NRLM Key Policy and Programmatic Pointers 100610
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The document summarizes the key components and strategies of the National Rural Livelihoods Mission (NRLM) in India, which aims to reduce poverty among rural households through self-employment opportunities. It identifies several gaps in the previous Swarnajayanti Gram Swarozgar Yojana (SGSY) program, such as an uneven focus on group-based micro-enterprises rather than individual enterprises or existing businesses. The document provides feedback on improving the NRLM by making it more demand-driven, focusing on individual livelihoods, strengthening business support services, and improving monitoring and evaluation at local levels.
NRLM Key Policy and Programmatic Pointers 100610
- 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