1

The Swarnajayanti Gram

Swarojgar Yojana

A Policy in Working

Nirmala Banerjee and

Joyanti Sen

Sachetana 31, Mahanirvan Road,

Kolkata 700 029

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Foreword

Under this second sub-theme, Sachetana team has explored an area where researchers

seldom venture. Starting from the point where the policy of poverty alleviation was

translated into a budgetary measure called Swarnajayanti Gram Swarojgar Yojana, we

have traced the consecutive steps through which funds are to reach the ultimate

beneficiaries. By examining the hiatus between the guidelines provided by policy makers

and their actual interpretation on ground by executing agencies, we bring out why and

how this major measure has been slow to take off and poor in impact.

The fieldwork for this project was done by Joyanti Sen while the conception and

the final reporting was a joint effort. However, the work would not have been possible

without the ready cooperation generously offered to us by officers executing the scheme

in the State. Beneficiaries under the scheme also provided us with all the information that

we needed. Our grateful thanks go to all of them.

We are grateful to UNIFEM for providing the funds for the work and to our

colleagues in Sachetana for their continuous support.

Nirmala Banerjee

12 August, 2003

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Contents

Items Pages Executive Summary 3-7 Chart I 8 Section I 9-10 Section II 10-16 Section III 16-23 Section IV 23-40 Section V 40-43 Section VI 44-45 Appendix I 46-51 Appendix II 52 Appendix III 53-54 Appendix IV 55 Appendix V 56-57 Appendix VI (A) 58 Appendix VI (B) Map 59 Appendix VII Table(A) 60 Appendix VII Table (B) 61 Appendix VII Table (C) 62

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Executive Summary

Introduction

The Swarnajayanti Gram Swarozgar Yojana (SGSY), a credit-based scheme sponsored

by the Government of India for poverty alleviation, is perhaps the largest of its kind in

the world. It was first announced in 1997 to commemorate fifty years of India's

independence and first allocations for it under the Ministry of Rural development

(MORD) were included in the GOI budget of 1999/2000. The MORD was to fix the

shares of each district in the country roughly on the basis of relative numbers of poor

residing there. 75% of the funds would come from the Union Government and each state

government would match it for the remaining 25%. Both parts of the funds are to go

directly to the District Rural Development Cells (DRDCs); in each district, the DRDC is

in charge of executing the scheme. For this, it is to draw on the help of local

governments, line agencies of superior governments and local branches of commercial

banks. Chart I shows the scheme of organization. Initially, benefits of the scheme were

meant exclusively for those living below the poverty line (BPL families), but recently

some non-BPL family members have also been allowed to avail of some of the benefits.

At least 50 % of the participants were to be women.

The Scheme

SGSY is to promote self-employment among the poor; it aims first to bring

several of those with similar backgrounds into groups (SHGs) where they are to start

building a revolving fund from their own savings as well as some grant and loans from

state funds. Initially, members are to borrow from it for any of their various credit needs.

Once they learn to manage that fund, they are to take up some productive enterprise,

preferably with the group as a whole. In this, they are to be helped by government and

semi-government agencies with detailed study of feasibility of the proposed activities as

well as modern training in appropriate skills. The banks are to play a major role in

ensuring that the groups and their activities are viable; above all, they are to instill

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banking habits among the participants and provide adequate credit to ensure that the

activities undertaken by the beneficiaries are run at an optimal scale.

Objectives of the exercise

In our understanding, gender budgeting exercises are not just a critique of past

performances of the state; they are also meant to help the policy makers to design

schemes for future allocations of budgetary funds that can be more effective in

empowering women. So, in undertaking this exercise regarding the SGSY, our aim was

two-fold: one, to examine how the long chain of steps involved in taking benefits

from the highest level of government to the lowliest, viz, poor women in rural India,

was working out in practice. The other was to assess how far participating in this

programme would actually be empowering for women. In other words, the review is

to highlight the specific aspects of the SGSY design that need to be revised in order to

make the project effective. We examined the scheme as it is operating in the State of W.

Bengal.

Methodology

In order to familiarize ourselves with the procedure for the project as planned by

the MORD, we studied the guidelines laid down by the Ministry. We then discussed with

senior officials of the Department of Panchayets and Rural Development in W. Bengal

how they perceived the scheme's design. From them we obtained introductions to the

DRDCs in three districts of the State where we were to carry out further fieldwork. The

selection of the districts was purposive; the districts had to be near enough to Kolkata to

permit repeated visits. And, we had to have local contacts with persons/organizations

working on the scheme in order both to examine their performance and to get access to

groups of ultimate beneficiaries. This was the way we could expect to form a clear idea

about how work on the SGSY was proceeding. At each stage, our discussions on the

theme were structured round some preset questions but there was sufficient room for

wide-ranging interaction with the people concerned.

Findings

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1. Room for misinterpretations

The guidelines provided by the MORD are highly opaque and use obscure terms

like "back-ended subsidy" without clearly defining them. In this case, we found that

banks in the districts we visited had chosen to interpret that term in ways that

protected themselves from any risks of non-repayment but deprived the

beneficiaries of the full extent of resources allotted for them. Executing officers at the

State level deeply resented this arbitrary stance of the banks but were apparently

unable to question their authority.

Similarly, inclusion of a subsidy in the revolving fund was meant only for

reducing interest charges on loans from the fund; but some DRDCs in the State had

assumed that it was to be distributed as one time gift among members of the SHGs.

There was ample scope for such misinterpretations and there was no regular

mechanism installed through which agencies at different levels could clarify the

position or raise their objections about any aspect.

2. Uneven application

The scheme assumes that everywhere, it is possible to bring the poor together to

form coherent groups. However, at least in this State, the poor belong to many

disparate communities and they do not always live in physical proximity. Also, there

is often a deep mistrust between them and they are unable or unwilling to work in a

cluster. Interference by political parties at the village level makes the matters worse. It is

reported that although designers of the scheme had emphasized the need for the poor to

work in groups, so far, over 85 % of the distributed funds have gone to persons working

on their own.

The scheme is essentially for creating work for the poor; therefore, it leaves out

of its scope those poor who are unable to work because of old age, sickness or

disability.

Also, to form and nurture groups of the poor is a time consuming task for the

organizers, whether they are NGOs or government workers. But on ground, the right

kind of persons or organizers are not available everywhere. The upshot is that, even

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the money released for districts in W. Bengal for earlier schemes like IRDP and

DWACRA did not get utilized in the first two years of SGSY and therefore, no

funds under the new scheme had been released in those years to any district of the

State.

Overcoming poverty

The SGSY was supposed to be a major improvement on earlier credit-based

poverty alleviation scheme in so far as along with credit, it provided for many support

services for the participants. These included, agencies to nurture the groups,

professionally competent assessment of feasibility of their economic activities,

professionally given technical training in the necessary skills, as well as arrangements to

build necessary infrastructure. Banks were directed to ensure an adequate credit flow at

all stages.

All these provisions had been included in the design because the SGSY aimed

to permanently raise the income of all its poor participants above the poverty line.

But at least with the beneficiaries that we were able to interview, we found little

evidence of the beginnings of a process of permanently eradicating poverty.

Reasons for this probably lay with the fact that, none of the supporting

provisos had been realized. There was no evidence from any area of a proper feasibility

study of possible economic activities. Rather, almost everywhere, the poor were carrying

on with their traditional work on a slightly enlarged scale. In some cases, participants had

actually lost because group organizers had encouraged more workers to take up their

activity with the result that wage rates had fallen significantly.

Similarly, the occasional training given was brief and informal. Organizers

thought the idea of formal training at professional institutions was impractical because

participants could not find the time.

Most of all, banks in the state appeared to have been very reluctant to join the

effort. Not only had they avoided giving the beneficiaries due amounts of funds; they had

also been very reluctant to take up any of the multiple tasks that the MORD had

envisaged for them.

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Empowerment of women

Though the scheme was meant only partially for women, in reality, almost all

participants in W. Bengal appeared to be women. However, it did not appear to have

empowered them to the extent envisaged by the designers.

The work and incomes generated through the scheme were mostly of a

supplementary kind and not commensurate with the time and effort required in joining

group activities. Men could not afford to give up their existing activities for that kind of

work. Women were willing to take it up as supplementary work. But this meant that,

the workload of the women had gone up substantially with only marginal

improvement in incomes.

Secondly, we found no instance where gender specific roles of women had been

questioned or altered. Rather, the organizers looked for work and training that

interfered least with women's roles as reproducers.

Except in one district, there had been few efforts to give women the capabilities

of handling their own business or management of funds.

Above all, the participants had very little awareness of what the scheme had

provided and what they were entitled to.

In general, that the scheme was not working well in W. Bengal was no doubt

partly due to failures on the part of the state level organizers. But it must be emphasized

that most of the problems seemed to arise from the elaborate but poorly grounded

structure of the scheme. It promoted a single, uniform procedure for all parts of the

country without taking note of the diversities in the nature of the poor and of poverty or

of the traditions of organizations. Tying up of the programme with the BPL lists added

one more reason why those lists have become politically important in all areas. The

scheme assumed that there would be ready cooperation from all other government and

non-government agencies in the area without providing adequate incentive for them. The

small sums set aside for organizational purposes appeared inadequate to

compensate for the organizational work involved. Banks were assigned a major role;

but no note had been taken of the fact that even with earlier anti-poverty schemes in the

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State, they had, in general provided very little sympathy and support for the needs of the

poor.

We feel that the scheme should be decentralized in a major way; each region

should be allowed to plan and execute the kind of support systems that it considers

appropriate for its poverty related problems. Equally important, there should be a

lot more publicity through the visual media about funds being available with

specific agencies and their responsibilities in the process so that potential

beneficiaries can seek explanations for any failures.

