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Prandhan Mantri Van Dhan Vikas Yojana (PMVDVY)—A catalyst for the growth of tribal forest economy

IBEF, Knowledge Centre

Jul 02, 2021 11:47

According to the India State of Forest Report (ISFR) published by the Forest Survey of India, which is an organisation under the Ministry of Environment, Forest and Climate Change (MoEFCC), in 2019, the country’s total forest cover was 7,12,249 sq. km., which was 21.67% of its geographical area. In terms of area, Madhya Pradesh had the largest forest cover, followed by Arunachal Pradesh, Chhattisgarh, Odisha and Maharashtra. In terms of forest cover—as a percentage of the total geographical area—the top five states were Mizoram (85.41%), Arunachal Pradesh (79.63%), Meghalaya (76.33%), Manipur (75.46%) and Nagaland (75.31%). As per the Census 2011, the country’s rural population accounted for 68% of the total population and comprised ~6,50,000 villages, of which ~1,70,000 were forest fringe villages (FFVs), which are villages located in the proximity of forest areas.

India's forests have mainly survived in areas that have a high percentage of tribes as their economy, culture and other aspects of life are inextricably linked to forests. Over the years, they've built an enormous base of traditional knowledge on forests and forest products. Minor Forest Produce (MFP) is a key livelihood resource for tribes living in forested areas. The Forest Rights Act defines MFP as all non-timber forest products of plant origin such as bamboo, scrub, stump, cane, cocoon, honey, wax, lac and medicinal plants. India receives MFPs worth ~Rs. 20,000 crore (US$ 2,726 million) annually.

As tribes derive 20-40% of their annual revenue from the MFPs, the Ministry of Tribal Affairs (MoTA) introduced a measure to support MFP market development and ensure fair returns to tribal gatherers. MoTA launched ‘Minimum Support Price (MSP) for MFP’ scheme (a mechanism to market MFP through MSP and develop a value chain for MFP) in 2011. As of January 2021, there were 87 MFPs in the MSP list.

Following this, Prime Minister Mr. Narendra Modi launched Pradhan Mantri Van Dhan Vikas Yojana (PMVDVY), a component of the ‘MSP for MFP’ scheme, on April 14, 2018, to boost livelihood of tribes living in forest areas. With the Ministry of Tribal Affairs as the nodal department at the central level and Tribal Cooperative Marketing Development Federation of India (TRIFED) as the nodal agency at the national level, the government aimed to implement this scheme across the country and help generate tribal incomes by harnessing the wealth of forest, i.e., Van Dhan.

Under the PMVDVY programme, the government plans to improve tribal incomes by value-adding, branding and commercialising MFPs by establishing Van Dhan Vikas Kendras (VDVKs) that will promote and facilitate tribal entrepreneurship. The programme will empower tribes by providing support in terms of financial capital, training and mentoring to expand their businesses and enhance earnings. It also addresses formidable problems such as possession of land/house with no rights, restrictions in collection of MFPs, exploitation by middlemen, displacement from national parks and wild sanctuaries and lack of development in forest villages that are widely faced by the Indian tribes.

Overview of PMVDVY   

  • Under the scheme, VDVKs act as common facility centres to procure and implement value-addition to locally available MFPs. With value-addition to raw forest products, the share of tribes will increase by 70-75% (from the present share of 20-25%) in the value chain; however, pricing of value-added products is driven by the market and based on contextual factors.
  • In addition, a Van Dhan Vikas Cluster (VDVKC) comprises 15 tribal VDVK Self-Help Groups (SHGs) in a contiguous geographical area, preferably in the same or nearby villages. Each VDVK SHG comprises ~20 MFP gatherers, i.e., ~300 beneficiaries per VDVKC (which are subject to variation as per local conditions), where ~60% beneficiaries of the VDVK SHGs are tribal. As of May 24, 2021, 37,259 VDVK SHGs (subsumed into 2,224 VDVKCs) have been sanctioned by TRIFED.
  • The PMVDVY functions via a three-tier pyramidal structure, with an apex body at the national level, which is led by TRIFED, followed by a state-level producer company (including VDVKCs) and a district-level federation (and below) comprising VDVK SHGs.
  • National level: Includes an apex body at the national level that is responsible for monitoring and overseeing the PMVDVY and developing a national marketing platform for MFPs.
  • State-level producer company: Consolidates state-level MFP aggregation, processing and marketing plan and provides tertiary value-addition (packing, branding and marketing of MFP) through common facilities. Offers services such as training, technology dissemination; and provides bank-linkages and insurance to VDVKs.
  • District level: Aggregates and provides primary/secondary level value-addition to MFPs at block/district level and offers collective services for input purchases, capacity building, etc.
  • The scheme is completely (100%) funded by the central government, with TRIFED providing Rs. 15 lakh (US$ 20,414) to each VDVKC. In addition, the working capital requirement is estimated to be Rs. 7.5 lakh (US$ 10,207) per VDVKC; this is funded through excess corpus or raised from financial/banking institutions. In addition, they can also tap CSR funds of private sector firms.

