and economic development.

In Chhattisgarh, the BJP has promised to launch the Udyam (enterprise) Kranti Yojana, under which interest-free loans with 50 per cent subsidies will be provided to youth. The previous government formed the Chhattisgarh Other Backward Classes Advisory Council to encourage employment and entrepreneurship among backward castes.

For Mizoram, the incumbent government manifesto mentions they will create 1 lakh jobs through the Young Mizo Entrepreneurs Program (YmElevate) if voted to power, while in Madhya Pradesh, the Congress Party had promised an unemployment allowance for youth ranging from ₹1,500 to ₹3,000 per month for two years.

As seen over the last 2-3 election cycles, only promises of launching entrepreneurship programmes will not address the problem of youth unemployment. Parties that are voted to power must roll out well-designed action plans ‘on-the-ground’ to deliver on their campaign promises.

In 2018, the Chhattisgarh State government established the Atal Incubation Centre at NIT Raipur and Startup Village in Raipur to develop infrastructure, mentorship, networking, and access to funding to support budding entrepreneurs. Madhya Pradesh has taken proactive steps by amending its MSME policy to allocate 20 per cent industrial land for SC-ST entrepreneurs.

Additionally, Telangana’s forthcoming policy, coupled with a substantial ₹100 crore subsidy, indicates a strong approach to bolstering SC-ST entrepreneurship.

Rajasthan has initiated Start-up Rajasthan to promote entrepreneurship. Rajasthan Small Industries Corporation (RAJSICO), Rajasthan Venture Capital Fund (RVCF), and Rajasthan Industrial Development and Investment Corporation (RIICO) provide financial assistance, technical guidance, and infrastructure support. The Rajasthan Single Window Clearance System simplifies the regulatory process, making it easier for entrepreneurs to start and run their businesses.

Ease of access to finance: After creating awareness, the government should ensure that financial institutions are readily accessible to potential entrepreneurs from the backward class. The support ecosystem of banks and government departments, must be strengthened by simplifying lending criteria, increasing allocation for schemes like Mudra loans, easing rules to seek power and water connections, trade licenses, etc.

Successful examples include the Tamil Nadu government’s schemes to support women entrepreneurs, like the Tamil Nadu Corporation for Development of Women, the Tamil Nadu Urban Habitat Development Board (TNUHDB), which partners with local NGOs to run entrepreneurship awareness programmes for underprivileged youth in the suburbs of Chennai, and the Self-Employment Program for Youth (SEPY), which aims to ease access to finance.

Establishing Strong Market Linkages: Indian business leaders and investors must enroll as industry experts and advisors to create strong market linkages, share best practices, successes and failures, and serve as role models for youth.

Mentoring plays a crucial role in helping underprivileged youth overcome barriers and become successful entrepreneurs.

A cadre of dedicated mentors, embedded within institutions, can make a strong impact and hand-hold first-time entrepreneurs to build sustainable businesses.

For example, Kalyani, a first-time Scheduled Tribe clothing store owner in Rangareddy district (near Hyderabad), was assisted to obtain a bank loan of ₹3 lakh. She was mentored in sourcing the latest collections from local as well as national textile centres in Surat and Mumbai to improve her business profitability. She was also encouraged to resolve customer complaints on a priority basis to earn goodwill and attract repeat customers.

As the elections approach, young voters must adopt entrepreneurship to secure a brighter future for themselves and their communities.

Venkatesan is Founding and Managing Trustee, Bharatiya Yuva Shakti Trust; and Bhasin is Founder and Chairman, Clix Capital and Chairman, ICRIER