State Sponsored Microfinance

SGSY: The SGSP model was inspired by the Grameen bank and was designed to focus on cluster based activity by identifying 4-5 activities in key areas in each block to be taken by the selfhelp groups. The target was to cover at least 30 percent of the poor in each block by the end of the five years of the programme.

Fifty per cent of the groups have to be exclusively of the women and for the women and group activities are to be

given preference over individual activities. The identification

of activities was based on participatory process and the gram sabha would authenticate the families below the poverty line. One of the principal reasons was the low level of SGSY group graduation by the banks. As per the C & AG report out of

817,717 groups, only 361,287 groups could be graded as

grade I and 182,894 as grade II.

Grading a group within six months of formation is too early a stage to judge their development.
CONDITIONS OF SUCCESS

It has to be delinked from the BPL list and the provision of subsidy have to be withdrawn. The RBI must review its guidelines and prohibit the sanction of loans to the members of the group who had earlier defaulted under the IRDP schemes.

SHGs under the SGSY have to visit the banks on an average at least fourteen times and in exceptional case in states like Himachal Pradesh to as much as one hundred times to get their loans sanctioned.

Integrated Rural Development Programmes had covered fifty

four million rural poor and that the IRDP was a failure as it
had nearly 60 percent defaults leading a simple arithmetic of about thirty two million defaulting borrowers which translates into 162 million people to be grouped as defaulters. This means that the eligible rural poor to be covered under the Swaranjayanthi Grameen Swarozgar Yojana would be one hundred and ninety five million corresponding to the seventy five percent living in the rural area less the total number of poor per se who had defaulted under the Swarnajayanthi Grameen Swarozgar Yojana amounting to

162 million.

This leaves the number of rural poor to be covered under

the Swaranajayanthi Grameen Swarozgar Yojana to be 33 million or translated as number of families under the BPL as

about six and a half million for inclusion under the

Swarnajayanthi Grameen Swarozgar Yojana. Banks are banks. They go strictly by their policy and guidelines in that even if there is one family member who had defaulted under the earlier poverty alleviation schemes, the group becomes

ineligible.

The failure to grade the SHGs leads to non-release of funds to the NGOs. The non-disbursement of funds to the NGOs results in weakening of the SHGs and the ultimate event of the disintegration of the SHGs. DRDA & Blocks do not train SHGs properly. Capacity building is neglected. Despite the Reserve Bank of India guidelines that non willful defaulters of up to Rs. 5000 under the earlier programmes be given loans under the Swarnajayanthi Grameen Swarozgar Yojana, this has not been done.

It is true that the groups formed under the swarnajayanthi Grameen Swarozgar Yojana lack chesiveness and adequate social mobilization. The gram sevaks and the anganwadi workers do not have adequate training by themselves to take on the mantle of imparting requisite skills to train the self help groups in building up their capacities and capabilities.

The investment per family under the Swarnajayanthi Gameen Swarozgar Yojana was assumed to be Rs. 25000. However, the actual investment per family in the first three years of the programme was only Rs. 19678. the Swaranajayanthi Grameen Swarozgar Yojana aimed at enhanceing the monthly income levels of the poor family to Rs 24000 per annum on the assumption of an investment of Rs. 25000.

It is foolhardy on the part of the government to visualize a return of over one hundred perent in the Swarnajayanthi Gameen Swarozgar Yojana.

These wrong poor have very little commitment to repay the

money and coupled with bureaucratization of the entire process, one is afraid to include that Swarnajayanthi Gameen Swarozgar Yojana will turn out to e a repeat performer of IRDP. The NGOs in the scheme also need to

share a part of the poor performer. Several small time NGOs

after receiving the first instalment of grant of Rs. 2000 per group simply disappear.

THE SWARNA JAYANTHI SHAHARI ROZGAR YOJANA (SJSRY)

The Swarna Jayanthi Shahari Rozgar Yojana has two sub subschemes, the Urban Self Employment Programme (USEP) and the Development of Women and Children in Urban areas

(DWCUA). The Urban Self employment Programme helps

individual urban poor beneficiaries for setting up self employment ventures. Normally, the project cost is limited to Rs.

50000 per individual. But if two or more eligible poor join

together in a partnership, a higher project cost could be allowed provided individual share does not exceed Rs. 50000.

The subsidy is provided at the rate of 15 per cent of the

project cost subject to a ceiling of Rs. 7500 per beneficiary. The Development of Women and Children in Urban Areas programme helps the urban women for setting up a gainful employment through group activity.

The minimum number for a group is fixed as ten. Normally, the project cost should be below Rs.2.50 lacs. The Development of Women and children in Urban Areas provides a subsidy of Rs.

1.25 lacs or 50 per cent of the project cost whichever is less.

The promoters contribution is fixed at 5 per cent of the project cost. The banks normally sanction 95 per cent of the project

cost as the loan amount.

The National Slum Development Programme (NSDP) scheme

is implemented through the CDS in Urban Local Bodies (ULBs)

with the assistance of both the State and the Central governments.

Houses, water and sanitary connection, construction of

latrines etc. are undertaken through the National Slum Development Programme. The Valmiki Ambedkar Awas Yojana (VAMBAY) is a recently formulated centrally sponsored scheme for the benefit of the slum dwellers. The scheme mainly aims at ameliorating the housing problems of the slum dwellers living below the poverty line in different cities and towns. The scheme is

shared on a fifty-fifty basis by the Central government and

the state government and is being implemented through the HUDCO.

LATEST INITIATIVES: The Ministry has developed a scheme called Skills Training for Employment and Promotion amongst the Urban Poor

(STEPUP).
With the goal of Affordable Housing for All, the policy seeks to initiate various measures like public-private participation in land assembly, foreign direct investment, timely formulation and review of Master Plans and Zonal Plans, fiscal incentives for housing sector, strengthening modern technological advances to ensure low cost housing, simplification of various statues, increase in cooperation among Central Government, State

Government and Urban Local Bodies, etc.

The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was launched in December 2005 to cope with the

problem of shortage in housing and infrastructure services in a

mission mode for sixty three select cities under the Basic Services to Urban Poor (BSUP). For remaining cities, a scheme namely Integrated Housing and Slum Development Programme (IHSDP) has also been implemented under JNNURM.

The main objectives of the Revamped SJSRY will be 1. Setting up of micro enterprises relating to Production (micro-industry), Services and Business. 2. Production-related micro enterprises will be structured

around a Micro-Business Centre, which will serve as a

common faculty for machining, designing, processing, quality certification and allied services.

3. Service and Business-related micro enterprises, including

support to Street Vendors will be structured around innovatively designed informal sector markets/mobile vending outlets with attendant common facilities. 4. Activity-specific groups will be organized to facilitate

provision or Micro-fianc.
5. Skills training and capacity building of the poor including entrepreneurship development and community

empowerment will be undertaken.