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SGSY: Empowering Rural India Through Self-Employment
1. SWARNAJAYANTI GRAM
SWAROJGAR YOJANA
Presented By IRMA students batch of
2013:
Ankit Sharma (32005)
Arpit Bansal (32009)
Tanu Shree Shekhawat (32044)
Tijil Thomas (32045)
2. INTRODUCTION (1/2)
Programme name: Swarnajayanti Gram Swarojgar Yojana (SGSY)
Launched by: Government of India
Date of launch: April 1, 1999.
Objective:
Broader Goal: Anti poverty programme (APP) and to generate self
employment opportunities (Empowerment)
Programme Specific: Self employment, Asset creation, Income generation
and create access
Strategy: To bring the assisted poor families (Swarozgaris) above the
poverty Line by providing them income-generating assets through a mix of
Bank Credit and Governmental Subsidy. Integrated programme of self
employment through establishment of self help groups or cluster
3. INTRODUCTION (2/2)
There are two key aspects of the SGSY - Activity Clusters
and the Group Approach.
Launched by Restructuring:
IRDP ( Integrated Rural DevelopmentProgramme)
TRYSEM ( Training of Rural Youth for SelfEmployment)
DWCRA ( Development of Women and Children inRural
Areas)
SITRA ( Supply of Improved Tool Kits to RuralArtisans)
GKY ( Ganga Kalyan Yojana )
4. IRDP vs. SGSY (1/3)
S.No. IRDP SGSY
1 „Beneficiaries‟: sense of benefit/grant to be „Swarozgari‟: sense of self
enjoyed – respect and
entrepreneurship
2 financing „poorest of the poor.‟ Financing those who are
enterprising and are on
threshold of crossing the
poverty line.
3 Agricultural laborers, marginal & small All persons below poverty
farmers and rural artisans. line (BPL) are in its
ambience.
4 „Individual approach‟ for extending the credit. Group approach‟ for
extending the credit ( 3:1
ratio)
5 Anyone can avail the credit „Training and capacity
building only after which
credit can be availed
5. IRDP vs. SGSY (2/3)
S.No. IRDP SGSY
6 The selection of activity to be Financing can be done for only four
financed was left to the choice of to
the borrower. five „Key Activities‟ selected by Block
level SGSY committee.
7 No emphasis on project profiles There has to be „project profile‟ for
each activity to be financed.
8 The share of Centre and States The share of Center and States
was in ratio of 50:50. modified to 75:25
9 No incentives to beneficiary for No further finance for less than 80%
prompt repayment of bank credit. recovery and rebate of 0.5% cum
Only single time credit assistance monitoring fee to all those
only. Swarozgaris who repay their dues
promptly.
10 Infrastructure and marketing Great emphasis on the
linkages were overlooked in IRDP. infrastructure development in rural
areas. Special fund by the name of
„Infrastructure Fund‟ has been
created.
6. IRDP vs. SGSY (3/3)
S.No. IRDP SGSY
12 Subsidy pattern according to the Subsidy pattern according to certain
level of occupation and land status. percentage of project cost. Subsidy
Also The ceiling on subsidy was independent of area of
dependent upon area of implementation.
implementation
13 No specific time frame SGSY targets at elevating 30 per
cent
of BPL families in five years.
14 No yardstick for incremental income Yojna stipulates minimum income of
generated under IRDP was defined. Rs.2000 net of repayment for each
Swarozgari.
7. TIME FRAME
The SGSY is a process oriented scheme and SHG
passes through different stages
Time frame at each stage differs from district to
district and state to sate depending upon spacial
distribution and capacity of facilitator.
8. IMPLEMENTING AGENCIES
The Swarnajayanti Gram Swarozgar Yojana (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 Non-
Government Organisations (NGOs)
9. FUNDING
Centrally sponsored scheme and financing shared centre and state in
the ratio 75:25
Of the total assistance:
50% for SC and ST
40% for women
3% for disabled person
For special category states like north eastern states, centre shares 90%
of the fund.
Central allocation will be distributed as per the degree of poverty in the
state.
Devolution of funds to the districts will be indicated by the States and
approved by the Government of India
Government of India will release the funds directly to the DRDAs.
DRDA receives funds directly from the state and conducts
training, infrastructure and economic activities for a maximum of
10% of the fund.
Devolution to the Blocks may be decided by the Governing Body of
the DRDA based on level of poverty and other local factors.
10. FUNDING – RELEASE OF FUNDS
The Centre releases funds in two installments
Release of first installment without condition if
second installment in the previous year was released
without any condition else formal request is required
The second installment of Central funds is released
on the request of the DRDAs
11. ROLE OF PRIs, NGOs etc.
Identification of the poor
Capacity building & training
Infrastructural Support
Linkages of SHGs with Banks
Marketing support
Maintenance of record of SHG
Monitoring and Social auditing
Dissemination of best practices
Engaging youths
12. FLEXIBLE DESIGN
Demand driven strategy
Dedicated support organization for NRLM
Universal Social mobilization of the rural poor
Building institutional platforms for the poor
Training and capacity building
Developing pro-poor financial sector
Access to services and entitlements
Linking with markets
Risk Mitigation
Convergence
Gender empowerment
Monitoring and transparency
13. SALIENT FEATURES
The SGSY aims at establishing a large number of
micro enterprises in the rural areas, building upon
the potential of the rural poor.
The SGSY emphasis on the cluster approach for
establishing the micro-enterprises.