Key Recent Initiatives by TRIFED            
May 2021: TRIFED and NITI Aayog partnered to implement the VDVK initiative under PMVDVY in 39 tribal clusters of all aspirational districts of India
Based on the discussion between Mr. Amitabh Kant, CEO, NITI Aayog and Mr. Pravir Krishna, Managing Director, TRIFED, it was decided that a dedicated team consisting members from TRIFED and NITI Aayog team will work together to implement PMVDVY in 39 tribal aspirational districts that are situated in Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Telangana and Tripura. As a part of this partnership, a special focus will be on these aspirational districts where the tribal population accounts for >50% of the total population.

For expansion of the VDVY programme, an additional 9,900 VDVK SHGs (subsumed into 660 VDVKCs) have been proposed to be established in these aspirational districts. As of May 24, 2021, 5,325 VDVK SHGs (subsumed into 355 VDVKCs) have been established in these districts. This is expected to boost employment for ~2 lakh tribal families. Through this association, NITI Aayog will support TRIFED in the concept of convergence (collaboration between state & central government) for the VDVK mission with Article 275 (1), District Mineral Foundations (DMF), and Scheduled Tribe Component (STC) of different ministries.

April 2021: Sankalp Se Siddhi
TRIFED launched the ‘Sankalp Se Siddhi – Village and Digital Connect’ drive to transform the country’s tribal ecosystem. Through this programme, TRIFED aims to activate VDVK SHGs located in the tribal villages. It is a 100-day initiative (starting from April 01, 2021), where 150 teams (10 in each region from TRIFED and state agencies/mentoring agencies/partners) will visit ten villages each. In the given duration, teams will cover 100 villages in each region and 1,500 villages across the country. In addition, TRIFED aims to achieve Rs. 200 crore (US$ 27.27 million) in sales in FY22 from this programme. Moreover, these teams will also identify tribal artisans & other groups and empanel them as suppliers so that they can have access to larger markets through the Tribes India network—both physical outlets and

August 2020: TRIFOOD Project
TRIFOOD project is a joint initiative of the Ministry of Food Processing Industry, Ministry of Tribal Affairs and TRIFED. Under this scheme, a tertiary value-addition centre will be set up in Jagdalpur, Chhattisgarh and Raigad, Maharashtra, at a cost of ~Rs.11 crores (US$ 1.50 million).

These units will be professionally operated by reputed food processors who will operate these facilities for a designated period of time under the overall administrative control of TRIFED so that the assets created are efficiently utilised as per their installed capacities and designed objectives. This will create local employment opportunities for tribal communities and provide entrepreneurial opportunities in terms of commodity linkages with units. In addition, ~25% of the total raw materials is expected to be sourced locally from the identified VDVK SHGs in the catchment areas as per the grade and quantity requirement, consistently for five years.

TRIFED is exploring to set up similar MFP-based industrial parks in partnership with state governments of Madhya Pradesh, Chhattisgarh, Goa, Uttar Pradesh and Jharkhand.

Collective efforts of tribes—starting from collection of forest products to value-addition in primary, secondary and tertiary stages—has led to the huge success of PMVDVY in tribal areas of Orissa, Rajasthan, Chattisgarh, Maharashtra, Andhra Pradesh, along with the Northeast that comprises 80% of established VDVKs. This initiative implemented by TRIFED, to make India self-reliant under the 'Aatmanirbhar Abhiyan', with the motto ‘Go Vocal for Local Go Tribal–Mera Van Mera Dhan Mera Udyamar’ will enable complete transformation of the tribal economy in the country.