PREFACE

Since Independence, the Government of India has launched a

number of Central Schemes, Centrally Sponsored Schemes (CSS) and

Community/Area Development Programmes in the areas of health &

family welfare, education, employment & poverty eradication,

agriculture, women & child development, sanitation, housing, safe

drinking water, irrigation, transport, tribal development, social welfare,

etc both in rural and urban areas of the Country. The main objectives of

all these schemes are to generate employment, improve quality of life,

remove poverty & economic inequality and human deprivation.

Besides, these schemes are also aimed at creation of basic infrastructure

and assets essential for economic development in rural areas.

The introduction of Swarnajayanti Gram Swarojgar Yojna(SGSY)

was a major step in promotion of employment in rural areas

leading to the introduction of Self Help Groups(SHG).

INTRODUCTION

Programme for self-employment of the poor has been an important

component of the antipoverty programmes implemented through

government initiatives in the rural areas of India. At present the

Swarnjayanti Gram Swarozgar Yojana (SGSY) is the major on-going

programme for self-employment of the rural poor. The programme was

started with effect from 01.04.1999 after review and restructuring of the

erstwhile IRDP and its allied programmes namely TRYSEM, DWCRA,

SITRA and GKY, besides MWS. The earlier programmes are no longer

in operation with the launching of the SGSY.

The basic objective of the SGSY is to bring the assisted poor families

(Swarozgaris) above the Poverty Line by providing them income-

generating assets through a mix of Bank Credit and Governmental

Subsidy. The programme aims at establishing a large number of micro

enterprises in rural areas based on the ability of the poor and potential of

each area. The brief details of the programme are discussed briefly.

The SGSY is different from earlier Programmes, in terms of the strategy

envisaged for its implementation. It has been conceived as a holistic

Programme of self-employment. It covers all aspects of self-employment

of the rural poor viz. organisation of the poor into Self Help Groups

(SHGs) and their capacity building, training, selection of key activities

and planning of activity clusters, infrastructure build up, technology and

marketing support. A major shift of the SGSY, from the erstwhile

programmes, is its emphasis on the social mobilisation of the poor. The

programme focuses on organisation of the poor at grassroots level

through a process of social mobilisation for poverty eradication. Social

mobilisation enables the poor to build their own organisations { Self-

Help Groups (SHGs) } in which they fully and directly participate and

take decisions on all issues that will help them in coming above the

poverty line. A SHG may consist of 10-20 persons belonging to families

below the Poverty Line and a person should not be a member of more

than one group. In the case of minor irrigation schemes and in the case

of disabled persons, this number may be a minimum of five (5). Efforts

have to be made to involve women members in each SHG and 50% of

Self-Help Groups in each block should be exclusively of women. Group

activities are to be given preference and progressively, majority of the

funding should be for Self-Help Groups.

REVIEW OF LITRATURE

The SGSY emphasizes assistance to the Swarozgaris for those activities

which have been identified and selected as key activity in terms of their

economic viability in the area. Each Block has to concentrate on 4-5 Key

Activities based on local resources, occupational skills of the people and

availability of markets so that the Swarozgaris can draw sustainable

incomes from their investments. The SGSY adopts a Project approach

for each Key Activity and Project Reports are to be prepared in respect

of each identified Key Activity. The Banks and other financial

institutions have to be closely associated and involved in preparing these

Project Reports, so as to avoid delays in sanctioning of loans and ensure

adequacy of financing. Selection of the activities has to be done with the

approval of the Panchayat Samitis at the Block level and District Rural

Development Agency/Zilla Parishad at the District level. These Key

Activities should preferably be taken up in Activity Clusters so that the

backward and forward linkages can be effectively established and

economies of large scale production can be reaped. A major share of the

assistance to be provided under the SGSY should also be for Activity

Clusters.

In this project we will analyse and identified the real situation regarding

SGYS ,how it is able to full fill its objectibe ,what are the leakages

inside plane etc . basicaly it is conist of things which are discussed.

The SGSY aims at providing self-employment to villagers through the

establishment of Self-help groups. Activity clusters are established based

on the aptitude and skill of the people which are nurtured to their

maximum potential. Funds are provided by NGOs, banks and financial

institutions.

Since its inception, over 2.25 million Self-help groups have been

established with an investment of Rs. 14,403 crores, profitting over

6.697 million people

Government-run District Level Development Agencies (DRDA) and the

respective State governments also provided training and financial aid.

The programme focusses on establishing microenterprises in rural

areas. The SHGs are usually created by selecting individuals from the

Below poverty-line (BPL) list provided by the Gram sabha. The SHGs

are divided into various blocks and each of these blocks concentrated on

4-5 key activities. The SGSY is mainly run through government-run

DRDAs with support from local private institutions, banks and

Panchayati raj institutions.

The Government also assists villagers in marketing their products by

organizing melas or fairs, exhibitions, etc.

In earlier research, researchers baically focus on positive aspects of the

project ,and how it is helping the people but they did not think of the

negative aspects of the programm . the programm is also having some

negative points so we will discuss these things also in the project.

RESEARCH METHODLOGY

The research work was primarily done with the secondary data available

on various government websites. The data was collected by visiting site

of SGSY and direct interaction with the Swarozgaris . The data was also

collected from different magazines , newspapers, self awareness,

television, news and internet . Information was collected about financial

and physical performance and adequacy of the implementation

mechanism for the schemes.