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CHART I

Ministry of Rural Development (MORD),

Govt. of India In charge, SGSY

Panchayet and Rural Development Departments of State govt. (Dept.); overall administrative charge Project Director,

SGSY to manage SGSY in district

Block Development officers

MORD to release 75 % SGSY funds directly to DRDCs

MORD to inform DEPTs re release of funds to DRDCs.

District Rural Development

Cells- DRDC under the Zilla Parishads

On MORD advice, Dept. to release 25 % funds to DRDCs

Stage I Forming self-help groups, SHGs, of persons from BPL families: 50 % beneficiaries to be women.

Expected outcome: incomes of SGSY beneficiaries to rise above poverty line within three years.

Stage III Bank credit for economic activity50% grant on amount upto Rs. 10,000 per SHG or Rs. 1.25 lakhs per group, whichever is less.

Stage II Revolving fund = own savings + grant (Rs.

10,000)+ bank loan (Rs. 15,000). Members can borrow for any need.

NGOs

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Section I Introduction

For the current phase of the Women's Movement in India, the state has been both

an adversary as well as an ally. Many of the Movement's most aggressive campaigns

have been against the state, condemning it for its failures to protect women's rights to life

with dignity and justice. At the same time, it is to the same state that the Movement has

made its appeals from time to time for help in its fight against gender-based deprivations.

Since the self-image of the Indian state is that of a populist democracy, the appeals

usually get a positive response in the form of some additional gesture- perhaps a law for

reinforcing women's rights or a new budgetary scheme for some special service for

women. In this process, the Union Government by now has accumulated a large and

assorted baggage of legal and fiscal measures that are supposed to be pro-women. A

recent study done at the NIPFP1 has shown that in the 2003/04 budget of the Union

Government, funds had been allotted to not less than 32 supposedly women-specific

schemes. In spite of these gestures, women's groups continue to complain that the state is

not doing enough. The main reason of course is the tokenism of those gestures; combined

allocation to all those women-specific schemes in the Union budget in 2003/04 is no

more than 0.84 % of the total public expenditure (ibid p.14, table 3).

Of course, under the Indian constitution, state governments bear the major

responsibility of providing welfare services to their residents; in addition, many of the

welfare schemes funded out of the central budget are routed through the state machinery.

Therefore, it is more likely that women's share in the budgetary resources of state

governments matches their share in the state's population more closely. However, a study

by Sachetana for W. Bengal has shown that, even with very generous assumptions,

women's share in all governmental welfare service projects was no more than 10 % of the

total state revenue expenditure in 2000/012. Among these, many schemes were meant to

1 Lekha Chakravarty (2003): Macroscan of Union Budget 2003 in India: A Glimpse through Gender Lense (draft). National Institute of Public Finance and Policy, New Delhi. 2 Nirmala Banerjee and Poulami Roy (2003): Gender in Public Policies: the case of W. Bengal. Sachetana, Kolkata.

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assist women solely in their accepted traditional roles of mothers, reproducers and

housewives. A few others were to provide relief to distressed women (such as pensions to

distressed widows); but the state had not inquired into the reasons why it is women,

rather than men, that face such situations; nor had there been any attempt to correct those

basic anomalies. Lately however, the state has come to recognize that women have some

special difficulties that prevent them from sharing in welfare services on par with men.

There are therefore some additional schemes, as for example provision of crèches, which

help to remove those gender-based handicaps of women3.

Section II

Background and objective of the study

This study is a part of our work on gender budgeting; in our understanding,

exercises under this rubric are not to be limited only to an ex post analysis of budgets;

they should also aim to find out and advise policy makers on how best to design and

operate public policies that are to empower women. Even if the state allots substantial

budgetary resources to a scheme, its success in fulfilling its aims ultimately depends on

the various steps involved in its execution and on the understanding and efficiency of the

agents who carry out those steps. Therefore in seeking state's help on behalf of women, it

is necessary that we ourselves understand how existing policy measures work on ground

and what aspects of the design and executing procedures can lead to confusion, delays

and leaks in the process of generating the desired effects.

The present study therefore aims to analyze the nature and working of a public

policy measure that was meant to empower women but appears to have been only

partially or poorly successful in doing so. By unraveling its constituent steps and

examining the working of each of those steps, we aim to demonstrate that, for making a

3 Elsewhere we have discussed in some details this system of classifying the women-prone policies of the state according to the state's objectives in promoting them. See Nirmala Banerjee, What is Gender Budgeting? Sachetana, Kolkata, on behalf of the UNIFEM South Asia Regional Office.

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policy effective, it is important that each step is designed appropriately and executed

through transparent, unambiguous steps.

Poverty Alleviation For doing so we have focused on policies for poverty alleviation to which the

Union government assigns considerable funds; increasingly, many of the schemes are

being designed and executed with the expectation that a large section of participants in it

would be women. Raising women's purchasing power is considered a more effective way

of dealing with poverty related deprivations, because women tend to spend most of their

incomes for household requirements; men on the other hand, tend to retain a much larger

part of their incomes for personal expenses (Agarwal 19944). Also, there is a lot of

evidence from other developing countries, particularly Bangladesh to show that, in credit

based poverty alleviation programmes, women's records of loan repayment are infinitely

better than men's5.

Policy makers tend to promote women's participation in poverty alleviation

projects from two angles. On the one hand, now that the nature of poverty as better

understood, it is

clear that the poor are poor not because they are unemployed but because they work for

long hours in activities of low productivity and poor returns. For raising their incomes,

they have to send additional members into the workforce. Women form the majority of

these additional workers and they usually have to take up activities that yield even lower

returns than those earned by men. Raising the returns from economic activities of all

workers and especially of these additional workers thus appears to be an efficient way of

combating poverty.

From another angle, promoting women's empowerment is now an avowed goal of

state policies in India and for that purpose too, it becomes important to increase the

returns to their work. In both the Ninth and the Tenth five year plans, there is an explicit

commitment to work towards women's empowerment; but the only concrete plan

4 Bina Agarwal (1994): A field of her own; Cambridge University Press, New Delhi 5 J. Murdoch (1998) The Gramin Bank: A financial Reckoning; Draft, Hoover Institution, Stanford University

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schemes for that objective are those that are meant to provide micro-credit to poor

women for use in their gainful activities6.

Poverty alleviation schemes are considered to be specially empowering because,

a) unlike most other schemes, they treat women as earners and not just as reproducers. b)

they provide the same facilities to women as men, and, c) to guard against gender-based

biases , there is a provision reserving a fixed share for women.

To review the progress of these schemes, the Ministry of Rural Development,

which has been responsible for sponsoring them earlier, used to appoint from time to time

independent expert groups. Those reviews had three objectives: one, to check whether or

not the allotted funds had reached those below the poverty line; secondly, whether

women had received their due share, and thirdly how far it had been possible for the

beneficiaries to cross the poverty line.

This study is a review from a somewhat different angle. It recognizes that these

schemes are of a special character where funds that originate at the Central government

level have to reach the most distant and voiceless groups at the grassroots, namely the

poor and specially the women among them. This means that each scheme must be

sufficiently well designed to pass smoothly through multiple stages of decision-making

and execution. This study thus aims to follow those detailed steps and locate the

various points where there is scope for misconstruction as well as delays and lapses

from the professed objectives of the project. Furthermore, because the study is from a

feminist perspective, its particular concern is to check how far the designers as well as

various operators of the scheme are aware of the various possible bottlenecks that can

hinder women's true empowerment.

Box 1

The term empowerment is often used rather loosely and can itself be a cause for

reinforcing gender roles. For this paper, the term has the following connotations

• To enable women to operate in all spheres on par with men.

6 One such scheme promoted exclusively for women is that of "Rashtriya Mahila Kosh" of the Dept. of Women & Child, MORD

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• To provide special assistance to women in their functions of biological

reproduction.

• To challenge the traditional division of labour and gendered allocation of tasks

and to ensure that household tasks are shared equally by men and women.

• To take full account of women's unpaid work in assessing their contribution to the

household and to the economy.

In other words, empowerment has to mean not only more jobs and better

earnings for women but also establishing a trend towards a better position for them

in the society, economy and family.

Selection of the scheme Schemes for poverty alleviation and employment generation with reservations for

women have been in operation for over two decades by now. Activists in the women's

movement have welcomed them for their potential for women's empowerment. However,

available data from official sample surveys has shown that during the 1990s, poverty

levels in most of rural India including especially rural W. Bengal where we were to

conduct our inquiries, had gone down only marginally. Further, the incidence of poverty

was consistently higher among women than among men in India as a whole and also in

W. Bengal. This was true both among children and among adults of 15 years or more

(Banerjee 2000 table 4, Sundaram 2001, tables 10 and 12)7. What is more, the excess in

the percentage of women under poverty line as compared to men had remained more or

less at the same level. Obviously, on-going poverty alleviation schemes had not been

able to correct that situation despite reservations for women.

In view of these findings the Union Government has radically revised its anti-

poverty programme. The Swarnajayanti Gram Swarozgar Yojana (henceforth referred

7 N.Banerjee (2000): Poverty and social development; Paper presented at the workshop on poverty organized by the Centre for Studies in Social Sciences, Kolkata, July. Also K. Sundaram (2001): “Employment poverty in India in the 1990s: Further Results from NSS 55th Round Employment Unemployment Survey 1999/2000” in Economic & Political Weekly, August 11. These two estimates are not strictly comparable over time since there is some difference in the database for 1993/94 and 1999/2000. However, in both those years there was a positive difference between the percentages of female and male populations living in poverty households.