The SGSY adopts a Project approach for each Key
Activity.
The existing infrastructure for the cluster of activities
should be reviewed and gaps identified
Aims to cover maximum number of panchayats
The assisted families may be individuals or groups
(Self-Help Groups)
The Gram Sabha authenticates the list of Below the
Poverty Line families identified in the BPL Census.
14. SALIENT FEATURES
The group approach involves organization of the poor
into Self-Help Groups (SHGs) and their capacity
building.
A credit-cum-subsidy Programme.
Promotes multiple credit rather than a one-time credit
'injection'.
lays emphasis on skill development through well-
designed training courses.
Attempts to ensure up gradation of technology in the
identified activity clusters.
Provides information for promotion of marketing of the
goods produced by the SGSY Swarozgaris.
The SGSY is implemented by the DRDAs through the
Panchayat Samitis.
15. PROCESS OF IMPLEMENTATION
Organizing the rural poor into SHGs
Inclusion of the poorest
Assistance to take up economic activities
Activity clusters
Training and capacity building
Provision of income generation assets
Infrastructure support and technology
Credit and marketing services
16. ORGANIZING AND SELECTING
PEOPLE- FOCUS ON THE
POOREST
Mobilization of Swarozgaris-individuals or groups
Subscribes to BPL list (BPL Census) approved by
Gram Sabha
BDO, Banker, Sarpanch visit to hamlets
PROBLEMS
Inclusion of non-poor
Exclusion of the poor
No foolproof method of selection
17. GRADING OF SHGs
SHGs under SGSY are graded on the basis of
performance
Until the SHG has completed six months of
existence it is categorized as Grade I
At the end of the formation stage, which may be
about six months or more, it is necessary to
subject each Self Help Group to a test to assess
whether it has evolved into a good group and is
ready to go into the next stage of evolution i.e.
Grade II
Grading of the Self Help Groups could be done
by the same agency that is involved in the
promotion and development of SHGs or any
18. FORMATION AND PROMOTION OF
GROUPS WITH ASSISTANCE OF
NGOs
Emphasis on group approach rather than financing
individuals
Help of NGOs, CBOs and individuals in group formation
(better equipped than govt.)
Group formation- time and nurturing from a good
facilitator (10-20 individuals in an SHG; one person part
of only one group)
In the case of minor irrigation schemes and in the case of
disabled persons, this number may be a minimum of five
(5)
Group approach- clarity regarding the roles and design to
the members
Social mobilization enables the poor build their own
organizations {Self-Help-Groups (SHGs)} in which, they
19. PROBLEMS IN FORMATION OF
GROUPS
Selection of NGOs not transparent
NGOs with limited experience in implementation
Problem of coordination between NGOs and
Govt.
Some places of implementation- no NGOs
Formation of SHGs- a time taking process
Directions from state level to Village Level
Workers(VLW) and district and block
administrators to form SHGs
Target-oriented approach not participatory
process
20. FUNCTIONING OF GROUPS
Once formed, groups do internal lending
Trained by DRDA along with banks to develop strengths and
saving
DRDA access the group and grade
Groups open savings account
Accessing credit, subsidy and loan from banks
SHG meetings and regular savings
Maintenance of books of accounts
PROBLEMS:
Internal loaning/lending- “A Fake Exercise”
Groups lacked cohesiveness
Slack in SHG meetings and irregular savings
Fake records
21. ASSISTANCE AND ACTIVITY
CLUSTERS
Block level selection of 8-10 activities
Choice of activity- availability of raw materials, skills and
aptitude of local people, traditional knowledge
Selection of 4-5 activities based on preference
Participants included in decision making
Cluster approach (Consultative and Participatory
process)
PROBLEMS
Non-participatory and Top-down approach
For providing assistance, timely payment to NGOs not
provided
Lack of coordination between Govt., NGOs and Banks
Lack of timely loans from banks to SHGs
22. TRAINING AND SUPPORT
Training provided in the selected activities by
DRDA
Duration of training
Training provided to fellow “Swarozgaris”
Banks to provide “multiple doses of credit” rather
than “one time credit injection”
Support from PRI and Govt. departments
regarding use of funds
Adequate supply of inputs (backward linkage)
Marketing linkage (forward linkage)
23. PROBLEMS IN STARTING
MICROENTERPRISE AND USING
TRAINING
Supply driven not Demand driven
Training provided in activities of non-interest
Lack of quality training
Non-availability of raw materials
Problem in marketing of finished products
Difficulty in procurement of raw materials
24. OTHER PROBLEMS
SHGs created by other NGOs- problems between
the 2 NGOs
Banks do not cooperate with NGOs and Govt.
Outstanding loan recovered from new loan by
banks
29. LEADING STATES
Andhra Pradesh
Uttar Pradesh
Maharashtra
Bihar
Tamil Nadu
30. STRENGTHS
Targeted
towards BPL
population
Imparts
Special focus
permanent
on women
opportunities
Promotion to
Reliance on self
micro
employment
enterprises
31. WEAKNESSES
Attrition Rate
Credit Concerns
Lack of Capacity building and Training
Lack of SHGs at all levels
Selection Bias
Inadequate Risk Mitigation
Grievance Redressal Mechanism
Lack of Transparency and Accountability
32. SUGGESTIONS
Formation of Co-operatives to market SHG products
Proper Monitoring of Activities
Selection of NGOs with better track record for
successful implementation
Proper Training and Development programs for
speedier up gradation of SHGs
Increase in the coverage of banks to remote areas