OBJECTIVE OF THE STUDY

The specific objectives of the evaluation study include the assessment /examination of the following:

1. The type of mechanism adopted and arrangements made for planning co-ordination, monitoring and implementation of the scheme.

2. The extent to which allocations, releases and utilization of funds were made as per the guidelines of the scheme.

3. To portray as to what extent the scheme has generated the needed benefits.

4. To analyze socio-economic and demographic characteristics of the beneficiaries of the scheme, so as to assess the extent to which the guidelines for identifying the beneficiaries/villages have been followed.

5. To identify the problems in the implementation of the scheme and reasons for tardy implementation, if any.

The SGSY was intended to provide self-employment to millions of

villagers. Poor families living below the poverty line were organised into

Self-help groups (SHG)s established with a mixture of government

subsidy and credit from investment banks. The main aim of these

SHGs was to bring these poor families above the poverty line and

concentrate on income generation through combined effort. The

scheme recommended the establishment of activity clusters or clusters

of villagers grouped together based on their skills and abilities. Each of

these activity clusters worked on a specific activity chosen based on the

aptitude and skill of the people, availability of resources and market

potentiality.

The SHGs are aided, supported and trained by NGOs, CBOs,

individuals, banks and self-help promoting institutions. Government-run

District Level Development Agencies (DRDA) and the respective State

governments also provided training and financial aid. The programme

focusses on establishing microenterprises in rural areas.

The SHGs created may have a varying number of members based on the

terrain and physical abilities of the members. It goes through three

stages of creation:

Group formation Capital formation through the revolving fund and skill

development and Taking up of economic activity for skill generation.

The SHGs are usually created by selecting individuals from the Below

poverty-line (BPL) list provided by the Gram sabha. The SHGs are

divided into various blocks and each of these blocks concentrated on 4-5

key activities. The SGSY is mainly run through government-run DRDAs

with support from local private institutions, banks and Panchayati raj

institutions.

The Government also assists villagers in marketing their products by

organizing melas or fairs, exhibitions, etc.

The Swarnajayanti Gram Swarozgar Yojana (SGSY), a credit-based

scheme sponsored by the Government of India for poverty alleviation, is

perhaps the largest of its kind in the world. It was first announced in

1997 to commemorate fifty years of India's independence and first

allocations for it under the Ministry of Rural development (MORD)

were included in the GOI budget of 1999/2000. The MORD was to fix

the shares of each district in the country roughly on the basis of relative

numbers of poor residing there. 75% of the funds would come from the

Union Government and each state government would match it for the

remaining 25%. Both parts of the funds are to go directly to the District

Rural Development Cells (DRDCs); in each district, the DRDC is in

charge of executing the scheme.

Hypothesis

Proper infrastructure is essential for the success of micro enterprises.

The infrastructure may be either for production, processing, quality

testing, storage or marketing. The lack of proper attention to this item

has been one of the drawbacks of IRDP. Although provision had been

made for expenditure on infrastructure, the investments made did not

necessarily correspond to the needs of the self-employed.

The focus of the programme is on establishing a large number of micro-

enterprises in rural areas based on the ability of the poor and potential of

each area, both land-based and otherwise, for sustainable income

generation. Due emphasis is being laid on different components such as

capacity building of the poor, skill development training, credit, training,

technology transfer, marketing and infrastructure. The subsidy allowed

under the SGSY is 30 per cent of the total project cost, subject to a

ceiling of Rs 7,500 (for SC/STs and disabled persons subsidy limit is 50

per cent of the project cost subject to a ceiling of Rs 10,000). For Self-

Help Groups (SHGs), subsidy would be 50 per cent of the project cost

subject to a ceiling of Rs. 1.25 lakh or per capita subsidy of Rs. 10,000,

whichever is less. There is no monetary ceiling on subsidy for minor

irrigation projects for SHGs as well as individual swarozgaris. The

SGSY has a special focus on the vulnerable groups among the rural

poor. SC/STs account for at least 50 per cent, women 40 per cent and the

persons with physical disability constitute 3 per cent of the Swarozgaris

respectively. The SGSY seeks to promote multiple credits rather than a

one-time credit injection.

SGSY will seek to ensure that the infrastructure needs for the identified

activities are met in full, so as to enable the Swarozgaris to derive the

maximum advantage from their investments. Planning for infrastructure

will be made in close concert with the banks. As indicated earlier, the

project report for each key activity should clearly identify the existing

infrastructure and the additional infrastructure that needs to be created.

It should be noted that the creation of additional infrastructure should be

meaningful and should only be in the nature of providing the missing

critical links. The proposals for infrastructure development should be

drawn up in consultation with Bankers and form part of the Annual Plan

of the Block and District.

Selection could be made up to 10 key activities per block based on local

resources, occupational skills of the people and availability of market so

that the Swarozgaris can draw suitable incomes from their investment.

Under SGSY each block should concentrate on 4-5 selected key

activities and attend to all aspects of these activities in a cluster

approach, so that swarozgaris can draw sustainable income from their

investments. The scheme lays special emphasis on development of

swarozgaris through well designed training courses tailored to the

activities selected and the requirement of each swarozgari. the active

involvement of panchayati raj institutions, banks and NGOs. It is

financed on 75:25 cost-sharing basis between the Centre and the states.

