Self Help Groups: An effort to eliminate economic disparity

Based on the United Nations recent estimates, India is home for 1.37 billion people equivalent to 17.74 percent of the total world’s population. Interestingly, India is projected to be world’s most populous country by 2024. On one hand, India is home for one-fifth of world population and on other hand, India is home for vast population living in unhygienic conditions, poverty and hunger. India is unable to provide basic needs to its all citizens i.e. food to eat, house to live in, improved nutrition, basic minimum saving, etc. Therefore, the uncontrolled population growth accompanied unemployment is the major challenges that government of India is meted with. Unemployment results in poverty and poverty leads to many evils. Surely, India is one of the fastest growing economies of world but India is unable to create jobs for its huge population especially for its 22 percent of population that live below poverty line.

 All the governments that ruled India since independence tried to curb poverty and joblessness by promoting economic growth models and anti-poverty programs. To some extent they succeeded. But the uncontrolled population growth accompanied by unemployment rendered almost majority of the anti-poverty as well as anti-unemployment scheme useless. In this situation, poverty elimination has been an uncured challenge. Therefore, the conditions of economically disadvantaged groups and unemployed youth are yet pitiable.

In 1999, Government of India (GoI) introduced Swarn Jayanti Gram Swarojgaar Yojana (SGSY) to promote self-employment in rural areas through formation and skilling of Self Help Groups (SHGs). The programme evolved as a national movement in 2011 and became National Rural Livelihoods Mission (NRLM). At state level, SRLMs are working strenuously to form, nurture and strengthen SHGs. NRLM, by design, is more focused, time bound and outcome based programme. The programme was renamed in November 2015 as Deendayal Antyodaya Yojana (DAY – NRLM).

A SHG is a voluntary association of homogenous class (poor) with common goals of social and economic empowerment. SHGs, also known as mutual help, mutual aid or support groups, are the groups of people who provide mutual support for each other. It is a self governed group of self employed men or women from rural areas with weak economic base. The members voluntarily organize themselves into a group for the eradication of poverty of the members. They voluntarily save amount whatever they save conveniently from their low income. Then they mutually agree to a common fund and lend to a member for meeting their productive and emergent needs. A SHG inculcates idea of entrepreneurship, team work, utilization of local resources, to create habit of saving, develop leadership qualities, group activity, etc.

To generate new avenues and utilise potential resources, GoI took initiative of inculcating spirit of entrepreneurship at gross root level in J&K too. Union Ministry for Rural Development awarded UMEED project of J&K Livelihood Mission for making pioneering efforts for institution building and capacity building in state to provide livelihood to economically disadvantaged groups. If someone is interested to start a business, he/she needs capital and resources. A poor can’t afford huge capital. Therefore, the idea of micro-financing through SHG was introduced in J&K. Micro-finance through SHGs is offered that is best form of credit for reaching the unreached and the under reached class. Micro-financing is a provision of financial services that’s available to low income class. If an aspiring entrepreneur desires to generate income, create assets, manage risks and meet household needs, a loan is provided to start up.

As per reports, more than 30,500 women SHGs were operational in J&K at the end of year 2018. Amongst them more than 900 were registered. Normally, the number of members should not exceed 20. If it exceeds, registration becomes compulsory. Generally, a SHG consists of 10-20 persons. It would be better, if all the members of group would come from BPL families. However, if necessary, a maximum of 20% and in exceptional cases a 30% of members would be taken from APL families. Further, APL members should not become office bearers. SHGs go through three stages of evolution: Group formation, Capital formation and Skill development to take up an economic activity to create revenue.

After first stage of group formation, if a group is in existence for six months and has shown the potential of viable group enter the stage, where it receives the revolving fund of Rs 25000 from the bank as cash credit facility. Loans are provided according to individual eligibility, taking into account the requirements of the project. With the central and state Governments, along with the National Bank for Agriculture and Rural Development (NABARD), extending the required support for women SHGs as a strategy for women empowerment.. The movement is eventually expected to reduce gender inequalities in the country and encourage entrepreneurship. 

To make this movement an economic success, GoI in collaboration with state governments and provide every sort of help to the people involved in it. Government realises the potential and therefore set a stage to harness this potential. It lies in the hands of people how they respond and make schemes successful. It is responsibility of members of SHGs to implement project in a meaningful way where whole rural society would harness benefit. Today, SHGs operate in 29 states and 5 UTs, covering whole India after setting a well established stage for disadvantaged groups.