For the use of Members of Parliament Not for Publication Reference Note On WELFARE SCHEMES FOR OBCs 1 Reference Division (LARRDIS) Lok Sabha Secretariat New Delhi November 2014 The Reference Note is for personal use of the Members in the discharge of their Parliamentary duties, and is not for publication. This Service is not to be quoted as the source of information as it is based on the sources indicated at the end/in the text. This Service does not accept any responsibility for the accuracy or veracity of the information or views contained in the note/collection. WELFARE SCHEMES FOR OBCs An Overview The Second Backward Classes Commission, commonly known as the Mandal Commission, constituted under Article 340, submitted its Report in 1980. In the light of this Report, the Government of India had, vide O.M. dated 13 August 1990 of the Department of Personnel & Training, issued an order providing 27% reservation in Central Government posts for persons belonging to the Socially and Economically Backward Classes, also referred to as “Other Backward Classes” or OBCs. With the amendment of Article 15 of the Constitution in January, 2006 [Nothing in this article or in sub-clause (g) of clause (1) of article 19 shall prevent the State from making any special provision, by law, for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes or the Scheduled Tribes in so far as such special provisions related to their admission to educational institutions including private educational institutions, whether aided or unaided by the State, other than minority educational institutions referred to in clause (1) of article 30] and the enactment of the Central Educational Institutions (Reservation in Admissions) Act in January, 2007, listing of Other Backward Classes has become relevant for admission in Central Educational Institutions also. Under this Act, OBC students are entitled to 27% reservation in Central Educational Institutions. Demographic Profile The caste-wise census was discontinued after the 1931 census. Hence, census data is not available on the population of OBCs in the country. However, the Mandal Commission had estimated OBC population at 52% of the total population while the National Sample Survey Organization, based on its 61st round survey (2004-05), has estimated it to be 41%2. Constitutional Provisions Clause (4) of Article 15 of the Constitution of India permits the State to make special provisions for the advancement of “any socially and educationally backward classes of citizens” including admission to educational institutions. Article 16 (4) permits the State to make 2 India, Ministry of Social Justice and Empowerment, Annual Report 2013-14, pp.89-90 -2- provisions for reservation in appointments for “any backward class of citizens…. .” Article 340 of the Constitution provides “that the President may by order appoint a Commission to investigate the conditions of socially and educationally backward classes”. Clause (1) of Article 38 of the Constitution makes it obligatory for the State to “strive to promote the welfare of the people by securing and protecting as effectively as it may a social order, in which justice, social, economic and political, shall inform all the institutions of the national life”. Cause (10) of Article 338 mentions that for the purpose of that article, references to Scheduled Castes “shall be construed as including references to such Other Backward Classes as the President may, on receipt of the report of a Commission appointed under clause (1) of article 340 by order specify and also to the Anglo-Indian Community3”. Welfare Schemes Having recognized that educational and economic support for backward classes has not been adequate and that there is disparity between them and the non-backward sections of the population at every level, it was felt that earnest efforts were required to introduce various schemes specifically for the target group in order to provide them a level playing field. Hence, the following schemes were formulated and are being implemented since 1998-99: 1. Pre-Matric Scholarship to the OBCs for studies in India The aim of this Scheme is to motivate children of OBCs studying at pre-matric stage. Scholarships are awarded to students belonging to OBCs whose parents/guardian’s income from all sources does not exceed to Rs,44,500/- per annum. The Physical and Financial Achievements under the Scheme during the last three years are as follows: 3 Ibid., p. 90 -3- The details of Notional Allocation (State-wise) under “Pre-Matric Scholarship for OBC Students” during the year 2010-2014 are given in Annexure-I. 2. Post-Matric Scholarship to the OBC for studies in India The Scheme is intended to promote higher education by providing financial support to OBC students studying at post-matric/post-secondary levels leading to their earning Ph.D. degrees. The scholarships are