Since the inception of the programme 22.52 lakh Self-Help Groups

(SHGs) have been formed covering 66.97 lakh swarozgaris. These

include 35.54 lakhs members of the SHGs and 31.43 lakh individual

Swarozgaris who have been assisted with a total investment of Rs.

14403.73 crore. Out of total Swarozgaris assisted, SCs/STs were 45.54

per cent and women 47.85 per cent. During 2006-2007 the Central

allocation for the scheme is Rs.1200 crore

DISCUSSION OF THE PROGRAMME

SGSY is basically operated by the ministry of rural development of

India. Programme operates in rural areas. It helps the people who come

below poverty line. Programme is basically makes the people

employable. Programme makes group of people, such groups are called

self help groups.

The SHGs may consist of 10-20 members and in case of minor

irrigation, and in case of disabled persons and difficult areas, i.e., hilly,

desert and sparsely populated areas; this number may be a minimum of

five. Self Help Groups should also be drawn from the BPL list approved

by the Gram Sabha. The SHGs broadly go through three stages of

evolution such as group formation, capital formation through the

revolving fund and skill development and taking up of economic activity

for income generation.

The process of SHG formation could be divided into phases . While the

process of SHG formation cannot be standardized, a few Guidelines

could be useful to the field level functionaries.

Self Help Groups go through various stages of evolution

  Group formation (formation, development and strengthening of the

groups to evolve into self-managed people’s organisation at grassroots

level. In our society, members are linked by various common bonds like

caste, sub-caste, community, blood relation, place of origin, activity etc.

The facilitators must identify these natural groups which are commonly

called ‘Affinity Groups’. Identification of such Affinity Group is critical

for the progress and success of the Self Help Group. This would require

staying with the people for some period to facilitate proper

understanding and establish rapport with them. Therefore, while forming

Groups, facilitators must recognise the natural bonds and affiliations

existing within the society.

Group Stabilization through thrift and credit activity amongst the

members and building their Group Corpus . The group takes up internal

loaning to the members from their Group Corpus . The groups should

save regularly and begin to lend to members. This provides the

members with opportunities to acquire the skills to prioritize scarce

resources, to assess the strength of each member , to time the loans and

schedule of repayments and fix interest rates. The group

institutionalizes the need to introduce sanctions for deviant behaviour,

which could include delay in repayments, arriving late or absenting from

meetings etc.

 Micro credit, the Group Corpus is supplemented with Revolving

Fund sanctioned as cash credit limit by the Banks or the group could

also have access to credit under the Self Help Group-Bank Linkage

Programme of NABARD.

 Micro enterprise development, Group takes up Economic Activity,

of their choice for income generation. This phase would include

Entrepreneurship Development as well as Skill Development training of

the members of the Group to enable them to successfully implement the

chosen activity. All the Groups, particularly Groups formed with

members who are skill less, asset less, destitute and living under abject

poverty might not graduate to the stage of Micro-enterprise with in the

time frame indicated in the Guidelines. Such groups may continue to

remain in the Micro-Finance stage for a longer period of time and may

require intensive training and capacity building inputs to enable them to

reach higher levels of income generation.

Scope:

This programme covers families below poverty line in rural areas of the

country. Within this target group, special safeguards have been provided

by reserving 50% of benefits for SCs/STs, 40% for women and 3% for

physically handicapped persons. Subject to the availability of the funds,

it is proposed to cover 30% of the rural poor in each block in the next 5

years.

Funding:

Financial assistance to Swarozgaris under SGSY comprises of two

components viz. loan and subsidy. SGSY is a credit-linked scheme and

credit is the key element. Subsidy is only a minor and enabling

component. The major part of investment consists of bank credit from

financial institutions comprising commercial banks, cooperative banks

and regional rural banks.

Subsidy under SGSY will be uniform at 30% of the project cost, subject

to a maximum of Rs.7500/-. In respect of SC/STs, however, these will

be 50% and Rs.10000/- respectively. For groups of Swarozgaris

(SHGs), the subsidy would be at 50% of the project cost subject to per

capital subsidy of Rs.10,000/- or Rs.1.25 lakhs, whichever is less. There

will be no monetary limit on subsidy for irrigation projects.

Subsidy will be back-ended. Banks would disburse the full project cost

including subsidy to the Swarozgaris as loan. The benefits of subsidy

will also be available to Swarozgaris who prefer to avail themselves of

required working capital in the form of cash credit.

The Swarnjayanti Gram Swarozgar Yojana (SGSY) is financed on 75:25

cost sharing basis between the Centre and the States.

