Panel for overhaul of minority finance body, private role

The report, which has been submitted to the Government, recommends that both minority and non-minority institutions should be invited to hold equity positions in the holding company. It also suggests that private institutions like the Tata Trust, Wipro, Cipla, Agha Khan Foundation, Wockhardt could be made partners in this venture.

NMDFC was set up in 1994 with the objective of promoting economic activities of minorities following some findings that the minorities were not able to obtain their fair share of credit from the nationalised banks.

The prime mandate given to the NMDFC was to provide concessional finance to the minorities living below double the poverty line for self-employment and educational purposes. But the committee has found that the performance of the corporation was way below the target. The total number of beneficiaries over the period since its conception is a mere three lakh whereas the target population is around 10 crore. The expert committee has also observed that the NMDFC has not been able to track beneficiaries to assess the impact.

While giving recommendations on how to improve the performance of the NMDFC, the committee has prioritised the scope of activities of the MP to three thrust areas — Education, Livelihood and Social Infrastructure. The core activity of the MP would be livelihood programmes which would be functionalised through creation of funds which could be compatible with Islamic principles of Financing.

The EC is of the view that Sharia-compliant financing would help in attracting partnerships or funding from international funders like the Kuwait Fund, Islamic Bank of Dubai and Abu Dhabi Investment Authority.

In education, the focus of attention would be on non-physical infrastructure — teachers, curricula, teaching methodology while in social infrastructure, the focus would be on roads, IT, and telecommunication access. Major recommendations of the committee underline the need to “move away from the traditional apex model of institutional building” and to introduce a partnership model with a strong flexible structure. It suggests that the initial equity of the MP should be Rs 100 crore with Government investing Rs 49 crore and non-Government entities holding Rs 51 crore.