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to as SGSY) came into effect from 1st April 1999. It replaced the following schemes that

had been in operation till then:

1. Integrated Rural Development Programme or IRDP

2. Development of Women and Children in Rural Areas or DWACRA

3. Million Wells scheme or MWS

4. Supply of Improved Toolkits to Rural Artisans or SITRA

5. Ganga Kalyan Yojana or GKY.

6. Training of Rural Youth for Self-Employment or TRYSEM

For this study we have selected the SGSY for the following reasons:

Empowerment of women and working with women's groups for promoting

savings and group enterprises is a very important part of the scheme. It is

stipulated that at least 50% of the self-help groups participating in the

programme has to be of women.

The SGSY with a targeted credit programme of Rs. 3,200 crores8 is supposed

to be the world's largest credit linked poverty alleviation programme.

Because the scheme is still in its formative stage, - at least in W. Bengal- we

felt that if necessary, there is scope for reformulating it in the light of the

findings of an in-depth field study such as ours.

As described in later paragraphs, SGSY is a very elaborate scheme that

requires close cooperation between several agencies; these include the Union

government, state governments and their administrative network from state

head-quarters to block levels, the NGOs or other organizing agents, local

branches of the lead banks etc. This provides an ideal case for a study of the

problem that we have set for ourselves, namely to study the possibility of

bottlenecks or breakdown in communication between diverse agencies and its

impact on the working of a scheme.

The study is thus to answer the following questions:

8 The figure is for the year 2001-2002 as of 26/4/2002. It is from table 22 of the research report on SGSY prepared by the National Institute of Bank Management, Nov 2002.

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1. What are the scheme's professed objectives and procedure? Who were the

agents envisaged to participate in it?

2. How far have these proposals been understood and practiced at different

stages?

3. What if any are the differences between the original proposal and its

practice in the state and why have these arisen?

4. What benefits have accrued to the target population?

5. How do the beneficiaries view the programme?

Methodology of the study

This study relates to the operation of the SGSY in the state of W. Bengal in the

period between 1999 when the scheme was initiated until end of 2002 when the fieldwork

took place. As per the original proposal, the Ministry of Rural Development under the

Union government has sponsored the scheme and the Ministry determines the allocations

for each district in each state according to its estimates of the relative incidence of

poverty in that district. Table I shows the central allocations for each of the W. Bengal

districts.

To start with, we had no information about the operation of the scheme except

that the Panchayet and Rural Development Department of the government of W. Bengal

was in overall charge of its operation in the State. Therefore, the first stage of the study

consisted of interviews with senior officers of the department regarding their

understanding and views about the scheme. At this stage, the inquiry was focused on

details regarding financial allocations and release of funds during the previous two years

as well as their utilization. These interviews were structured around a list of questions

that are reproduced in Appendix II. It also provides a list of the names and designations

of those interviewed at that stage. (Appendix III)

The second stage of the study comprised of visits to district offices that were

responsible for implementation of the scheme. The offices visited were of the Zilla

Parishads, and The District Rural Development Cells. Since it was not possible to visit

all the districts within the time at our disposal, we selected three districts. These were:

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1. Haorah is a district, which is partly in the Kolkata Metropolitan District and

accommodates a mixture of agriculture and small as well as medium industries.

2. Paschim Medinipur, which is a less advanced but highly politicized region.

3. Hoogli is a progressive district with a healthy mixture of agriculture along with

rural and urban industry.

At the beginning of this stage, we had little information about the way the work

was being conducted and the persons responsible for it. Our method was to contact the

officers in charge at the district levels and with authorization from the officer concerned,

contact the various persons involved in the operations. Since we did not know the nature

of those involvements, we decided to conduct open-ended interviews that could bring out

the details of the operations at each level. (Though we did carry a set of questions in

Bengali, mainly on the financial aspect of the SGSY in their District. A copy of these

questions translated in English is annexed as Appendix IV). We realized that to collect

the required information would need repeated visits of the investigators. Therefore the

selected the districts had to be easily approachable from Kolkata. A list of persons

interviewed at this stage is annexed as Appendix V

The third stage consisted of meetings with the beneficiaries in groups as well as

singly. We wanted to observe and discuss the programme with as diverse a set of

beneficiaries as possible; we knew that this would not be possible unless we had a proper

introduction from NGOs or government officials working in the field. Part of the reason

why we selected the above-mentioned districts was that we had the necessary contacts

with field workers of diverse backgrounds. At this stage, information was collected

through group meetings with women in the self-help groups organized for the SGSY.

These were supplemented by informal interviews with randomly selected beneficiaries.

Basic information about the field sites and their location on a map is given in Appendix

VIA & VIB. A detail of the meeting with the beneficiaries at this stage is annexed as

Appendix I.

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Section III

The Scheme Box 2 Short description of the scheme Swarnajayanti Gram Swarojgar Yojana (SGSY) is a self-employment scheme. This scheme was introduced from 1 April, 1999. Six different self-employment and training schemes and sub-schemes were merged to form this scheme.

The principal aim of this scheme is to bring BPL families to APL status within three years. The main difference with the previous IRDP DWCRA scheme is to encourage group loans and group enterprise and ultimately to stop giving individual loans to members of the groups. Funding for the project is shared by the Centre and The States on a 75:25 ratio

Initially groups are formed with 10 or 15 persons belonging to the BPL families. This group is called a Self Help Group (SHG) and the individual members of the group Swarojgaris. There is provision under the scheme to involve local NGOs to help the DRDC in forming such groups.

The funds received by the DRDC are kept in a savings bank accounts The DRDC can open their account with branches of the principal participating banks in the field. The funds deposited in the saving account earn interest at the usual rates till the amount is given as loans to the Swarojgaris.

In the first six months the group members are taught to save money i.e. they have to build up a corpus fund by saving a certain amount every week/month. These savings are kept in a local or field bank.

After six months, the groups is evaluated by a team where the Project Director, a member of the Block Development Office and a representative of the bank are present. If they pass the evaluation test they are given Grade I status. At this stage they are paid Rs. 10,000. - as a revolving fund. Individual members can borrow from this money either for business purposes or for personal consumption. They do not have to pay any interest. They are also given Rs. 15,000. - as loan by the bank, which is called the cash credit or matching corpus fund.

After completion of one year, according to performance and again going through an evaluation process, the group gets Grade II status.

After a group gets Grade II status they get credit cum subsidy facilities. This stage is called bank credit linkage. Subsidy under SGSY is uniform at 30% of the project cost, subject to a maximum of

. Rs. 10,000. - For groups of Swarojgaris (SHGs) the subsidy is 50% of the project cost subject to per capita subsidy of Rs. 10,000.- or Rs. 1.25 lakhs whichever is less.

The SGSY is a credit-cum-subsidy programme. The main purpose behind the

SGSY is to help families below the poverty line to earn a higher income that can sustain

them at a level above the poverty line. The scheme envisages that an assisted family will

come out of poverty within three years of joining the scheme. During this period they will

be closely monitored and helped at each stage, not just with credit, but with sound

20

productive ideas, training and know-how for them, and help to market their products at

economic price. Typically in a block, the scheme expects to assist about 300-600 persons

in a year.

The work is to be done by organizing the rural poor into self-help groups (SHGs)

for undertaking economic activities. The new approach ushered in with the scheme

incorporates the lessons learnt from the workings of several earlier poverty alleviation

schemes and is much more comprehensive. Apart from providing financial support, the

promoters are to ensure that members of the SHGs also receive the necessary training for

conducting the activities and to manage the project and it’s accounting. In addition, the

facilitators of the activities would also ensure that there is adequate infrastructure and

marketing opportunities within reach of the groups. Details of its salient features are as

follows:

The cluster approach

Instead of supporting myriad different activities, the scheme in each block would

concentrate on promoting a cluster of a few activities. This cluster will comprise not

more than ten but preferably four or five key activities for each district. The District level

SGSY committee will arrange to get a detailed project report for each activity and get it

vetted by the concerned bank. This cluster for each region is selected after carefully

considering the viability of each of those activities taking into account locally available

resources, skills, markets and infrastructure.

The Swarozgaris, i.e. the beneficiaries under the scheme, can either be individuals

or groups, but policy makers prefer the group approach because groups can undertake

larger activities that can be run at economic scale. In any case, all Swarozgaris are to be

members of SHGs and begin the group through pooling their savings, making internal

loans to group members out of that pool and monitoring their timely repayment. The

groups are the guarantors of all loans to members, whether as individuals or when

working in a cluster. This is true also of the bank loans that they get for their economic

activities.

21

The agencies involved

The scheme requires active participation of many agencies. The District Rural

Development Cell in each place (DRDC) is to do the coordination. Panchayet Raj

institutions are to help in selecting the potential beneficiaries; they are also to participate

in selection of the activities. Banks are to provide the necessary credit as well as act as

monitors at several stages of the formation and development of the SHGs. Both

government and non-government organizations (NGOs) are to come forward for socially

mobilizing the under-privileged and to help them to organize into SHGs that can work

harmoniously and productively. Local officials as well as local elected representatives are

to participate in SGSY committees at several levels. In addition, other line agencies, like

irrigation department, roads department, electricity boards etc are to be invited to

cooperate with the DRDC and modify their own development plans to ensure that the

infrastructure necessary for the selected activities is available in that area.

Financing

The scheme is sponsored by the Ministry of Rural development of the Union

government; it determines the amount of funds that each district in each state is to receive

every year on the basis of its assessment of the dimensions of poverty there as well as its

capacity to utilize the funds. It undertakes to provide 75 % of those funds into a pool of

resources earmarked for the scheme. State governments are to contribute the remaining

25% on a matching basis to make up the total allocated amount for each district. Central

funds for the scheme are to be released directly to the DRDCs in two installments during

each year, one at the beginning of the financial year and the other after 60 % of the initial

funds are utilized. As soon as central funds are released, the state government has to send

to the DRDCs its 25 %.