Infrastructure Development under SGSY    During the year 2000-2001, Rs. 92,59,425 lakhs were utilised towards Infrastructure Development under SGSY. The details of the schemes implemented are given as follows :-

1. Work shed for WDCS at Purba Ghughumari & Jiranpur Rs. 1,90,5222. Work shed for WDCS at Patlakhawa & Sajerpur Rs. 1,90,5223. Work shed for WDCS at Gosanimari - I & II Rs. 1,90,5224. Work shed for WDCS at Belacoba Rs.    95,261

5.Work shed for WDCS at Ghoksadanga & Hindustanmore

Rs. 1,90,522

6.Construction of Pump House with 67 STW Masonary Chambers

Rs. 7,58,775

7.Construction of Printing House as a common facility centre at Baronachina

Rs. 6,50,223

8.Construction of Cattle Shed at Pachagarh, Mathabhanga

Rs. 6,17,337

9.Construction of Cattle Shed at Pachagarh, Mathabhanga

Rs. 6,55,600

10.

Installation of 5 nos. Rural Coolers & Purchase of Cryogen andall kits forBackward Integration of House Dairy Schemes

Rs. 8.00,000

11.Purchase of LN2 Storage Vessel of 950 lts. capacity from IBPfor installation at Cooch Behar Dairy Premise

Rs. 6,50,000

12.Purchase of one LN2 Carriage Vessel of 500 lts. capacity from IBPfor installation at Cooch Behar Dairy Premise

Rs. 6,73,000

13.Purchase of 200 units of Milk Can & 50 units of Milk Testing Kit

Rs. 7,40,000

14.

Construction of 2 nos. of Godowns for   i) Cattle Feed  ii) WMP/SMP Godowns at the premise of Cooch Behar Dairy

Rs. 7,72,964

15. Work Shed for WDCS at Tapurhat & Kalakata Rs. 1,90,52216. Work Shed for WDCS at Barasakdal Rs.    95,26117. Work Shed for WDCS at Dhandhinguri Rs.    95,261

18.Dairy Construction of Horizontal Extension of Cooch Behar DairyBuilding, Part - I at Cooch Behar premise

Rs. 9,38,329

19.Dairy Construction of Horizontal Extension of Cooch Behar DairyBuilding, Part - II at Cooch Behar premise

Rs. 7,36,804

20. Miscellaneous Rs.    28,000TOTAL = Rs.92,59,425

 Strategy:

SGSY is a Credit-cum-Subsidy programme. It covers all aspects of self-

employment, such as organisation of the poor into self-help groups,

training, credit technology, infrastructure and marketing. Efforts would

be made to involve women members in each self-help group. SGSY lays

emphasis on activity clusters. Four-five activities will be identified for

each block with the approval of Panchayat Samities. The Gram sabha

will authenticate the list of families below the poverty line identified in

BPL census. Identification of individual families suitable for each key

activity will be made through a participatory process. Closer attention

will be paid on skill development of the beneficiaries, known as

swarozgaris, and their technology and marketing needs.

Key Activities under Swarnajayanti Gram Swarozgar Yojana

Sl.no. Name of the ActivityTentative Project Cost *

Employment Prospect

A. Cottage & Handicrafts Industries and Service Sector/Business :-

1. Jute Rope Manufacturing 15,000 4

2. Fatia Dhokra 20,000 3

3. Clay Doll and Image 15,000 3

4. Wooden Furniture 20,000 3

5. Bamboo & cane (handicraft articles) 20,000 3

6. Bamboo Products (Dhara, Dali, etc.) 15,000 3

7. Pati Manufacturing 20,000 3

8. Blacksmith 15,000 2

9. Sholapith articles 20,000 4

10. Chanachur & Dalmut manufacturing 25,000 3

11. Paper Packet manufacturing 15,000 3

12.Umbrella manufacturing and

repairing25,000 3

13. Village Bakery and Biscuit 25,000 5

manufacturing

14. Tinsmith 15,000 2

15. Nylon Bag manufacturing 25,000 3

16.Concrete well-ring, Pillar

manufacturing40,000 4

17.Ricksaw, Ricksaw Van-body

manufacturing40,000 4

18. Cycle / Ricksaw repairing 35,000 3

19. Cotton Side-bag manufacturing 25,000 3

20. Tooth Powder manufacturing 20,000 3

21. Tanning (salt curing of hide & skin) 40,000 4

22. Pumpset & Power-Tiller repairing 20,000 2

23. Ricksaw / Ricksaw Van 6,000 1

24. Saloon 15,000 2

25. Decorators 50,000 4

26. Village Pan, Bidi Shop 20,000 1

27. Ready-made garments Shop 25,000 1

28. Vegetable Vendor 10,000 1

29.Fishing Net manufacturing and

Fishing15,000 2

B. Agriculture and Others :-

B1. Banana cultivation 20,000 3

B2. Pan Boraj cultivation 20,000 3

B3. Papaya cultivation 20,000 3

B4. Lemon cultivation 20,000 3

B5.Vegetable cultivation (kitchen

garden)30,000 3

B6. Pumpset (5 H.P. Diesel) with 3" STW 25,000 2

B7. Milch Cow (cross breed) 2 nos. 42,000 2

B8. Piggery 30,000 3

B9. Ginger cultivation 30,000 3

B10. Turmeric cultivation 30,000 3

* implies for financial year 2001-2002 (as per Annual Action Report)

Key Activities for Self-help Groups under S.G.S.Y.

