The women-led SHGs, supported by the NRLM, are successful, but they need to work with startups
Rural unemployment remains a crucial factor responsible for lower income and skills and bad socio-economic conditions. Data released by the Center for Monitoring Indian Economy (CMIE) in May 2022 showed that rural unemployment has risen to 7.8 percent from 7.12 percent out of the total workforce, while World Bank estimates that the majority of the Indian population about 65.07 percent lives in rural areas.
According to the Food and Agriculture Organization of the United Nations, the Indian agriculture sector in the current scenario provides livelihood to about 70 percent rural population, out of which 82 percent of people belong to the category of small and marginal farmers. Deendayal Antyodaya Yojana - National Rural Livelihood Mission (DAY-NRLM) is a scheme that relies on three supporting structures -- financial inclusion, enhancement of livelihood and social mobilization at the universal level of the rural poor people. A major focus of this scheme is the empowerment of rural poor women by including at least one woman from every rural household in a Self Help Group (SHG). According to the Ministry of Rural Development, DAY-NRLM is operating in 6,769 blocks in 706 districts in 30 states and six Union Territories. This scheme relies on SHGs for the elimination of rural poverty. The SHGs are groups formed by rural people, involving about 10 to 20 members and DAY-NRLM has a provision of institutional credit facilities for establishing micro-enterprises in rural areas for these groups. This scheme has successfully transformed about 8.01 crore female members belonging to the vulnerable and poor section of the society into about 73.19 lakhs SHGs.
In India, total SHGs are 6.9 million which consists of about 75 million members as of May 2021. NRLM has made rural people more empowered in terms of healthcare and educational facilities. It also has enhanced income for rural people, making them eligible to buy land for growing food, besides addressing gender discrimination such as child marriage and dowry system. SHGs have also been instrumental in the rising participation of women in political parties, improved financial literacy, knowledge and awareness of administrative facilities and support, more involvement in decision-making of important issues and improved mobility.
According to the World Bank, this scheme has also supported rural women to become a part of the workforce and resulted in larger participation by women members in SHGs under DAY-NRLM, a 20.4 percent rise in various self-employment activities was noticed during 2011-2017. The NRLM has also improved financial literacy among rural women and helped them avail institutional credit facilities. This scheme employs social capital, micro institutional loans and skill enhancement, which resulted in enhanced family income of beneficiaries, while boosting saving habits. It is also noticed that members of SHGs under DAY-NRLM and their family members are giving more preference to various kinds of insurance schemes related to disability, health and life.
The scheme, however, has faced several challenges, as the majority of SHGs are still giving preference to the farm sector and they are engaged in agricultural activities, making them less productive as the primary sector is already facing disguised unemployment. This blocks adoption of various latest technologies to improve efficiency of the enterprise. The majority of SHGs have not become vibrant and are just acting as microfinance units with lesser traits of business enterprises. A huge constraint in the effective implementation of this scheme is unwilling female members and their cooperative family members in rural areas as rural women are not even allowed to go outside their homes for business activities. According to beneficiaries, they have less freedom to involve themselves in any decision-making process at their discretion as everything is mostly pre-decided in the scheme. The DAY-NRLM has received a smaller allocation of funds compared to other employment generation schemes like MGNREGS.
The scheme should focus on both the agricultural and non-agricultural sectors and simultaneously give attention to the enhancement of livelihood through rising income earning opportunities and expanding entrepreneurship skills. The DAY-NRLM may also expand its scope towards the private sector and start-up business entities to empower them for employment generation in rural areas. In the current financial year, more budget has been allocated towards DAY-NRLM which shows a more promising future for beneficiaries.
This scheme has helped the rural people through sustainable development with help of the creation of jobs, skill enhancement and other livelihood enhancement facilities irrespective of gender while providing larger support to female members of the households.
(Ravi Gupta is Assistant Professor and Maheshwari is Research Assistant at the Department of Humanities and Management science, Madan Mohan Malaviya University of Technology, Gorakhpur, UP.)