The funds from this pool are for all expenses for organizing and facilitating the

formation and running of the SHGs, to supplement its core revolving fund through a

subsidy of Rs. 10,000 per group as well as to provide them with other stipulated

subsidies.

30% of the pooled resources are meant for expenses of the organizing department

22

and of the organizations (GOs as well as NGOs) who act as facilitators of each group. A

part of the pool is to be set aside in a fund for training the beneficiaries in all the skills

required for organizing, operating and managing the activities of the SHGs. SGSY funds

are not meant for infrastructure building for which the DRDCs are to seek help from

other line departments; but they can be used for some small but crucial investments of

that kind.

Box 3 Financing arrangements:

• The group starts collecting and banking the savings of its members with the selected bank branch.

• Once the group is stable, the bank releases for its use as a revolving fund a cash credit flow of Rs. 25,000, of which Rs.10, 000 is a subsidy from the central fund.

• This revolving fund is to be used for any requirements of the group members; the group is to monitor its repayment.

• When the group takes up a productive activity, it gets a further loan-cum-subsidy from the bank for use in its requirements of buying assets as well as for meeting its running costs.

• This amount is to be Rs. 10,000 per member or Rs. 1.25 lakhs for the group as a whole, whichever amount is less.

• 50% of this amount comes as a subsidy. Though the bank also releases that amount, it cannot charge interest on it.

• Interest rates for the loans will be notified by the Reserve Bank of India or by NABARD. • Those authorities will also determine the security norms for the loans.

Banks' involvement

Apart from public funds for the scheme, local branches of public sector banks are

to act as main financiers of the economic activities of the groups. They are to provide

credit both for acquiring fixed assets as well as for their running expenses. The

government subsidy to which groups become entitled on undertaking economic activities

is to be a part of the amount released by the banks. But banks are not allowed to charge

interest on the subsidy amount and can use that amount to set off against its liabilities

23

only if repayments by the SHGs are not according to the agreed schedule.

Apart from providing credit at the required time, banks are in overall charge of

ensuring that the basic objective of the scheme, viz. to remove poverty of households on

sustained basis, is fulfilled. They are therefore concerned with the nature of the activities

chosen and the capabilities of the Swarozgaris to carry them out successfully. Therefore

they are to be closely associated at each stage, from selection of the beneficiaries to

smooth functioning of the groups, their choice of projects, the kind of assets they acquire

etc. Thus the banks are important members of the committees that do the grading of the

SHGs from time to time.

Policy makers have repeatedly emphasized the view that no project or

activity under the scheme should languish because of under-financing. Rather, if

banks feel that a project is viable, they should ensure that whenever required,

additional funds are quickly available.

Grading of SHGs

Although policy makers intend to hasten the programme of poverty alleviation,

the scheme SGSY is designed for very careful nurturing of the SHGs and their economic

activities. For this, each SHG goes through several stages from its formation, to the point

when it undertakes and runs a profitable economic activity that can raise incomes of all

the involved families to levels above the poverty line. The stages are as follows:

1. Group formation: when facilitators identify potentially harmonious groups and

mobilize them to form groups. This is expected to need considerable interaction

between the community of the poor and the facilitators.

2. Group stabilization: when the group starts and develops a saving-cum-internal

loan routine. The loans can be utilized for personal requirements, whether

productive or otherwise.

3. Micro-credit: when the group corpus is supplemented by the revolving fund

through the banks' intervention. At this stage they may start training for their

proposed activity.

4. Development of micro-enterprises: when the groups select an economic activity

24

and starts working on it.

The group is reviewed at the end of each stage and the timeframe set for each stage is

fairly elastic. The group can proceed to the next stage only when experts are satisfied

with its progress. The DRDC is to seek the cooperation of the concerned bank in the

grading and review processes of which the local SGSY committee would work out

details. Release of funds to the groups is also contingent on their successfully completing

each stage.

Training

As mentioned before, the SGSY envisages training members of the SHGs for

upgrading skills required to run and profitably manage their economic activities. The

DRDC is to investigate what facilities are locally available with government and non-

government institutions. Apart from a basic mandatory orientation programme that

informs the Swarozgaris about SGSY, training is to be for the specific skills needed for

the productive enterprises. A part of the central pool of funds is to be set aside for the

costs of all kinds of training.

Marketing

The SGSY has rightly emphasized the need to use optimally local resources as

well as local marketing opportunities because it notes that selling in distant markets

usually leads to the involvement of outside agencies on terms that are exploitative to the

producers. The Swarozgaris are of course free to market their products nationally or

internationally but should preferably try and do so through government or semi-

government agencies.

Overall Assessment of the Design In the following sections, we will be describing the problems encountered in

operating the scheme in W. Bengal. Part of the difficulties appear to arise because the

design of the scheme is complicated and the guidelines circulated by the Ministry of

Rural Development are not as clear as they should have been. But there are several

aspects of the design itself that need to be noted at the outset.

25

Although it is the largest single scheme for poverty alleviation in the country, the

scheme is to help only a limited section of the rural poor. Since it is meant to assist the

poor essentially by generating more gainful work for them, it leaves out of its scope those

who are too young, too old, sick or disabled to work. There are admittedly other schemes

for those poor who cannot take up work, but it is possible that public resources allotted to

those schemes are in no way comparable with those set aside for SGSY and far from

commensurate with their numbers among the poor.

On the other hand, even in the case of those who are capable of taking up

additional gainful work, the work generated under the SGSY is essentially for

supplementing rather than replacing their earlier activities. Therefore, it is possible that in

many cases, joining the scheme would increase the workload of the poor beyond tolerable

limits.

The scheme's operation depends on many agencies at many levels committing

time and attention to the work. Not only the district administration and line agencies,

Panchayet members and office bearers but also local bankers as well as NGOs have to be

continuously involved in the work. However, there seems to be no provision for checking

whether or not such agencies are available and cooperative in all areas. The sponsors can

do little if any of these agencies do not carry out their responsibility and it is not clear

what incentives are being offered to them for carrying out the work.

The SGSY is essentially a top-down scheme; it embodies a patriarchal outlook

where outsiders vet and approve of the poor who are to join the SHGs, grade them from

time to time and keep them continuously on a kind of a probation for getting access to the

next rung of benefits in the proposed chain. On the other hand, the beneficiaries have no

scope for appealing against the performance of the agencies and, as we shall see in the

case of W. Bengal, have to accept the decisions of the multiple authorities watching over

them.

The scheme provides a single design, which is to be applied uniformly in all areas

of rural India. It makes little provision for accommodating regional differences in the

nature of poverty, or the backgrounds of the poor. In many cases poverty is endemic in a

region because of poor terrain and lack of infrastructure and human capital; in such a

26

case, the SGSY approach of slow and patient building of capacities and infrastructure is

appropriate. In other cases, poverty could be a temporary phenomenon caused by a

sudden calamity like floods where a quick relief programme is needed. Also, while it

seems logical that there would be a basic identity of caste and religious backgrounds

among people residing in any one area; but the strength of such bonds is not equally

strong in all areas. And it is just as likely that within an area, there are long-standing and

deeply entrenched clashes of economic interests between people living in close

proximity. Building the programme on a cluster approach is therefore risky.

Similarly, even within one state or district, institutions like committed NGOs,

training centers or ready market connections are unlikely to be evenly spread. Therefore,

per capita investment required to overcome poverty is bound to be different from area to

area. This is true to greater or smaller degree of all the necessary institutional inputs. In

the fieldwork we started with this understanding of the scheme as conceived in the

guidelines. We aim to verify how this was being applied in the operations in W. Bengal.

Section IV

Findings From the fieldwork We started on the study with very little understanding of the operation of the

SGSY scheme. It therefore seemed logical to first approach the Department of

Panchayets and Rural Development of the government of W. Bengal that was in overall

charge of it. It took several visits to the headquarters of the Department in Kolkata to get

to interview concerned officials there; all of them proved to be extremely cooperative and

frankly discussed with us their own understanding of and reservations about the scheme.

At this stage our method was to elicit responses of the officials to a set of questions

prepared beforehand.

They first confirmed that in W. Bengal the procedures about agencies and

disbursement of the funds are the same as outlined in earlier paragraphs. There is now a

27

project director in charge of the SGSY in each district. This officer has the full authority

to select NGOs and other executing agencies, allot funds to SHGs, and generally take

charge of authorizing expenditure.

A fact that was not clear from the Guidelines but came out of these

discussions was that allocations to each district were to be determined freshly each

year in the light of the performance of the scheme there in the previous year. The

official list of those below the poverty line was given for five years and rarely

changed within that interval. But that did not mean that the amount allocated for

the district was fixed for that period. Appendix VII A, B & C brings this out. The

scheme was first launched in W. Bengal in April 2000 for the year April 2000 to march

2001. In that year, the Union government did not release any funds to any district in W.

Bengal, though the State government had released to each district the amount that was to

be its contribution relative to the Centrally announced allocations. This was because all

W. Bengal districts had together an opening balance of over Rs. 100 crores from the

funds that the districts had received in previous years under the schemes that had been

merged into SGSY; these were IRDP, TRYSEM, DWACRA etc. In other words, the

actual funds released to each district depended on the performance so far (as assessed by

the rate of success of the local machinery in utilizing allocated funds) of this and similar

earlier schemes

In the next year, i.e. April 2001 to March 2002, both the Central and the State

governments announced the amounts that were earmarked to each district in the State, but

either till the end of that period released none of these funds. Only the district of Haorah

received funds to the tune of Rs. 78.26 lakhs.