  Name of ActivityTentative Project Cost *

Employment Prospect

1. Power Tiller (2 nos.) 2,26,000 10

2. Milch Cow (cross breed) 10 nos. 2,55,000 10

3. Bamboo products 65,000 10

4. Pati Shilpa 87,000 10

5. Clay Modelling 70,000 10

6. Pumpset with STW (group of 5 heads) 2,50,000 5

7. Mustard Oil Ghani (power driven) 5,00,000 10

8. Ice & Ice Candy manufacturing 4,00,000 10 + 10

9. Husking Mill cum Wheat Grinding 3,50,000 10

10. Shalpata Plate, Dish, etc. 3,00,000 10 + 3

11. Bakery Unit 3,50,000 10 + 4

12. Piggery 2,50,000 10 + 3

Target Group

Families Below the Poverty Line (BPL) in rural areas constitute the

target group of the SGSY. Within the target group, special safeguards

have been provided to vulnerable sections, by way of reserving 50%

benefits for SCs/STs, 40% for women and 3% for disabled persons.

 

How to Seek Assistance:

For assistance under the programme, District Rural Development

Agencies and Block Development Officers can be contacted. They will

provide a detail information about the programme what are the essentials

that are required in running a SHG and how the funding will be managed

and regarding the help provided from the government side.

SGSY is being implemented by the District Rural Development

Agencies (DRDAs), with the active involvement of Panchayati Raj

Institutions (PRIs), the Banks, the Line Departments and the

Non-Government Organisations (NGOs

ANALYIS OF THE PROGRAMME

The principal aim of this scheme is to bring BPL families to APL

status within three years. The main difference with the previous IRDP

DWCRA scheme is to encourage group loans and group enterprise and

ultimately to stop giving individual loans to members of the groups.

Funding for the project is shared by the Centre and The States on a

75:25 ratio

Initially groups are formed with 10 or 15 persons belonging to the BPL

families. This group is called a Self Help Group (SHG) and the

individual members of the group Swarojgaris. There is provision under

the scheme to involve local NGOs to help the DRDC in forming such

groups.

The funds received by the DRDC are kept in a savings bank accounts

The DRDC can open their account with branches of the principal

participating banks in the field. The funds deposited in the saving

account earn interest at the usual rates till the amount is given as loans to

the Swarojgaris.

In the first six months the group members are taught to save money i.e.

they have to build up a corpus fund by saving a certain amount every

week/month. These savings are kept in a local or field bank.

After six months, the groups is evaluated by a team where the Project

Director, a member of the Block Development Office and a

representative of the bank are present. If they pass the evaluation test

they are given Grade I status. At this stage they are paid Rs. 10,000. - as

a revolving fund. Individual members can borrow from this money

either for business purposes or for personal consumption. They do not

have to pay any interest. They are also given Rs. 15,000. - as loan by the

bank, which is called the cash credit or matching corpus fund.

After completion of one year, according to performance and again going

through an evaluation process, the group gets Grade II status.After a

group gets Grade II status they get credit cum subsidy facilities. This

stage is called bank credit linkage. Subsidy under SGSY is uniform at

30% of the project cost, subject to a maximum of Rs. 10,000. - For

groups of Swarojgaris (SHGs) the subsidy is 50% of the project cost

subject to per capita subsidy of Rs. 10,000.- or Rs. 1.25 lakhs whichever

is less.

The SGSY is a credit-cum-subsidy programme. The main purpose

behind the SGSY is to help families below the poverty line to earn a

higher income that can sustain them at a level above the poverty line.

The scheme envisages that an assisted family will come out of poverty

within three years of joining the scheme. During this period they will be

closely monitored and helped at each stage, not just with credit, but with

sound productive ideas, training and know-how for them, and help to

market their products at economic price. Typically in a block, the

scheme expects to assist about 300-600 persons in a year.The work is to

be done by organizing the rural poor into self-help groups (SHGs) for

undertaking economic activities. The new approach ushered in with the

scheme incorporates the lessons learnt from the workings of several

earlier poverty alleviation schemes and is much more comprehensive.

Apart from providing financial support, the promoters are to ensure that

members of the SHGs also receive the necessary training for conducting

the activities and to manage the project and it’s accounting. In addition,

the facilitators of the activities would also ensure that there is adequate

infrastructure and marketing opportunities within reach of the groups.

Details of its salient features are as follows:

The cluster approach

Instead of supporting myriad different activities, the scheme in

each block would concentrate on promoting a cluster of a few activities.

This cluster will comprise not more than ten but preferably four or five

key activities for each district. The District level SGSY committee will

arrange to get a detailed project report for each activity and get it vetted

by the concerned bank. This cluster for each region is selected after

carefully considering the viability of each of those activities taking into

account locally available resources, skills, markets and infrastructure.

The Swarozgaris, i.e. the beneficiaries under the scheme, can either be

individuals or groups, but policy makers prefer the group approach

because groups can undertake larger activities that can be run at

economic scale. In any case, all Swarozgaris are to be members of SHGs

and begin the group through pooling their savings, making internal loans

to group members out of that pool and monitoring their timely

repayment. The groups are the guarantors of all loans to members,

whether as individuals or when working in a cluster. This is true also of

the bank loans that they get for their economic activities.

The agencies involved

The scheme requires active participation of many agencies. The District

Rural Development Cell in each place (DRDC) is to do the coordination.

Panchayet Raj institutions are to help in selecting the potential

beneficiaries; they are also to participate in selection of the activities.

