1. National Rural Livelihoods Mission
(NRLM)
- Key Policy and Programmatic Pointers
Jitesh Panda
Vrutti Livelihoods Resource Centre
10th June 2010

2. In Black Font:
Extracts from Draft Background Material on
National Rural Livelihoods Mission (NRLM)
In Blue Font: Feedback and Suggestions

3. Components SGSY…
Formation of SHGs of rural poor households
Capacity building training for managing the SHGs and skill
training to take up micro-enterprises
Strengthening thrift and credit in SHGs by providing
revolving fund support
Credit linkage with banks/other financial institutions and
back ended subsidy for eligible SHGs/members to take up
micro enterprises

4. Components SGSY…
Provision of support for marketing and infrastructure
creation to strengthen the forward and backward
linkages
Technology inputs for micro Enterprises
In practice SGSY focuses on
Revolving Fund support and provision of
Back end Subsidy support to Bank Financed Groups

5. Main Gaps/Weaknesses in SGSY…
Uneven spread in formation of SHGs
Experience shows that Poorest Households
are not keen on joining SHGs
High Attrition Rate in SHGs – Very Few
reaching micro Enterprise Level
Most of SHG Members are not keen on taking
Group based Enterprises

6. Main Gaps/Weaknesses in SGSY…
Demand Supply Mismatch in Access to Credit
Banks generally do not provide working
capital credit to existing micro Enterprises
Limited Institutional Capacity for Training
and CB
Poor are looking for handholding and
facilitation service

7. Main Gaps/Weaknesses in SGSY…
Lack of SHG Federation
Promotion of SHG Federation is not always a
success
Inadequate Risk Mitigation
Absence of Dedicated Implementation Structure
Lack of Convergence
Lack of proper system to address their grievances
Lack of Transparency and Accountability

8. Main Gaps/Weaknesses in SGSY…
Most mEs are individual/HH based; BUT SGSY
focuses on SHG based
Most people want to strengthen existing mEs; BUT
SGSY mainly focus on new mEs
Absence of provision of
Business Development Services (BDS) to mEs

9. Rationale for restructuring SGSY…
Feedback and recommendations of studies relating to SGSY
Major Developments – Economy experienced a robust
growth and 2 Major Initiatives viz NREGS and National Skill
Development Mission (NSDM)
MORD Strategy to generate Self Employment in credit linked
micro Enterprises
Thrust on Credit linked micro Enterprises;
BUT most micro Enterprises are not linked with credit

10. Central Objective of NRLM…
To reduce poverty among rural BPL
through promotion of diversified and gainful self-
employment and wage employment opportunities
to provide appreciable increase in income on
sustainable basis
Dilution in focus from Wage Employment to both
Wage and Self Employment

11. Outputs of NRLM…
Formation of New BPL SHGs
Individual mEs not focused;
mE associated with poor need support of mEs associated with
Non Poor to strengthen their mEs;
Formation of New BPL SHGs may lead to breaking of
existing Groups;
Most Poor do not want take up Group based Enterprise

12. Outputs of NRLM…
Provision of Revolving Fund Support to SHGs
Provision of Capital Subsidy to SHGs
Provision of Interest Subsidy
Would affect SHG Bank Linkage Program
Would influence functioning of mFIs
Outputs relating BDS and Business Services – Not
Monitored
Provision of Skill Development Training to Rural Youth
Could be taken up under National Skill Development Mission
(NSDM)

13. Outcomes of NRLM…
No of SHGs to be entering at Micro enterprise level
Individual mEs not covered
Sustainability of mEs not covered
No of Rural BPL youth to be provided placement
support
Could be covered under NSDM; Sustainability of
placement not covered

14. Outputs/Outcomes do not relate to..
Being Demand led like NREGA
Individual/HH Enterprises
Existing Enterprises
Business Development Services (BDS)
Excessive emphasis on SHG based Self
Employment

15. Strategies of NRLM….
Universal Mobilization of BPL Households into SHGs
Universal Mobilization may focus on all HHs with focus on
Poor/Disadvantaged NOT relate to BPL HHs
Mobilization could be taken up at HH/Village level – SHG
need not be exclusive method of mobilization
Federations/People’s Institution
Not always successful
Efforts may be made to reach to Individual/HH
Instead Business Environment of mEs may be strengthened
Market for BDS providers, Business Services Providers could
be strengthened

16. Strategies of NRLM….
Multi pronged Approach to Capacity Building and Training
Need to be demand driven;
Thrust need to be on hand holding/Facilitation;
Need clarity on Role of NGOs;
Need to be continuous than one off event;
Multi pronged Approach may need to be aligned with simple
institutional delivery mechanism at mE level

17. Strategies of NRLM….
Pro-Poor Financial Services
Demand led access (including enhancing supply) to Financial
Services is important than subsidy support
Marketing and Infrastructure Support
Focus could be on strengthening market; THAN creating new
infrastructures
Convergence
Need to be facilitated at HH level through BDS; Guidelines
may not help

18. Strategies of NRLM….
Sensitive Support Organizational Structure
Need to include Institutional Delivery Mechanism at
HH/Village level
Support for up scaling Skill Development & Placement and
Innovative Projects
Private Companies could be involved;
New Institutions need to be promoted through provision of
incentives

19. Strategies of NRLM….
Demand Driven Approach
Need to be linked to Entitlement of HH (like NREGA);
Currently it relates to State Action Plan and Demands of
People’s Institutions
Transparent System
Inadequate Strategy relating to Exit, Withdrawal,
Sustainability;
Many a times mEs promoted find it difficult to compete in
changing business environment

20. Program Funds at DRDA relates to…
Subsidy to SHGs
Not Required
Infrastructure and marketing (district level and sub-
district level)
May relate to strengthening market at all levels;
Innovation Projects may be encouraged

21. Program Funds at DRDA relates to…
Corpus for Federations
May be required till Banks/FI come forward to finance Federation;
May include Cooperatives, Producer Companies, other Informal
Groups; Institutions in partnership with private partnership;
Corpus to NGOs involved direct Business Services;
Concurrent grant support to NGOs involved in facilitation of BDS

22. Program Funds at DRDA relates to…
Interest subsidy
Not required
Training and capacity building of all stakeholders
Need long term funds for BDS, Handholding, Facilitation
Support;
Need for dedicated Block level Institutional Delivery
Mechanism reaching to HH/Village level
Engagement of NGO facilitators
Preference may be given to local grass root NGOs;
Involvement of Professional NGOs as Resource Organization

23. Monitoring…
Concurrent Monitoring by Monitoring and Learning
(M&L) specialists at the Mission and State Agency
level
Community Monitoring System instituted by District
level Monitoring & Learning (M&L) Specialist
Self Monitoring by SHGs and their federations

24. Monitoring…
Inadequate focus on Monitoring at Enterprise/
Beneficiary Level
Inadequate focus on Process Monitoring
Possibility of involving independent Monitoring
agency
Need clarity on role Facilitating NGO

25. Evaluation….
Focus on District
Focus may be at Block Level
Base Line Survey (BLS) by State level Agency
Could be done by an Independent Agency with
Common Guideline
Concurrent evaluation by State Team
Could be done by outsourced M & Agency

26. Evaluation…
Mid-Mission Evaluation study by an
independent agency
End of Impact Evaluation Study at the
National and State levels through independent
agencies
Year End Impact Study at Block level could
be conducted through Independent Agency

27. Thank You