It appears that if the district machinery cannot give a utilization certificate

for the previous balance at the time when the next installment is due, the amount

due to it can and is diverted to other districts in that state or in other states.

Decisions in this matter rest solely with the Union government.

The question automatically came up as to why various districts in W. Bengal had

so much of funds left unutilized. We could get no satisfactory answer to the query from

officials in Kolkata. Nor could they explain what had happened to the funds of the order

28

of Rs. 100 crores which had been allotted to districts in W. Bengal but ultimately not

released. We could not find out whether it would be possible in the future for those

districts to claim it. In their opinion, the following bottlenecks were holding up work in

the State:

• The basis of allocations made to the districts by the Central government was far

from clear. Officials had been informed that the share of each district in the total

amount budgeted for that year would be based on Central assessment of the

relative numbers of persons below poverty line in that district. However, how

much of this budgeted amount was actually released to the district would depend

on its performance in using the funds in the previous year. The State government

had recently proposed to the Ministry of Rural Development that the allocations

should be solely on the number of blocks in the district and no weight should be

given to previous performance.

• Officers at this level felt that the poor record of performance in W. Bengal was

mainly due to the non-cooperative attitude of the banks who refused to fully

release the subsidy part of funds to the beneficiaries even when these were

due and recommended.

• They also mentioned that the State government, which was to release its share

within a fortnight of Central release, often delayed the process by some more

weeks.

The Department nevertheless had been urging the district authorities to improve

their performance. Accordingly, in the two-year period from March 2000 to April

2002, approximately 35,635 SHGs had been formed in the State. Of these 90% were

women's groups.

It was however, rather surprising that in general, at this level of the bureaucracy,

nobody seemed to be overly concerned about the fact that this major programme

for poverty alleviation was progressing very slowly in the State. As shown by Table I

in at least in eight of the 18 districts participating in the scheme, there was an increase in

29

the opening balance between 1st April 2000 and 1st April 2001. In other words, those

eight districts had not improved their performance on this front even with the launching

of the SGSY that replaced the earlier schemes. However, even after two years of the

launching of the new scheme, officials at State headquarters had only the vaguest of

notions about hitches in the working of the old or the new schemes.

This was so in spite of the fact that, for a long time it was obvious that something

was seriously wrong with the working of all the Centrally sponsored anti-poverty

programmes in the State. The large balance left over in all the districts from previous

schemes had clearly signaled that fact. Therefore, one would have expected that State

officials had thoroughly investigated the problems holding up work on the earlier

schemes and checked in detail whether or not those or any other difficulties were there in

the new programme. However, apparently there had not been any detailed state level

inquiry into the performance of the earlier schemes. Nor had the details of the new

scheme been verified or discussed with its Central sponsors to make sure that the same

problems were not reintroduced in the new design.

Finding out what had ailed the centrally sponsored poverty alleviation

programmes in the State should not have been difficult for State headquarters because the

laggards included several of the more developed districts of W. Bengal and these were

adjacent to the Kolkata metropolis. Monitoring their performance should have been easier

for state level authorities; or officers at district levels should have had no difficulty in

bringing them to the notice of the former.

Instead, State officials resented the fact that a Central ministry had given them a

ready blueprint for a scheme that involves a good deal of regular administrative work and

would further have the authority to stop their grants if their performance failed to meet its

requirements. They had therefore asked the Ministry of Rural Development to allot

funds solely according to the number of blocks in a district and not on the basis of

performance or utilization. In other words, rather than try to improve ways of reaching

help to the poor, the problem had been converted into a question of State-Centre

relations.

30

Findings from the second stage At the second stage, we approached officials at the district level who were

actually in charge of operating the scheme. The Joint Secretary in charge of the project in

the Department of Panchayet and Rural Development had very kindly written to officers

in charge of DRDCs in all districts asking them to cooperate with us and to provide us

with all necessary information. This was of great help as it managed to persuade officers

everywhere to meet with us and openly discuss their views and experiences. In this

section, we first discuss the information gathered from each district and then analyze it

together.

It was not possible for us to visit all 18 districts where the SGSY was in

operations: so we purposely selected three of those. The district of Paschim Medinipur

was selected for two reasons: it is one of the least advanced regions of the State with a

large concentration of tribal and very poor population. Its economy rests mainly on

agriculture and forestry. However it still one of the most politicized districts in the State

The second district selected was Hoogli, which on the other hand is one of the

more advanced districts in the State; it has a good mixture of prosperous agriculture along

with traditional industry in rural areas and modern large and medium industries located in

it. It is also near Kolkata and therefore it was easy for us to make multiple visits there

The third district selected was Haorah that is also close to Kolkata. It houses

many small and large industrial units. It also has some well-diversified agriculture. The

social and economic characteristics of the selected districts are given in Appendix VIA

Apart from considering these characteristics of the districts for our selection, we

were also guided by our need to have some contacts with NGOs in the area. This was

essential for us to get access to people who could shed light on their experience of

running the programme and dealing with officials. They would also provide us with

opportunities to meet the beneficiaries for discussions that were to be part of the third

stage of our work. For these interviews, we had a list of questions about the objectives of

the SGSY and its financing practices.

Medinipur

31

Our first visit to Paschim Medinipur was in September 2002, when we had an

appointment to meet the Project Director in charge of the SGSY in the district. The

officer proved to be highly forthcoming and gave us copious information; but preferred

not to answer specific questions; he would rather tell us the "story" of SGSY.

Initiating the work

The district had previously been conducting poverty alleviation work under the

IRDP and DWACRA schemes; in fact it had funds of the order of Rs.12 to 13 crores left

over from those received under the previous programmes. It had taken the agency all of

the previous two years to use up those funds. In the current financial year, the district

office had asked for release of new funds.

The Department of Panchayet and Rural Development appoints the Project

Director for SGSY in each district. In Paschim Medinipur, the Project director had

appointed an assistant project director as well as one or more officials from the state

administrative cadres in charge of the SGSY at each block level.

Method of operation

This district was operating on a somewhat different basis because the Project

Director did not approve of the way he thought NGOs operated. He had therefore

decided to work, not through NGOs, but through employees of government and

semi-government bodies like schools, anganwadis, swasthya kendras etc. Employees

of such agencies as well as in a few cases, Panchayet members, were asked to undertake

the work of organizing and nurturing the SHGs in addition to their normal duties.

Moreover, although the scheme provided for separate payment for administering the

work for the work of organizing the groups, workers in this district got no additional pay

for it. However, the Department knew about this practice and approved strongly of these

efforts.

Process of organization

The Project Director in this district dwelt at some length on the difficulties of

organizing SHGs. Forming the groups needed considerable social mobilization. The

district BPL list included a high proportion of Scheduled Tribe (ST) and Scheduled Caste

32

(SC) families. The organizers had to visit each family individually to explain to them the

new scheme, highlight its superiority over the previous ones and persuade them to come

to join the groups. To do so it was necessary to establish a personal relation with each

family, deal sympathetically with their personal problems-whether of domestic violence

or of money to feed the children- and persuade them about why the group approach was

better for them. The whole process of getting the scheme to start working took over one

year and several visits to each family. The Project Director emphasized the fact that

between communities and places, the problems and attitudes encountered were

different. It was only after establishing a close communication with these various groups,

that the scheme could be started. That partly explained the delay in using funds from the

new scheme. The SGSY design, according to the Director had not allowed enough time

for this part of the work.

Nevertheless, in his opinion, the SGSY scored over earlier schemes because it

started with bringing people together for building a collective saving habit. The SGSY

design allowed the members to use these savings for their consumption needs, or to pay

back expensive loans or even for social obligations like marriage ceremony or dowry.

This gave the groups some stability and helped the members to develop loyalty to the

group.

By the time of our visit, there were more than 20,000 groups all of which had

reached what the project director called "community convergence action'. By this he

meant that in the district already various line agencies of the government were coming

forward to help the various groups in their plans. For example, the Keshpur group had

taken up silk weaving and they had got a reeling machine from another government body,

the Paschimanchal Unnayan Fund. The Sericulture department had given training to the

women for running the machine. All in all, there was growing awareness about the

beneficiaries under the scheme among other departments and other public agencies

operating in the region. The groups by then had stabilized sufficiently for the Project

Director to release to each the initial cash credit facility of Rs. 25,000 for building up its

revolving fund.

Although the original design of SGSY did not perceive it as an exclusively

33

women's scheme, at least in this district, all the groups formed were of women. The

Project Director gave no explanation for this except that he felt that women needed the

help more.

Funding

According to officials in this district, the major problem with the scheme lay with

its pattern of funding. It appeared that the original scheme of distribution of the allocated

funds was as follows:

(1) Revolving fund 10%

(2) Matching corpus fund 10%

(3) Infrastructure 20%

(4) Training 10%

(5) Subsidy 50%

However, the groups could not claim the subsidy till they reached what was called the

second stage, i.e. till the groups had started functioning on a stable basis. On the other

hand, most of the members were so poor that they needed some financial help

immediately if they were to get out of the clutches of the usual usurers in the locality.

Apparently there was some room for renegotiating the programme to

incorporate lessons from below; Project Director here had been able to convince

higher authorities in this matter and they were then in the process of passing an

order that would allow project directors to reallocate 40% of subsidy according to

local requirements.

The Department of Panchayet and Rural Development saw Paschim Medinipur

SGSY as one of the most successful in the State. One reason perhaps was that the officer

had been able to form many groups in some of the poorest areas of the State. As we

noticed on our later field visits in that district, the Project Director had been closely

monitoring the groups and was personally familiar with many of them. However, he ran

the programme in a very patriarchal way without leaving any initiative with the persons

34

organizing the groups. On the other hand, the organizers too were content merely to carry

out his orders since for them there was no incentive to put any extra effort in doing

something that is an addition to their workload without any extra payment. It was not

clear how far this procedure could be replicated in other areas with other

communities of the poor, or with other, less energetic officers at the helm of things.

