Role of  Swarnajayanthi Gram Swarozgar Yojana (SGSY) in Poverty Reduction in India

Introduction

Poverty is one of the main problems which have attracted attention of sociologists and economists. It indicates a condition in which a person fails to maintain a living standard adequate for his physical and mental efficiency. It is a situation where people want to escape. It gives rise to a feeling of a discrepancy between what one has and what one should have. The term poverty is a relative concept. It is very difficult to draw a demarcation line between affluence and poverty. According to Adam Smith - Man is rich or poor according to the degree in which he can afford to enjoy the necessaries, the conveniences and the amusements of human life.

Even after more than 50 years of Independence India still has the world's largest number of poor people in a single country. Of its 1 billion inhabitants, an estimated 260.3 million are below the poverty line, of which 193.2 million are in the rural areas and 67.1 million are in urban areas. More than 75% of poor people reside in villages. Poverty level is not uniform across India. The poverty level is below 10% in states like Delhi, Goa, and Punjab etc whereas it is below 50% in Bihar (43) and Orissa (47). It is between 30-40% in Northeastern states of Assam, Tripura, and Mehgalaya and in Southern states of TamilNadu and Uttar Pradesh.

Poverty has many dimensions changing from place to place and across time. There are two inter-related aspects of poverty-Urban and rural poverty. The main causes of urban poverty are predominantly due to impoverishment of rural peasantry that forces them to move out of villages to seek some subsistence living in the towns and cities. In this process, they even lose the open space or habitat they had in villages albeit without food and other basic amenities. When they come to the cities, they get access to some food though other sanitary facilities including clean water supply still elude them. And they have to stay in the habitats that place them under sub-human conditions. While a select few have standards of living comparable to the richest in the world, the majority fails to get two meals a day. The causes of rural poverty are manifold including inadequate and ineffective implementation of anti-poverty programmes. The overdependence on monsoon with non-availability of irrigational facilities often result in crop-failure and low agricultural productivity forcing farmers in the debt-traps. The rural communities tend to spend large percentage of annual earnings on social ceremonies like marriage; feast etc.Our economic development since Independence has been lopsided .There has been increase in unemployment creating poverty like situations for many. Population is growing at an alarming rate. The size of the Indian family is relatively bigger averaging at 4.2.The other causes include dominance of caste system which forces the individual to stick to the traditional and hereditary occupations.

Since the 1970s the Indian government has made poverty reduction a priority in its development planning. Policies have focused on improving the poor standard of living by ensuring food security, promoting self-employment through greater access to assets, increasing wage employment and improving access to basic social services. Launched in 1965, India's Public Distribution System has helped meet people's basic food needs by providing rations at subsidized prices. Although it has affected less than 20% of the Poor's food purchases, the system has been important in sustaining people's consumption of cereals, especially in periods of drought. It has provided women and girls with better access to food and helped overcome the widespread discrimination against female consumption within households. It has also reduced the burden of women, who are responsible for providing food for the household.

The largest credit-based government poverty reduction programme in the world, the Integrated Rural Development Programme provides rural households below the poverty line with credit to purchase income-generating assets. Launched in 1979, the programme has supplied subsidized credit to such groups as small and marginalized farmers, agricultural laborers, rural artisans, the physically handicapped, scheduled castes and scheduled tribes. Within this target population, 40% of the beneficiaries are supposed to be women. Although the programme has reached 51 million families, only 27% of the borrowers have been women. The programme has significantly increased the income of 57% of assisted families.

Some Centrally Sponsored Schemes

Swarnjayanti Gram Swarozgar Yojna (SGSY)

Jawahar Rozgar Yojna(JRY)

Employment Assurance Scheme (EAS)

Sampoorna Grameen Rozgar Yojna (SGRY)

National Food for Work (NFFW)

Indira Awas Yojna(IAY)

National Social Assistance Programme (NSAP),

Drought Prone Area Programme (DPAP)

Desert Prone Programme (DPP)

Integrated Wastelands Development Programme (IWDP)

Targeted Public Distribution System (TPDS)

            There are many Centrally Sponsored Schemes are available for poverty reduction, but the scheme Swarnajayanthi Gram Swarozgar Yojana (SGSY) is considered in this paper because the Central Government merged various previous schemes and formed this one. So it is more meaningful to analyze the effectiveness of this scheme.

