Following the demise and disintegration of the Soviet empire in 1991, state control and regulation based socialist economy lost much of its sheen and it gave way to the ideology of the triumphant group of nations led by the USA in the Cold War in the form of neo liberalism resulting in radical alteration in the nature of the state across the globe. Nations after nations began to lay down totally revised blue print of development on the basis of norms of the neo liberal ideology. State manifested a perceptible shift from control and regulation regime through ‘licence, quota, permit raj’ mechanism to the more liberal avatar of facilitator of growth where it preferred to confine itself tothe task of creating the right environment to foster rapid growth. In the altered ideological perspective, liberalization, privatization and globalization became the buzz words of development and ‘Retreat of State’ from welfare activities in the garb of structural adjustment became quite prominent in nations displaying unequivocal proclivity to pursue the neo liberal ideological path. With dwindling state support to marginalised sections of the society and intense competition among the competing business groups to grab larger chunk of the cake of development, it gradually became quite evident that only the fittest can manage to survive in the changed global scenario. Marginalised groups like the Scheduled Tribes thoroughly deprived of the tools of empowerment like education, skill and economic resources began to find themselves on the periphery of the altered national and global system. In this paper, an attempt will be made to explore the challenges facing the Scheduled Tribes in the new political economy of the 21st century.