Further, the original scheme envisaged that, groups participating in the SGSY

would, develop links with banks to get funds for developing their enterprises. Providing

some immediate relief, developing a saving habit or even giving some training were no

doubt parts of the objectives of SGSY. But for its success, it aimed to ensure that the

participants reach a situation where they are permanently out of poverty and have found a

sustainable means of livelihood. To finance such activities, it is essential to develop and

establish regular credit links with local banks. In spite of the project's apparent success in

this district, however, none of SHGs had been able to forge such links with the banks.

This could be because of the recalcitrance of local banks; but it could also be because

none of the groups or their organizers had developed the capacity to negotiate with the

banks. The SGSY scheme had allowed three years for completing this process of raising

and sustaining the incomes of the participants to levels above the poverty line. After the

lapse of two years, none of SHGs here were as yet anywhere near that stage.

Hoogli We had first contacted the Project Director of the Hoogli district with an

introduction from the Department; he then invited us to attend a meeting that he had

organized on 8th November with various NGOs and other agencies engaged in the

project. We also met him on another occasion in January 2003 in order to interview him

personally about the work.

Organization

The Hoogli SGSY has been organized in a way that is dramatically different from

what we had seen in Paschim Medinipur. The Project Director for the District had sought

to involve several NGOs who had been organizing women for DWACRA programmes.

35

The Project Director had initially encouraged some Panchayet Samities, local elected

governments at the village level, to take up the work; but he was not very happy with

their working and had therefore increasingly tended to work through local NGOs. He was

very critical of the way the programme was being run in Paschim Medinipur. He felt that

District Office there was interested only in forming more and more groups but had not

paid sufficient attention to nurturing them to the next stage where they could get bank

credit. The NGOs that were participating in the Hoogli SGSY project also felt that the

Medinipur model was ultimately unworkable because forming more and more groups

without properly nurturing the existing ones was likely to be self-defeating. They also

questioned how much time would employees of government and semi-government

agencies give to this work of organizing. It was after all, a very laborious task.

Compared to the other district, the scale of the Hoogli SGSY programme was still

small. There were so far 1925 SHGs formed in the district; of these 781 groups had

reached a stage where they could get the allocations for the revolving fund. 17 groups had

gone ahead and made links with banks for the next stage of credit cum subsidy for their

productive activities.

Of the total, 1250 were women's groups, some others were mixed and a few were

exclusively of men. In other words, over two thirds of the groups were exclusively of

women.

Funding

The District had started with left over funds of the order of Rs. 7.41 lakhs from

the earlier DWACRA scheme. It had received a further grant of Rs. 69.75 lakhs as the

State Government's contribution for SGSY in 1999-2000. Of this entire amount, they had

till then spent less than 60%; therefore they had not submitted to higher authorities an

audited report for the utilization of the grant.

The project Director claimed that while they had not received any more money

under the scheme, they did receive both from the Ministry and from the department the

annual allotments towards their administrative cost

The DRDC in the District had no idea about how the Ministry arrived at the

36

amounts allocated to each district. The Project Director emphasized that they were not

consulted in the matter and had no information about what happened to the funds if they

were not utilized in time.

There seemed to be some misunderstanding about the funds for infrastructure; the

original scheme had stipulated that these were for meeting some minor gaps in the

required infrastructure facilities; but it was not clear who was to undertake the work, the

DRDC, the NGOs or the SHGs. Under the Hoogli project the funds had been given to the

groups and wasted by the groups on small items like buying buckets brooms etc. No

lasting assets had been generated.

Training

The Hoogli SGSY project had put considerable emphasis on training the

beneficiaries. This had been done through several NGOs, However, though the district

had as many as 104 government approved NGOs, only 24 of them had undertaken this

kind of training even though the Project Director had set aside funds for that and had

asked for sound training schemes. The Project Director was proud to say that theirs was

the only district that had arranged to train women in their own homes, since most found it

difficult to go out to training institutes for several days. In fact he was critical of the

SGSY guideline's suggestions that training should be organized through institutes in the

area. He felt that was not practical since it was difficult to organize to get women to go in

groups for that. It was also perhaps not necessary because adequate training could be

given through local groups, getting the women to go to local clubs etc when necessary.

He seemed to be unaware of the fact that by doing so, the project was

reinforcing the stereotypes of women as homebound housewives. Also, this ruled

out their getting skills at any kind of modern and professional levels.

Forming Groups

Men in general were not interested in joining groups because earnings from such

activities were very meager. Women on the other hand were always interested in

supplementing their incomes and always had use for whatever little additions they

earned. Therefore, more and more groups have only women members.

37

The Director agreed with his colleague in Medinipur about the difficulties in

getting people together to form groups. A lot of groundwork is involved in persuading

them to work as a group. The problem is aggravated by the fact that there are several

political parties claiming the loyalty of the poor and members belonging to different

political parties are unwilling to work in a single group. Women are also resistant to the

idea of pooling savings and revolving funds. They would prefer to deal individually with

the organizing agency

In spite of this, the Director had pushed for a group approach; he believed that an

individual swarozgari would be at a disadvantage because it is difficult to organize

training, infrastructure support or marketing opportunities for a single person. In fact,

though the Guidelines for SGSY do allow each group to take up more than one activity,

the Hoogli Project Director also disapproved of that practice and has tried persuading

each SHG to take up a single activity.

The main problem, according to the Project Director was the requirement to apply

the scheme to families below the poverty line (BPL). The poor, according to him, are too

busy trying to earn a minimal living; they are unwilling to take time off from their

uncertain activities to come to group meetings. In any case, they do not believe that the

government is likely to help them. It is only those who have a regular living who are

prepared to spare the time for group activities. Most of the members come from such

categories and these women have a clear notion about how to use the additional

resources. Another set who join the groups are those who use the opportunities to expand

the family business. For example there are many women whose families have

traditionally carried on family businesses of chikan work The additional credit was put in

the same business to expand its scale. These members who have some regular

employment or a running family business are unlikely to be categorized among the BPL.

One of the more successful groups of Swarozgaris mentioned to us another

problem that appeared to arise from reserving the entire programme for BPL families.

Over the last few years, the group had managed to build up a successful business

producing jams and other preserves. Through that activity, their incomes had now risen to

levels above the poverty line. They were wondering, would this mean that they can no

38

longer claim any assistance under the SGSY?

The Ministry has also realized this problem of reserving the project funds

exclusively for BPL households and the new guidelines have laid down that up to 20% of

the members of a SHG can be from those above the poverty line. In Hoogli, SHGs tend

to include both BPL and APL members; however only 20% can be from the APL

families and they cannot claim the subsidy.

Views of the Intermediaries While visiting Hoogli DRDC, we met organizers of two of the NGOs involved in

the SGSY. They highlighted the difficulties they had encountered in the work. Their

biggest complaint was about the BPL lists. These lists formed the basis for selection of

the participants but they were riddled with political manipulations and it was very

difficult to locate the genuinely needy persons.

Box 4 The BPL List

Defects in the BPL lists are perhaps the main reason why most projects for poverty alleviation so far have proved ineffective. The SGSY is also likely to suffer the same fate. Over time, almost all projects for helping the poor at the grassroots have become tied with the BPL lists. Whether it is giving ration cards for subsidized food, or providing training and credit for self-employment- every facility is reserved for those on the BPL list. As a result, inclusion in this list has become the most important criterion for being eligible for whatever largesse that are made available for distribution at the grassroots. As such, its politicization was only to be expected.

Problem is, whether a household is poor or not is supposedly based on the money value of its monthly per capita consumption expenditure. And it is quite impossible for local workers and busy administrators to ascertain that systematically for each village household. So alternatively, the poor are identified on the basis of an amalgam of several rough criteria such as amount of land owned by a household, whether it’s dwelling is pucca or not, whether members possess a bicycle, a watch, etc. The criteria are sufficiently vague and elastic to leave considerable room for manipulations to bring in all the sympathizers of those in power. It is reported that in many villages nearly 80% of households get to figure on the list. Therefore when it comes to actually selecting the beneficiaries for any scheme, it is easy to focus on one's supporters and give the genuine needy a go-by.

39

Organizer of one of the NGOs felt that the subsidies given under the project creates

problems for women. When men of the households realize that those funds do not have to

be returned, they bring pressure on the women to hand these over. This apparently has led

to increased domestic violence in many cases. However, others argued that the subsidy

was essential for drawing the women into the groups.

Both the organizers were very aware of the difficulties of organizing poor women

who are mostly illiterate, into any kind of cohesive groups. Also, even when they join in

groups, they remain deeply suspicious of each other and strongly resist the idea of group

activities. If that hurdle is overcome, the groups have to face the hostility and indifference

of the banks who are unwilling to release the funds even when the group is ready and has

obtained the necessary clearance. The rate of interest charged also appeared to be too

high to the women. Although it was significantly below what they would have paid to the

village mahajan, they found it hard to find investment opportunities where the returns

would be sufficient to cover those additional charges.

For NGOs organizing groups for SGSY, there were problems on many fronts;

often the Panchayet leaders created difficulties because they did not fully understand the

scheme and felt that they should have direct authority over the money. The DRDC

officials did not release funds promptly and held up their work. Along with the banks,

they too view the NGOs' activities with some suspicion.

Haorah We visited the Haorah DRDC office in November 2002, when we met by

appointment the project Director. The lady gave a lot of time and her answers contained

particularly useful insights into the working of the SGSY in the State because she had

taken the trouble to find out how the scheme was working in other districts.