Swarnajayanthi Gram Swarozgar Yojana (SGSY)

The magnitude of poverty and disparities that existed between the various social groups necessitated planned state intervention to provide succour and relief particularly to the disadvantaged and marginalized groups such as SC/ST, women etc. Keeping this in view and having regard to the positive aspects as well as deficiencies, the earlier self employment programmes like TRYSEM (Training of Rural Youth for Self Employment), SITRA (Supply of Toolkits in Rural Areas), GKY (Ganga Kalyan Yojna), DWCRA (Development of Women and Children in Rural Areas), IRDP (Integrated Rural Development Programme) and MWS (Million Wells Scheme) were merged and a new self employment programme viz., SGSY was launched w.e.f.1-4-1999.

The SGSY is conceived as a holistic programme of micro enterprises covering all aspects of self employment and establishing effective linkages between the various components viz., organization of the rural poor into Self Help Groups (SHGs), their capacity building, planning of activity clusters, infrastructure build up, technology, credit and marketing etc. The main objective of the programme is to bring the existing poor families above the poverty line. Among the rural poor, special emphasis will be given for the welfare of SCs/STs, women and disabled. The programme lays emphasis on organization of poor into Self Help Groups (SHGs) and their capacity building. The SHGs may consist of 10 to 20 persons. 4 to 5 key activities will be identified in each block based on the resource endowments, occupational skills of the people and availability of markets and these activities will be implemented in clusters. 10% of the SGSY fund will be set apart for training, wherein emphasis will be given for skill development through well designed courses. SGSY is a Credit cum Subsidy programme with the involvement of banking and financial institutions. The expenditure under SGSY is shared by the Centre and the States in the ratio of 75:25. Subsidy will be provided at 30% of the project cost subject to a maximum of Rs. 7,500 and 50% for SC/ST subject to a maximum of Rs. 10,000. For groups, the subsidy is 50% subject to a ceiling of Rs. 1.25 lakhs.

A widespread Approach of SGSY

• Efforts have been made to involve women members in each SHG. 50% of Self-Help Groups in each block should be exclusively for women. Group activities have been given preference and progressively, majority of the funding should be for Self-Help Groups.
• The SGSY adopts a Project approach for each Key Activity. Project Reports have been prepared in respect of each identified key activity. The Banks and other financial institutions are closely associated and involved in preparing these Project Reports, so as to avoid delay in sanctioning of loans and to ensure adequacy of financing. Selection of the activities done with the approval of the Panchayat Samitis at the Block level and District Rural Development Agency/Zilla Parishad at the District level.
• 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.
• Assistance under the SGSY, to individual Swarozgaris or Self Help Groups, is given in the form of subsidy by the government and credit by the banks. Credit is the critical component of the SGSY, subsidy being a minor and enabling element.
• Training programmes are organized for the SHGs after sanctioning loan. Various kinds of training programs such as orientation, skill development, EDPs etc., are organized by DRDA.
• The SGSY provides for promotion of marketing of the goods produced by the Swarozgaris, by organizing exhibitions/ melas at District/State/ National/International levels for exhibition and sale of goods produced by the Swarozgaris, provision of market intelligence, development of markets and consultancy services, as well as institutional arrangements for marketing of the goods including exports.
• The 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).
• A comprehensive system of monitoring has been adopted under the SGSY. The programme is monitored from the Central level down to the grassroot level. At the Central level, the Central Level Co-ordination Committee (CLCC) monitors and reviews the implementation of the Programme and lays down Policy Guidelines for all aspects related credit linkages for the SGSY. the SGSY. At the State level, a State Level Coordination Committee (SLCC) monitors the Programme.

