How Dalit entrepreneurs fight caste with capital

"I become suspicious when I get something easily,” says Riki Biswas, co-founder of Pointo—an electric vehicle service company, in Kolkata. The entrepreneur has embraced the everyday struggle of running a startup: from learning to smoke bidis to bond with e-rickshaw drivers, to avoiding brawls with local thugs and choosing to build an asset-light company. Not all of Biswas’s troubles, however, are work-related.

As a member of the Dalit community, the 28-year-old acutely feels the lack of capital that flows from family or community networks. “That kind of support—like among the Marwaris —would have come in handy when my father had a heart attack and I was short on cash,” he says.

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Biswas’s case exemplifies the extra mile Dalit entreprenurs have to go to do business. But, on balance, does capital trump caste? Yes, and no.

Statistics say that after 75 years of independence, Dalits have not attained a proportionate share in Indian capitalism. Only 11.2% of non-agricultural proprietary establishments are owned by Scheduled Castes (SCs), shows data from the sixth economic census 2013. This is significantly lower than their share of 16.6% in India’s total population, according to census 2011. Even this is largely on account of their concentration in relatively smaller firms.

The National Sample Survey (NSS) 73rd round on micro, small and medium enterprises conducted in 2015-16 show that SCs owned 12.5% of micro enterprises, which drastically reduced to 5.5% for small, and less than 0.01% for medium enterprises. Poorer wealth levels in the community, with their share being higher in lower wealth deciles, constrain their ability to take risks.

“Only those among us who have got the ‘business bug’, or are ‘mad’, can take a risk without any safety net,” says 38-year-old Nitin Mehandia, who runs a modular furniture company based out of Gurugram. “I quit my job and took the plunge with ₹7,000 as seed money. People talk of ‘calculated risk’ these days, but the question of any calculation only arises when you have some capital to begin with,” says Mehandia.

He worked for an auto parts company before taking a leap of faith in 2009. He started off as a labour contractor for piecemeal jobs like plumbing, electricals and carpentry in bigger residential and commercial contracts. Gradually, he started focusing on the furniture part, and founded his company Universal Pride Interior Pvt Ltd in 2015, which had a turnover of over ₹7 crore in 2021-22, and employs about 45 workers. It boasts of having the likes of Indiabulls, Emaar, Spaze and Godrej as its clients.

Biswas started executing solar power projects shortly after his graduation in 2016 and ran an e-bike company at his alma mater Indian Institute of Technology (IIT), Guwahati. He has now on-boarded over 2,000 electric three-wheelers and employs 22 people.

In an ideal world, capitalism and urbanization ought to have loosened shackles of caste. But a research paper in 2019 suggested caste affiliations determine business dealings, even if the outcomes turn out to be suboptimal.

Mehandia and Biswas’s experiences suggest it is not so. “I struck my first residential project deal with one Mr Pathak, who visited me in a low-grade, blue-collar colony,” says Mehandia. “He had his faith in me despite the shabby state of my office.” Now, most of his clients, many “upper-caste”, are aware that he comes from a scheduled caste (SC) community. Biswas has not experienced caste being broached on the business table, and enjoys credit facility with both Marwaris and Punjabis.

“Tagging any of our fabric commemorating Dalit patterns or design will not strategically be sound or feasible till people become more inclusive,” says 42-year-old Munmun Biswas, who founded Indiloom in 2017. Her factory currently employs 50 people, and manufactures digital printed fabrics for some well-known brands in the fashion industry. Aspiring to build a FabIndia-like brand, she cites the controversy over calling Diwali as Jashn-e-Riwaaz last year to make her point.

State support has proved to be useful for Dalit entrepreneurs. The government of India endowed a special venture capital fund for SCs in 2014-15, which currently has a corpus of ₹616 crore. Out of it, ₹450 crore has already been sanctioned to 120 companies with at least 51% shareholding by SC entrepreneurs. 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. She plans to raise another ₹3 crore later this year for opening a larger factory.

But government money alone cannot sustain the drive within the community.

Some Dalit entrepreneurs are raising money through private capital. Biswas is able to tap into his IIT alumni network, which is not the case with others. With $38.5 billion, India saw the third highest amount of VC investments in the world, after the US and China, in 2021. The Dalit Indian Chamber of Commerce and Industry has been trying to identify private VC firms or investors to especially cater to Dalit entrepreneurs, says Munmun, who heads its eastern region chapter. Easier fund access will be critical for Dalit startups to turn into a FabIndia, IKEA or Uber. Hopefully, we will not take 75 years to get there.