Funding

The Haorah project was obviously the most successful among those we had

visited since it had used up all the funds left over from the IRDP project and had received

funds from the SGSY. In the year 2001/2002, it had received one installment of Rs. 78.26

40

lakhs from the Centre and Rs. 26.08 lakhs from the State. It was entitled to another

installment from the Centre in that year, but could not get it because it had not used up

60% of the funds from the earlier allotment. That was not surprising since the

allocations for the year 2001/2002 had been released as late as March 2002. In the

next year, that is, in 2002/2003, they had again received Rs. 80.06 lakhs from the Centre

and Rs. 26.08 lakhs from the State. These funds were also released as late as October

2002; even then the Project officials had managed to use up 60% of the allotment and had

sent the utilization report as required. They were hopeful of utilizing the entire amount by

March 2003. In that case they would be entitled to get the third installment of the

2002/2003 grants.

The Project Director explained that in each year, the DRDC separately receives

the grant towards administrative expenses on a 70:30 basis. The Haorah Project Director

too thought that the Ministry should let the DRDCs know the basis of inter-district

allocations.

Organization

In Haorah district, the Project was being executed by NGOs. They were being

paid in several installments Rs.10,000 per group . In addition, the DRDC had helped the

NGOs to organize a basic orientation programme for the SHGs as well as for individual

swarozgaris. For this training the DRDC would mobilize the help of other line

departments like health and agriculture. This way the line departments become aware of

the programme and at the same time, the SHGs come to appreciate the multi-dimensional

nature of the project.

In spite of her efforts she had not been able to attract men to join any SHGs. In

this district men from poor households very often migrated or commuted to work; (there

was very little wage work available for casual labourers). So they were not available to

join local activities for earning supplementary income. In any case, earnings from the

SHG activities were too small to attract men. The few groups of males that had come up

under the scheme were those of betel leaf growers, who lived in the locality and had their

land under betel leaves in the same area.

41

The Project Director was of the opinion that, in other districts like Paschim

Medinipur, the district officials and Bloch Development Officers wanted themselves to

conduct the progarmme because they wanted control over the funds for the power that the

funds give them. This had actually meant that implementation of the project is delayed

because the officers could not give it sufficient time from their busy schedules. In any of

the past years, W. Bengal has not been able to spend more than 26% of the funds due to

it. Kerala, on the other hand, had utilized 126% of the funds. This was possible because,

every year, if any state is unable to use its allotments, then the surplus goes to a special

fund from which funds are re-allotted to those states that have used up their own grants.

In the past, W. Bengal's funds have been diverted to Kerala, Andhra and Bihar.

This is a marked departure from the procedure for earlier schemes when states

could keep the unused balance and carry it forward to the next year.

Funding

The Haorah Project Director was very critical of the funding pattern laid down in

the guidelines. It gave banks unwarranted powers, especially regarding the subsidies that

were built into the project. The guidelines are far from clear about the release of the

subsidies but they do say that, when the groups start interacting with the bank for getting

access to a flow of credit, nothing should stop them from getting the subsidy due to them.

This is not only a gross injustice on the part of the banks but also goes against the

intentions of the policy-makers to provide collateral-free loans to the poor. It defeats

the very purpose of the scheme of ensuring that economic activities of the groups are

not foiled for want of adequate credit.

Box 5 Back-ended subsidy Banks in W. Bengal have chosen to interpret the provision of "back-ended subsidy " in the following way:

When the SHGs become eligible to the credit facility from the banks, the latter do not release the full amount but keep back the subsidy part as a collateral for the credit. This means that whereas the scheme envisages that each group would have access to a total credit of Rs.10,000 per member or Rs. 1.25 lakhs in total (whichever amount is smaller), it actually gets only 50% of that, because the 50% of the total that is supposed to be a subsidy is not released to the group by the banks.

It is worth noting that banks in W. Bengal were doing the same thing with the IRDP funds. This has had been reported repeatedly to the MORD by experts

i i th ki f th IRDP It i diffi lt t d t d h th MORD

42

Building Infrastructure

The Project Director was very aware of the need to provide infrastructure that

may be necessary to make the economic activities of the SHGs viable. However, in

Haorah, very little land is available with the groups to build their own structures, so the

Director had initiated action on some commonly useful activities like roads. However, in

this, she met fierce opposition from various line agencies. In the end, instead of providing

roads for facilitating marketing, she had provide mobile vans to SHGs to market their

products from door to door.

Views of the Beneficiaries Our ultimate aim was to find out how far beneficiaries had understood the

scheme, whether it met their needs and how far participation in it had helped them to deal

with their perennial deprivations. In order to examine these aspects we had requested the

DRDC offices in the three districts to provide us with contacts with some of the groups

that had started working in their areas. The Project Directors everywhere readily agreed

to that and arranged to introduce us to a few. In Paschim Medinipur, the Project Director

himself offered to take us to meet some groups in one of the remoter areas of the district.

In Hoogli, we were introduced to organizers of a few NGOs who took us to meet the

groups organized by them. In Haorah, the Project Director requested a woman member of

43

the local Panchayet to accompany us. In all we met over 200 participants from fifteen

groups. Of these, only one group was of males. Because of the presence of the organizers

themselves, women of the groups found it difficult to be fully frank with us. It was only

in Haorah that we could freely interact with them. Nevertheless, complaints of the

women did come out in response to some leading questions from us.

Funding

So far, only three groups, all from Haorah, had reached the stage when they were

able to establish links with the banks and get the cash credit facility. These groups had

been formed as far back as 1996 under the DWACRA project. All the other groups had

only recently reached the stage where they could claim the state help for starting a

revolving fund.

We found that very few of the participants knew exactly what the financial

provision was under the scheme and accepted whatever was given to them. If the details

had ever been explained to them, they had obviously not absorbed them. Even with the

little they did get, very few had any idea about what to do with it.

Activities

Almost all the members are involved in small activities, which are mostly home-

based. They are mostly continuation of what they had been doing in the past before

joining the group. The additional resources had helped them to expand their scale to some

extent. But in spite of the talk about SGSY's training component, we saw no

indication of new skills being introduced or old skills being upgraded. The only

exception was a single group in Haorah about which some details are given later. As with

the previous micro-credit projects9; none of the project organizers could provide the

participants with any new ideas for viable new economic activities.

Moreover, though the SGSY had aimed at getting the poor to join in groups for

building viable activities, almost all the small enterprises we heard of were being run by

members in their individual capacities. As Appendix VII (Table B) shows, most of the

9 Nirmala Banerjee and Mukul Mukherjee (1999): Some thoughts on Micro-credit for empowerment; Sachetana, Kolkata

44

resources released in the first two years had gone to individual Swarozgaris instead of

groups in the ratio 10:1.

We found individuals cultivating mushrooms, running a small poultry, tailoring,

knitting, making muri (puffed rice) or bari ( lentil cakes) or some bamboo work. Joining

the project had not altered their techniques but in some cases they had got some facilities

for marketing as in the case of mushroom growers in Haorah. But it had not been possible

for the organizers to persuade the women to come together to cultivate mushrooms or

raise chickens on a larger scale through a group activity. This is in spite of the fact that,

there are well-known economies of scale in doing these activities on a larger scale.

In one instance, joining a SGSY group had actually harmed the economic

interests of some participants. In Medinipur, several women had been doing zari work on

piece rates for a middleman. When the group was formed, the organizer, for want of any

ideas about alternatives, had persuaded all the women to carry out their work in a

common shed. In that way a lot more women got to imitate the skills of the initiating few

and look for the same work. This meant that the local labour supply for that work

increased and it made it easy for the middleman to beat down the piece rate for all

workers.

One of the group activities that seemed to work well was of a group in Haorah

which had started a unit to make preserves-jams, jellies, pickles etc- and sell them

through a marketing unit set up under the project. Another group, that of men, had started

a provision store and had acquired a van to give home deliveries. Each of the men was

already engaged in another activity and they all took turns to work at the store.

Communications with the authorities

Most participants are rural women with little or no education or exposure to the

world outside. However, before they join the group, they and their households had

obviously used all their ingenuity, knowledge and skills for the living they so far had.

They had joined SGSY groups obviously in the hope that they would get some additional

equipment to improve their livelihoods. The Project was to give them not only some extra

45

credit, but a holistic package of new ideas, market information, new skills, physical

equipment, and infrastructure for running new enterprises. Obviously this had not

happened; but the members were neither aware of what they should have got, nor were

they in a position to confront the authorities. The latter, on the other hand, in most cases,

carried forward the top-down approach built into the project design and had made the

beneficiaries feel obliged for the benefits they had received, however partial they were.

Section V

Conclusion

Policy- makers in India would like to promote an image of the country as being

both fast developing and humane. The one major stumbling block in their project is the

vast and persistent problem of poverty, especially rural poverty. After having tried many

different projects for its alleviation, the Union government launched the Swarnajayanti

Gram Swarozgar Yojana; the SGSY was not just to give some dole or some one-time

grants or loans to the poor; it aimed to nurture their economic activities for as long as

three years so as to ensure that the poor do rise above the poverty line.

While the aim was admirable, the way devised for doing so has left a lot to be

desired. If one examines the design of the scheme in details, several aspects come up.

These are briefly summed up below:

Funding

As we saw before, few people even at the state headquarters or at the district level

have really understood the funding pattern. For example, at least in some places, the

subsidy part of the money given for the revolving fund is being treated as a non-

refundable one-time gift to the participants. However, the guidelines have mentioned that

the subsidy is to the group as a whole, the individuals who borrow from the revolving

fund, must return the entire borrowed amount to the group. They are merely

exempt from paying interest on the part represented by the subsidy. However, in the

46

districts we visited we came across instances when the beneficiaries were not required to

return even the full principle.