Banks are to provide the necessary credit as well as act as monitors at

several stages of the formation and development of the SHGs. Both

government and non-government organizations (NGOs) are to come

forward for socially mobilizing the under-privileged and to help them to

organize into SHGs that can work harmoniously and productively. Local

officials as well as local elected representatives are to participate in

SGSY committees at several levels. In addition, other line agencies, like

irrigation department, roads department, electricity boards etc are to be

invited to cooperate with the DRDC and modify their own development

plans to ensure that the infrastructure necessary for the selected activities

is available in that area.

Financing

The scheme is sponsored by the Ministry of Rural development of the

Union government; it determines the amount of funds that each district

in each state is to receive every year on the basis of its assessment of the

dimensions of poverty there as well as its capacity to utilize the funds. It

undertakes to provide 75 % of those funds into a pool of resources

earmarked for the scheme. State governments are to contribute the

remaining 25% on a matching basis to make up the total allocated

amount for each district. Central funds for the scheme are to be released

directly to the DRDCs in two installments during each year, one at the

beginning of the financial year and the other after 60 % of the initial

funds are utilized. As soon as central funds are released, the state

government has to send to the DRDCs its 25 %.

The funds from this pool are for all expenses for organizing and

facilitating the formation and running of the SHGs, to supplement its

core revolving fund through a subsidy of Rs. 10,000 per group as well as

to provide them with other stipulated subsidies.

30% of the pooled resources are meant for expenses of the

organizing department 22 and of the organizations (GOs as well as

NGOs) who act as facilitators of each group. A part of the pool is to be

set aside in a fund for training the beneficiaries in all the skills required

for organizing, operating and managing the activities of the SHGs.

SGSY funds are not meant for infrastructure building for which the

DRDCs are to seek help from other line departments; but they can be

used for some small but crucial investments of that kind.

Banks' involvement

Apart from public funds for the scheme, local branches of public sector

banks are to act as main financiers of the economic activities of the

groups. They are to provide credit both for acquiring fixed assets as well

as for their running expenses. The government subsidy to which groups

become entitled on undertaking economic activities is to be a part of the

amount released by the banks. But banks are not allowed to charge

interest on the subsidy amount and can use that amount to set off against

its liabilities

Financing arrangements:

• The group starts collecting and banking the savings of its members

with the selected bank branch.

• Once the group is stable, the bank releases for its use as a revolving

fund a cash credit flow of Rs. 25,000, of which Rs.10, 000 is a

subsidy from the central fund.

• This revolving fund is to be used for any requirements of the group

members; the group is to monitor its repayment.

• When the group takes up a productive activity, it gets a further loan-

cum-subsidy from the bank for use in its requirements of buying

assets as well as for meeting its running costs.

• This amount is to be Rs. 10,000 per member or Rs. 1.25 lakhs for

the group as a whole, whichever amount is less.

•50% of this amount comes as a subsidy. Though the bank also

releases that amount, it cannot charge interest on it.

• Interest rates for the loans will be notified by the Reserve Bank of

India or by NABARD.

• Those authorities will also determine the security norms for the

loans only if repayments by the SHGs are not according to the

agreed schedule.

Apart from providing credit at the required time, banks are in overall

charge of ensuring that the basic objective of the scheme, viz. to remove

poverty of households on sustained basis, is fulfilled. They are therefore

concerned with the nature of the activities chosen and the capabilities of

the Swarozgaris to carry them out successfully. Therefore they are to be

closely associated at each stage, from selection of the beneficiaries to

smooth functioning of the groups, their choice of projects, the kind of

assets they acquire etc. Thus the banks are important members of the

committees that do the grading of the SHGs from time to time.

Policy makers have repeatedly emphasized the view that no project or

activity under the scheme should languish because of under-financing.

Rather, if banks feel that a project is viable, they should ensure that

whenever required, additional funds are quickly available.

Training

As mentioned before, the SGSY envisages training members of the

SHGs for upgrading skills required to run and profitably manage their

economic activities. The DRDC is to investigate what facilities are

locally available with government and non-government institutions.

Apart from a basic mandatory orientation programme that informs the

Swarozgaris about SGSY, training is to be for the specific skills needed

for the productive enterprises. A part of the central pool of funds is to be

set aside for the costs of all kinds of training.

Marketing

The SGSY has rightly emphasized the need to use optimally local

resources as well as local marketing opportunities because it notes that

selling in distant markets usually leads to the involvement of outside

agencies on terms that are exploitative to the producers. The

Swarozgaris are of course free to market their products nationally or

internationally but should preferably try and do so through government

or semi-government agencies.

Overall Assessment of the Design

In the following sections, we will be describing the problems

encountered in operating the scheme in W. Bengal. Part of the

difficulties appear to arise because the design of the scheme is

complicated and the guidelines circulated by the Ministry of Rural

Development are not as clear as they should have been. But there are

several aspects of the design itself that need to be noted at the outset.

Although it is the largest single scheme for poverty alleviation in the

country, the scheme is to help only a limited section of the rural poor.

Since it is meant to assist the poor essentially by generating more gainful

work for them, it leaves out of its scope those who are too young, too

old, sick or disabled to work. There are admittedly other schemes for

those poor who cannot take up work, but it is possible that public

resources allotted to those schemes are in no way comparable with those

set aside for SGSY and far from commensurate with their numbers

among the poor.

