Crossing The Poverty Line: National Rural Livelihoods Mission And Rural Poor [Part-1]

Posted on December 27, 2012 in Society

By Dr. Amrit Patel

Since independence, the Government has accorded top priority in its policy and planning approach and allocated significant resources to alleviate rural poverty. This paper briefly highlights the achievements of two earlier programs and the objectives of the proposed third one. After several piecemeal efforts, the concept of Integrated Rural Development Program [IRDP] was first proposed in the Union Budget of 1976-77 to provide self-employment opportunities to the rural poor [specifically agricultural and landless labourers, small and marginal farmers, rural artisans] through capital subsidy and bank credit so as to help them acquire productive assets and appropriate skills to cross the poverty line on a sustained basis. In 1978-79 with some modifications the program initially covered 2300 blocks and focused family as a unit rather than individuals. With addition of 300 blocks during 1979-80, it covered 2600 blocks identifying 53 lakh families for assistance as on 31 March 1980.


Integrated Rural Development Program

From October 2, 1980 IRDP was extended to all blocks in the country stipulating targets for SCs/STs and Women beneficiaries and emphasizing primary, secondary and tertiary sectors of rural economy. The District Rural Development Agencies were specifically established to plan and implement IRDP. Between 1980-81 and November1999, about 535.22 lakh beneficiaries [including 44.7% SC/ST & 25.4% women] were provided Rs.11796.01 crore capital subsidy & Rs.21336.63 crore bank credit. Though the program was comprehensive in scope and sought to secure through a process of block level planning, fuller exploitation of the local growth potential to significantly alleviate poverty, in practice the program was merely reduced to subsidy giving program shorn of any planned approach to the development of the rural poor as an inbuilt process in the development of the rural poor, the area and its resources.

Swaranjayanti Gram Swarozgar Yojana

Since 1 April 1999, the “Swarnjayanti Gram Swarozgar Yojana [SGSY]” for the self-employment of the rural poor has been under implementation after restructuring and merging the erstwhile IRDP and its allied programs. The program aims at bringing the assisted BPL families above the Poverty Line through

  • organizing rural poor into Self-Help-Groups
  • establishing micro enterprises in rural areas based on the ability of the poor and potential of each area.
  • provision of credit linked subsidy to help beneficiaries acquire income generating assets
  • training of beneficiaries in group dynamics and skill development for managing micro-enterprises
  • marketing support with focus on market research, upgradation and diversification of products, packaging, creation of marketing facilities
  • provision of infrastructure development fund to provide missing critical links

Between April 1, 1999 and January 31, 2010 SHGs formed were 36,78,746 of which women accounted for 68.32%. Total 1,32,85,688 Swarozgaris were assisted with subsidy of Rs.10091.96 crore and bank credit of Rs.20822.29 crore. Share of women, SCs/STs, Minorities and disabled assisted Swarozgaris was 57.63%, 46.76%,9.47%, 1.48% respectively as against mandated 40%, 50%,15% and 3% respectively. Percentage of fund utilization was of the order of available [73.82], allocation [92.66]. Subsidy [65.88], revolving fund [10.31], infrastructure 16.24], training/skill [149.09] and credit [60.43] demonstrating low utilization.

The SGSY suffered from major deficiencies, such as

  • weaknesses in the planning and implementation process, formation, nurturing and working of SHGs
  • subsidy acted as a tempting factor rather than enabling one to acquire income generating assets through bank credit resulting in unsatisfactory loan repayment as compared to SHG-Bank-Linkage Program
  • estimated income was not generated because of lack of effective coordination and systematic monitoring of SGSY implementation
  • heavy concentration on agriculture and that too milch animals
  • inadequate use of funds earmarked for capacity building and skill development training, infrastructure development and marketing support.

Deficiencies were observed in varying degrees in all States but were more pronounced in States of North-East region, Uttar Pradesh, Uttrakhand, Himachal Pradesh, Rajasthan, Madhya Pradesh, Chhatisgarh, Bihar, Jharkhand, Orissa and West Bengal in particular.,

Implementation of IRDP till November 1999 and SGSY since April 1999 could not alleviate rural poverty as expected, as according to NSS round [2004-05], 41.8% rural population had monthly per capita expenditure of Rs.447, which some economists consider Below Starvation Line instead BPL. Besides, according to Multidimensional Poverty Index [MPI] worked out by UNDP & Oxford University, July 2010, about 645 million people [55%] in India are poor. As against 410 million MPI poor in 26 of the poorest African countries, eight Indian States [Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal] have 421 million MPI poor. The MPI reveals a vivid spectrum of challenges facing the poorest households. MPI considers 10 sharp indicators, namely Education [child enrolment and years of schooling]; Health [child mortality and nutrition] and Standard of living [electricity, drinking water, sanitation, cooking fuel, flooring and assets]. A global report on poverty eradication of the U.N. Secretary-General [2010] shows that economic growth is evident for the progress in China in reducing extreme poverty and raising living standards, whereas India is expected to be home to more than 300 million in poverty out of 900 million predicted to be in extreme poverty in 2015.