The Congress-led UPA government's recent bid to make it statutorily mandatory for 4% of its annual purchases to be made from units run by Dalits and tribals is being seen as a poll sop to woo the Dalit and tribal votebank just ahead of assembly polls in Uttar Pradesh.
Dalits own a sizeable number of enterprises in the state where 21.15% of the total population is Scheduled Castes (SCs).
And if the Centre implements the quota policy for micro, small and medium enterprises (MSMEs) before the state assembly polls, the move may benefit the Congress party.
Together, SCs and STs account for 10 % of the total MSMEs in the state.
The move has, however, not gone down well with industry in the state. "The government should act as a facilitator and if it really intends to help Dalit and tribal entrepreneurs, it should simplify rules and procedures," said DS Verma, executive director of the Indian Industries Association.
Awadh Chamber of Commerce general secretary Chandra Kumar Chhabra said industry would be comfortable as long as the quota was capped at 4%.
"There is every possibility that that percentage may go up, as parties vie with each other to offer more to these sections," he said.
Economists, however, see the move promoting entrepreneurship among weaker sections of society.
"This kind of positive discrimination will help Dalit and tribal entrepreneurs, no doubt," Giri Institute for Developmental Studies director, AK Singh said.'
But he cautioned against operational problems, such as bogus units sprouting up to reap the benefits.