On the other hand, even in the case of those who are capable of

taking up additional gainful work, the work generated under the SGSY

is essentially for supplementing rather than replacing their earlier

activities. Therefore, it is possible that in many cases, joining the

scheme would increase the workload of the poor beyond tolerable

limits.

The scheme's operation depends on many agencies at many levels

committing time and attention to the work. Not only the district

administration and line agencies, Panchayet members and office bearers

but also local bankers as well as NGOs have to be continuously involved

in the work. However, there seems to be no provision for checking

whether or not such agencies are available and cooperative in all areas.

The sponsors can do little if any of these agencies do not carry out their

responsibility and it is not clear what incentives are being offered to

them for carrying out the work.

The SGSY is essentially a top-down scheme; it embodies a patriarchal

outlook where outsiders vet and approve of the poor who are to join the

SHGs, grade them from time to time and keep them continuously on a

kind of a probation for getting access to the next rung of benefits in the

proposed chain. On the other hand, the beneficiaries have no scope for

appealing against the performance of the agencies and, as we shall see in

the case of W. Bengal, have to accept the decisions of the multiple

authorities watching over them.

The scheme provides a single design, which is to be applied uniformly in

all areas of rural India. It makes little provision for accommodating

regional differences in the nature of poverty, or the backgrounds of the

poor. In many cases poverty is endemic in a region because of poor

terrain and lack of infrastructure and human capital; in such a

case, the SGSY approach of slow and patient building of capacities and

infrastructure is appropriate. In other cases, poverty could be a

temporary phenomenon caused by a sudden calamity like floods where a

quick relief programme is needed. Also, while it seems logical that there

would be a basic identity of caste and religious backgrounds among

people residing in any one area; but the strength of such bonds is not

equally strong in all areas. And it is just as likely that within an area,

there are long-standing and deeply entrenched clashes of economic

interests between people living in close proximity. Building the

programme on a cluster approach is therefore,risky.

Discussion of a case(self help group)

The case is all about an Self Help Group named GOKULAM

CRAFT. The group prepares their handicrafts items like beautiful

colourful lamps to be sold in the market. This SHG is lying in the rural

areas of Azamgarh near my land at atlas ka pokhra. Whenever i used to

visit my land many a times i visit them as those colourful lamps sound

quite exciting to me. I have 2 of them bought directly from them fitted

with the light bulb which looks very cool in the dark.

Information about group

There were 12 women and 3 men involved in the self help group.

Group was formed in around mid of the year 2005

The men were responsible for selling the finished goods made by

themselves to shopkeepers.

The men even sometimes go for direct selling i.e. door to door

selling.

GOKULAM self help group won a prize at the block level.

All the swarozgaris are very much devoted to their work and also

very happy due to common efforts.

They have quite a good earning and were looking forward to

expand their SHG so that they can diversify their range and talks

were on with the block officer regarding funding.

RECOMMENDATION

In our opinion the SGSY in a very good programme to reduce

poverty from root level. Now it is also doing the same but there should

be some flexibility in term of norms and funding so that poor people can

make more efforts to reduce their own problem and also make them

eligible to earn by their own enterprise.

Our general recommendation would be to seriously consider

decentralizing the scheme. Each region should be given the authority to

tailor the use of the funds to its problem of poverty and the poor That

way the authorities can also take into account the organizational

facilities that are locally available.

Secondly, there must be lot more publicity given among the

potential beneficiaries about the scheme and its contents as well as the

authorities in charge and their responsibilities. That way the targeted

population can seek help and question authorities if the latter fail to

deliver. For this extensive use should be made of all forms of media and

particularly of the visual media.

The main suggestions are given below:

Knowledge about the scheme and its various aspects is limited. Hence, there is a need to create awareness about the scheme. This can be done by giving wide publicity to the scheme, its components and procedure to avail the benefit from them through electronic and print media.

In self employment programmes, care should be taken at the time of selection of beneficiaries. Only those beneficiaries who have the potential to start and manage the economic activity should be covered under the scheme.

The Scheme lays heavy emphasis on the formation of Women Self Help Groups. Around fifty percent of the Groups formed in each block are expected to be exclusively for women. But, least importance has been given to the formation and organization of such Groups.There is a lot of scope for involvement of women under SGSY, because many women in the State are involved in handicraft sector. But, unfortunately, not much has been done to promote Women SHGs in the State. Therefore, this issue needs to be addressed immediately. It is suggested that the allocation and release of funds should be curtailed, if the required percentage of Woman SHGs are not formed during a particular year. The officials mentioned that they find it difficult to arrange a minimum

of 8 members in a woman SHG. Therefore, it is suggested that a woman SHGs with minimum of 4 members should also be allowed/recognised.

It was found that lack of co-ordination between Banks and the Implementing Agencies. Due to illiteracy, the borrowers’ were not able to complete the formalities in time, the sponsoring agencies were bunching the applications and submitting these to banks at the fag end of the year. The banks were hesitant to sanction loans to applicants, who are below poverty line (BPL) because, of their inability to repay loans. The banks mostly prefer to sanction loan to individual beneficiaries, particularly those beneficiaries who deal in retail trade rather than SHGs. Hence, it is suggested that the banks should directed to ensure that the people residing in far-flung areas are also covered under the scheme, rather than the practice adopted by them to finance only those SHGs who are residing within 10 kilometers from the location site of the bank.