awarded through the State Government/UT Administration to which the applicant belongs for study in recognized institutions. Under the Scheme, 100% central assistance is provided to State Governments/UT Administrations over and above their Committed Liability. The Physical and Financial achievements under the Scheme during the last three years are as follows: The details of Notional Allocation (State-wise) under “Post-Matric Scholarship for OBC Students” during the year 2010-2014 are given in Annexure-II. 3. Construction of Hostels for OBC Boys and Girls The Scheme of Construction of Hostels for OBC Boys and Girls has been revised w.e.f. 2010-11. The Scheme aims at providing hostel facilities to students belonging to socially and educationally backward classes, especially from rural areas to enable them to pursue secondary and higher education4. The Physical and Financial achievements under the Scheme during the last three years are as follows: 4 Ibid., pp. 92-94. -4- The details of Notional Allocation (State-wise) under “Construction of Hostels for OBC Boys and Girls” during the year 2010-2014 are given in Annexure-III. 4. Assistance to Voluntary Organizations for Welfare of OBCs The main purpose of this scheme of grants-in-aid to voluntary organizations is to involve the civil society and non-Government sector for improving the socio-economic conditions of OBCs, through skill up-gradation in various trades, to enable them, to start income generating activities on their own and get gainfully employed. Under the Scheme, financial assistance is provided to Non-Governmental Organizations for imparting vocational training in various trades like craft, type and short-hand, carpentry, dari making, electrician, motor winding and fitting/plumbing, printing/composing/book binding, spinning and weaving, TV, VCR and Radio repair etc. The Government of India meets 90% of the approved expenditure of the training programme5. The Physical and Financial achievements under the Scheme during the last three years are as follows: 5 Ibid., pp. 95-96 -5- 5. Scheme under National Backward Classes Finance and Development Corporation (NBCFDC) The NBCFDC was set up in the year 1992, as a Company, 'not for profit' under Section 25 of the Companies Act 1956 under the aegis of the Ministry of Social Justice and Empowerment, Government of India. The main objective of the Corporation is to provide concessional financial assistance to the members of the Backward Classes for their socio- economic development and to upgrade the technological and entrepreneurial skills of the individuals or groups belonging to the Backward Classes through State Channelising Agencies (SCAs) nominated by respective State Government/UT. The following activities are implemented under NBCFDC: I. Loan Schemes a) Term Loan: Maximum loan limit: Rs. 10 Lakh per beneficiary. NBCFDC Loan: Upto 85% of the project cost in general scheme. Balance 15% to be shared by SCA/Beneficiary. b) Margin Money Loan: Maximum loan limit: Rs. 10 Lakh per beneficiary. NBCFDC Loan: Upto 40% of the project cost, balance amount of project cost is contributed by Bank/Financial Institution (50%), SCA (5%), and the beneficiary (5%). c) Micro Finance: Maximum loan limit: Rs. 50,000/- per beneficiary. NBCFDC Loan: Upto 90% to 95% of the project cost. Balance 5%-10% to be shared by SCA/Beneficiary. II. New Swarnima Scheme for Women Under this scheme, women belonging to backward classes living below double the poverty line can obtain loan upto Rs.1,00,000/- @ 5% p.a. NBCFDC loan: 95% of Project Cost. III. Education Loan Scheme NBCFDC provides Educational Loans to the students of Backward Classes living below double the poverty line for pursuing general/ professional/technical courses or trainings at graduate and/or higher levels. Maximum loan limit in India is Rs.10 lakh and abroad is Rs.20 Lakh. The rate of interest is 4% p.a. and girl students will get at special concessional rate of interest @ 3.5% p.a. NBCFDC loan: 90% for study in India and 85% for study abroad6. 6 Ibid., pp. 96-97. -6- IV. Saksham Scheme This is a special scheme under Term Loan for young professionals belonging to Backward Classes of the target group. Maximum loan limit is Rs.10 Lakh per beneficiary. The loan upto Rs.5 Lakh bears interest @ 6% p.a. and loan above Rs.5 Lakh to Rs.10 Lakh bears interest @ 8% p.a. NBCFDC loan: 85% of Project Cost. V. Shilp Sampada Scheme The objective of this scheme is to upgrade the technical and entrepreneurial skill of Backward Classes by way of providing training and financial assistance under Term Loan for self- employment in traditional craft etc. The artisans and handicraft persons of Backward Classes living below double the poverty line can obtain loan upto Rs.10 Lakh under this scheme. Loans upto Rs.5 Lakh bears interest @ 6% p.a. and above Rs.5 Lakh to Rs.10 Lakh bears interest @ 8% p.a.