Distribution of benefits has improved, but resource efficiency is still far from over
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Village Panchayats are the focal points of development activities. In this regard, an integrated campaign – Sabki Yojana Sabka Vikas – has laid the foundation for strong community participation involving Panchayats and Self Help Groups (SHGs). Poverty has come down significantly due to the focus on delivering benefits of government schemes like Ujjwala Yojana, PM Awas Yojana and Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (NRLM). Groups that are often left out of such programs have been included and the Gram Sabha has been verified to take the services to the disadvantaged groups.
cover story , challenges ahead
The Panchayati Raj Institution (PRI)-SHG partnership has accelerated the pace of poverty reduction and the use of Aadhaar to validate the distribution of benefits has significantly reduced corruption. Moreover, the transfer of Finance Commission directly to the Gram Panchayats has led to the creation of infrastructure in rural areas at a much faster pace.
In 2020, researchers from the International Initiative for Impact Evaluation examined the impact of NRLM in nine of India’s poorest states. They found that an additional 2.5 years of membership in SHGs was associated with a 19 percent increase in total household income. At the same time, only 19 per cent of SHG loans were used for productive purposes such as supplementing livelihoods and only 65 SHGs had taken up some form of entrepreneurial activity. Most of the SHGs are confined to microfinance units rather than becoming business entities. This challenge remains with NRLM. The report indicated that the success of NRLM depends on improving the ability of the members to diversify into highly productive activities. Also, no serious effort is being made to concentrate resources under various programs to reduce administrative overhead.