It was reported by most of the SHGs/beneficiaries that the present ceiling of loan amount was very low and the interest rate charged was very high for BPL category of beneficiaries. Hence, there is need to enhanced the loan amount to Rs. two lakhs and decrease the rate of interest considerably.

The Self Help Groups have restricted their activities only to the extent of acquiring loans and release of revolving funds. Some of the groups had initially started economic activity, but abandoned it later. The concerned authorities should look into it and take remedial measures.

The overall performance of the sample SHGs in terms of administrative capability, financial management and availability of marketing facility was observed to be very poor. Lack of training, faulty planning to form groups and lack of monitoring were some

of the reasons for such state of affairs. Hence, proper training programmes regarding financial and administrative management, maintenance of records and marketing facility should be arranged by the certain reputed agencies, both for Self Help Groups and individual beneficiaries. The National Institute of Technology, Institute of Management and Public Administration and the Universities can be involved in such activities.

Marketing of produce of SHGs and individual beneficiaries is reported to be the major problem. The State Govt has neither played any direct role in the marketing the products of SGSY beneficiaries nor it has facilitated in marketing of the goods produced by the beneficiaries.

The guidelines of the scheme envisage roping in NGOs under SGSY, on the premise that they have a better institutional capacity to carry out the process of social mobilization. But, the government agencies were reluctant to enter into a partnership with NGOs. Hence, it was observed that no NGO has so for been involved, which needs to be addressed as early as possible. Besides NGOs, participation of Universities and Research Centres in monitoring and evaluation of programme should be encouraged.

The DRDA/ programme implementing agency has not identified any institution and for technological transmission to the SHGs or Individuals beneficiaries. Thus, inherent skills of the swarozgaris have not been upgraded. They are not in a position to apply the modern skills and re-designs in their products and activities. Hence, there is a need to involve some national level credible NGO, local Engineering/Polytechnic Colleges and Industrial Training Institutes for upgrading the technical skills of swarozgaris to use modern techniques and thereby increase their productivity and efficiency.

The insurance cover provided to the SHGs should be ensured and insurance charges should be born by the government exclusively, since the BPL category beneficiaries are not able to bear such expenses, independently.

The inter-group networking should be promoted for developing ties to understand mutual group requirements and support each other. Further, inter-group trading, outsourcing and dialogue may be promoted. Further, the co-operatives can be quite helpful in choosing viable non-farm economic activities and can play a pivotal role in marketing the products of SHGs on better remunerative prices than other organizations through its network of marketing cooperatives.

Usage of computers in information management has recently been introduced in the State. Hence, investment in development of computer network and regular training of staff in the usage of IT needs to be given due importance. Further, there is urgent need to connect Panchayat, Block/District/State Level Offices through LAN/WAN to improve flow of information from primary source that will, in turn, improve monitoring as well as corrective mechanism at grass roots level.

There is a need to identify suitable performance indicators so that there is consistency between performance indicators and the scheme objectives. It is also important to strengthen the capacity of the district/block level agency to generate and transmit quality data on identified parameters to help in decision-making. Increasing use of information technology should be made for speedy transmission of data to decision-making authorities and making the system effective. Besides, to strengthen the monitoring system, it is suggested that inspection reports should be enclosed with the proposal for release of grants.

BIBLIOGRAPHY

Data are collected from

www.planningcommission.gov.in

www.rural.nic.in

www.cg.nic.in

www.nird.org.in

Other government websites

Newspapers and magazines.

CONCLUSION

It may be concluded that although the performance of the SGSY

has improved since its inception, albeit gradually, yet a great deal

remains to be done. The SGSY has not been able to take off in the state

as per the stated guidelines and stated objectives. The knowledge about

the scheme and its components was limited. Very small portion of

benefecieries and non beneficieries could tell the different components

of scheme.

Even some of the officials of the rural development department

and financial institution in the state were not fully aware about various

components of the scheme as well as their responsibilities in

implementing the scheme. Lack of commitment of officials, their ability

to mobilise the self help groups and illiteracy among rural women were

some of the reasons for poor performance of the scheme.

Policy- makers in India would like to promote an image of the

country as being both fast developing and humane. The one major

stumbling block in their project is the vast and persistent problem of

poverty, especially rural poverty. After having tried many different

projects for its alleviation, the Union government launched the

Swarnajayanti Gram Swarozgar Yojana; the SGSY was not just to give

some dole or some one-time grants or loans to the poor; it aimed to

nurture their economic activities for as long as three years so as to

ensure that the poor do rise above the poverty line.

INDEX

1. INTRODUCTION

2. REVIEW OF LITERATURE

3. RESEARCH METHODOLOGY

4. OBJECTIVE OF THE STUDY

5. HYPOTHESIS

6. DISCUSSION OF THE PROGRAMME

7. ANALYSIS OF THE PROGRAMME

8. DISCUSSION OF THE CASE

9. RECOMMENDATION

10.CONCLUSION

11. BIBLIOGRAPHY