Financial Performance of SGSY since Inception

(Rs. in Crores)

Items

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05

Total Funds Available

1961.97

1608.18

1299.55

1178.13

1214.13

1164.23

Total Funds Utilized

959.86

1117.94

970.32

921.11

1044.25

610.70

% of Utilization of Available Funds

48.92

69.52

74.67

78.18

86.01

52.46

% of Utilization on Subsidy

36.79

52.67

86.16

80.10

148.35

32.22

% of Utilization on Infrastructure Development

14.45

20.51

19.79

18.01

4.83

6.17

% of Utilization on Training

3.03

3.62

6.23

5.44

2.36

2.66

Total Credit Tageted

3205

3205

3201

2525

2129

2507

Total Credit Distributed

1056.46

1459.44

1329.68

1184.30

1301.21

737.89

To SHGs

187.30

256.64

318.34

459.08

707.81

464.91

To Swarozgaris

869.16

1202.80

1011.34

725.22

593.40

272.98

Total Subsidy Distributed

541.69

701.85

665.62

605.89

712.98

429.43

To SHGs

124.58

167.93

209.94

282.54

444.48

280.84

To Swarozgaris

417.11

533.92

455.68

323.35

268.50

148.59

Total Investment

1598.15

2161.29

1995.30

1790.19

2014.19

1167.32

Source: GOI

Physical Performance of SGSY since Inception

(in Lakhs)

Particulars

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05

SHGs Formed since 1/4/99

2.9

5.15

9.5

13.4

17.4

19

No. of SHGs passed Grade I

1.25

2.1

1.76

1.89

2.0

1.2

No. of SHGs passed Grade II

0.74

1.01

0.54

0.96

0.90

0.93

SHGs taken economic  activity

0.29

0.26

0.30

0.34

0.50

0.32

Of the SHGs formed the % of SHGs which took up economic activity

10

5.1

3.2

2.5

2.9

1.7

Source: GOI

Problem with the SGSY Scheme

• Lack of markets and infrastructure - The poor are not able to secure economies of scale because of indivisibilities in marketing costs and low risk bearing capacity. Low price received by poor for their products is also because of interlocked output and capital markets, lack of value addition technologies, poor organizational base and insensitive government policies.
• Issues in group formation - The formation of SHGs is slow, some SHGs distribute the bank loans among themselves as each member bank is individually engaged in a micro enterprise, are dominated by some influential members. Some members running own enterprise register their enterprise as a SHG by showing the labourers as members.
• Issues in banks - Banks are found to release only the subsidy part of the loan and holding back the credit portion.
• Implementation issues of administration – The administration is obsessed with targets-plagued by targetitis, resulting in poor quality group formation without real assessment of the entrepreneurial potential.
• Lack of repeated contacts – There is a misconception that the provision of credit is a one-time event rather than a continuing relationship between lender and borrower.
• Political Interference – The scheme is misused by the political parties for getting the votes of rural poor.

Remedial measures to over come the problems of SGSY

• Special co-operatives may be formed for selling the commodities manufactured by SHGs.
• Efforts should be taken for undergoing training and development programmes compulsorily, it will helpful for the members of SHGs to update their knowledge and skill.

• Efforts should be taken to motivate the banks for speedy process of application and distribution of loans.
• Instruct the bankers to settle the full amount (Credit + Subsidy) of loan.
• Bankers should expand their services to even unserviced areas.
• SHGs and NGOs should be properly monitored and it will curtail misuse of the scheme and funds.  
• Appropriate agencies have to be identified for providing assistance in product design and product development.
• Service of better NGOs having good track record may be ensured for the successful implementation of the scheme.
• Extensive awareness campaign may be launched with the help of Gram Sabha and Block officials in order to impart proper awareness regarding the scheme.
• Rules to be formed for curtailing the interference of political parties that will help the scheme to reach the real rural poor.

Conclusion

Poverty is an extremely complex phenomenon, which manifests itself in a range of overlapping and interwoven economic, political and social deprivations. These include lack of assets, low income levels, hunger, poor health, insecurity, physical and psychological hardship, social exclusion, degradation and discrimination, and political powerlessness and disarticulation. In spite of numerous laudable programmes and huge investments, the reality of rural livelihood is rather dismal. There is a continuous distress migration to the cities and most of the villages lack the basic amenities and services, like a pucca road, transport, communications, drinking water supply, power, sanitation, health center, irrigation facility and jobs for survival and sustenance. The programmes are too many, so are the departments involved in each one of them. There is often overlapping and lack of clarity about the organizations and their accountability. The programmes too often exceed the time and financial allocations. The role of government, non-government agencies, and bankers is a vital factor to promote the SGSY scheme. So the agencies involved in the activities of such schemes should be work with the motive of real economical development of rural poor. The economical development of rural poor leads to the development of nation in all aspects.

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