Similarly, as we have mentioned in box no. 4, the banks have been

interpreting the provision for "back-ended subsidy" in ways that make their

operations completely risk-free. The other agencies have not understood this fully.

Even if they had, they would have no authority to challenge the banks. The funding

pattern is not just not transparent; it simultaneously involves several agencies without any

chain of authority between them. Thus apart from possible delays in the funds passing

from the MORD and State governments to the DRDCs, the banks can, in addition, hold

up the project at any stage. The guidelines say that banks have to be involved at all stages

starting from choosing the beneficiaries. Who has the authority to question the banks

if their decisions obstruct the progress of work?

The guidelines had strongly suggested that no enterprise begun with SGSY was to

be constrained in reaching its optimal scale for lack of funds. We have seen before how

banks in W. Bengal have completely neglected this responsibility.

Recently, the Institute of Bank Management had undertaken a field survey of

banks participating in the SGSY10. The report brings out the very poor record of

achievement of the programme, and gives several reasons fro that. But surprisingly, it

makes no mention of the fact that the scheme of financing is hard to understand or

that banks are taking decisions, which are not warranted by the original design of

the project. Nor does the report anywhere question why banks have been so wary of

promoting the SGSY even though there are provisions for groups standing as

guarantors for any loans that might be made.

In other countries, particularly in Bangladesh, this provision has had a

marvelous impact on ensuring repayment of loans especially from women members.

Even the Indian micro-credit projects have followed the same approach with good

results. So the Report should have looked into the reasons why, for this programme,

the banks are allowed to be so cautious.

10 K. Dinkar Rao (2002): Swarnajayanti Gram Swarozgar Yojana: A Research Report: National Institute of Bank Management, Mumbai. The survey was confined only to bank participating in the programme. No attempt was made to contact other agencies.

47

Training

The designers of the programme had realized that persons are poor not because

they do not work, but because they work on low productivity work. So, to reduce

poverty, people had to be given:

a. Thorough analysis of market opportunities to find out what production is to be

encouraged in each area.

b. The skills required for activities to generate those products; these are to be

modern professionally imparted skills.

c. Technical expertise to acquire the required tools.

Again, as we have shown, these requirements have been completely ignored. Instead,

women 's traditional roles and traditional ideas about sexual division of labour are being

reinforced.

Workload

Another purpose behind the idea of revamping poor people's activities was to

reduce the enormous workload that poor women especially carry in their multiple roles as

reproducers and producers. It was hoped that the new activities would be sufficiently

productive for them to earn better incomes with less physical labour. Instead, in our

interviews with the beneficiaries, it was repeatedly pointed out by the women how

joining the SHGs had increased their workload. This was mainly because joining the

SHGs had provided them with some supplementary work, but the new activities could

not generate enough income for them to give up any of their earlier tasks.

The cluster approach

The SGSY started with the firm idea that by and large, the SHGs would be

brought to work as groups on activities where all members of the group would participate

as partners. This has obviously not worked in this State. The approach apparently had

been imported from Andhra Pradesh, where NGO had been running SHGs of BPL people

48

with success. However, a scheme that has to work at the grassroots level has to take into

account that people everywhere have their histories and traditions. If the aim is to involve

mainly the poor then the characteristics of poverty in each region must be allowed for. In

the villages of W. Bengal, which are usually large, the poor are scattered and often

belong to different communities. It is difficult, both physically and psychologically to

bring them together regularly for work. In addition the NGOs in Andhra had probably

worked a long time with many groups and had managed to bring about a degree of trust

among them. The few DWACRA groups in Haorah had also reached that stage. But

convincing the poor to trust other, equally needy people, to look after their interests is a

time consuming process, and there were few NGOs available to do the work.

A top-down approach

Perhaps the worst aspect of the programme is that at no point have the

beneficiaries been consulted about why they had remained poor even with the numerous

poverty alleviation schemes of earlier years. Nor have they been asked this time what

they might have wanted or needed at this point to make their lives a bit better. Policy

makers need to appreciate the fact that, the poor do intensely use the limited

knowledge and experience at their command. If their lives are to be changed

significantly, then outside agencies have to bring in substantial inputs of a kind that

they want but cannot get. For this it is important to find out what they do know and

have. It is only then that schemes can be devised that can give right inputs in right

quantities. Merely offering them some financial resources under very wary and

mistrustful supervision does not help to build either their confidence or their economies.

49

Section VI

Recommendations

Our general recommendation would be to seriously consider decentralizing the

scheme. Each region should be given the authority to tailor the use of the funds to its

problem of poverty and the poor That way the authorities can also take into account the

organizational facilities that are locally available.

Secondly, there must be lot more publicity given among the potential

beneficiaries about the scheme and its contents as well as the authorities in charge and

their responsibilities. That way the targeted population can seek help and question

authorities if the latter fail to deliver. For this extensive use should be made of all forms

of media and particularly of the visual media.

Some specific recommendations are as follows:

The guide lines must be made more transparent;

Complicated procedures and obscure terms like ‘back-ended subsidies’

should be clearly explained;

The line of authority must be clear to the organizers as well as the

beneficiaries;

To take account of local difference many of the details of the

procedure should be left to local discretions or discretions local

organizers. They should consult the beneficiaries in such matters;

It is crucially important that the activities that the beneficiaries are

encouraged to undertake are more productive and remunerative than

what they have traditionally being doing;

The economic activities must be selected after careful feasibility report

based on market studies and local resources;

The training for the work must not be on an ad hoc and informal basis

50

but by professional people knowledgeable about modern technology;

The aim should be that people’s quality of life after joining the SHGs

significantly improve and they are not overburdened with poorly

remunerated extra work;

For empowerment of women it is essential that the attitudes and

perceptions of organizers be radically changed. Women must be seen

not just as reproducers and home makers and supplementary earners

but as productive members of the economy and society;

It is most important that the participating banks take up the task as one

of nation building and give generously of their time, technical know-

how and resources. They cannot focus only on avoiding risks.

51

Appendix I

Stage III

At the third stage of our research, we have visited about 200 women members of the self-

help groups in all the three selected districts.

On 14 November, we visited visit six groups in Paschim Medinipur. These groups

where in different villages of Dashpur I Block. The Project Director accompanied us. The

villages were:

Village Basantapur. We met a women SHG group (Nivedita) consisting of ten members. This group was a new group formed about four months ago. They had received a total amount of Rs. 15,000.- revolving/corpus fund. With this money they had bought two sewing machines. They had rented a tiny room for these machines. Their main business was stitching blouses and petticoats. While two women did the actual tailoring the other members did the finishing work. At the time of our visit they earned about Rs. 3 per head per day by working only for about two hours i.e. Rs. 900.- per month each. To increase their income they would have to have more training and more machines and a larger space. Most of them made news paper bags, which they could do at home. They complained that their workload had increased after joining the group. Asked whether their husbands objected to their forming groups they said that as along the house hold chores were not neglected their husband did not object.

Village Nandanpur; (Matagini Sashayak Prakalpa) This group consisted of ten

members. With the revolving fund they had started a Muri (puffed rice) frying enterprise. After they received the cash credit of Rs. 15,000. - in February 2001, they decided to set up a small scale poultry business. They were able to get on rent a large room from one of the villagers who had left home to do work outside. Till date they had made a profit of Rs, 1,900.-Their problem was marketing. They had to take help of the men of the village to take the birds to the market. If they could get a van they would be able to handle the marketing better. They were ignorant about the funding pattern. Since the Panchayet are directly involved in the group formation, they thought that the funds were provided by the Zila Parishad

Village Tilanda (Tilanda Vidyasagar Self Help Group) This group also consisted of

ten members. It was started with the money from the previous DWCRA scheme. They had a small shed given to them by the Gram Panchayet and had bought five knitting machines. A master trainer belonging to a NGO had trained them. They earned fairly well from making woolen garments. There is a ready market in this area for these garments. Out of the ten members six worked on the knitting machines. We

52

were able to talk to four of these six. Two of them were agricultural labourers. They worked on the machines during their spare time. The other two to possesed small family land and had to work on them. The four women who did not work on the knitting machines made decorative ‘Bari(lintel cake)’. They showed us some of the samples of the intricately designed Baris The six who made woolen garments came to the shed, which houses the machines, individually at their own convenience, but they shared the profit. They had received Rs. 10,000.- from the rolling funds of SGSY. Most of the profit went to buy raw materials, repaying loans to the bank and the monthly savings. The profit was not enough to make any real difference to their life-style. Whatever they could take home was used for emergencies like medical cost or for education of children. The woolen garments makers made a profit of about Rs. 300.- per month and the Bari makers about Rs.150.- per month. Only one group member, who has two daughters, had invested in gold ornaments.

Mother Tilanda was another group who shared the same premise as the one mentioned above. They had also received Rs. 10,000.- revolving fund. But since their work was mainly home based they did not possess any room or shed of their own. Since the group was in the same village they used the shed of Vidyasagar SHG to hold their meetings, etc. This group’s main work was to produce rice from paddy, frying Muri, making paper bags and small-scale poultry from home. The women themselves went to the market (Hat) to sell their products. In this group neither the work nor the profit was shared. The maximum profit came from paddy to rice work, which was about Rs. 150/200 per month.

Village Sayed Karim (Pritilata SHG) This group was a mixed Muslim and Hindu

group. They had ten members. They did put out job of Zari work. The middlemen gave them the samples and the material they had to stitch Zari and beads on them. When we visited the group about six women and children were working on a make shift loom. Two young girls aged about 12/13 years were part of the team. There was no electric light. They had to do this intricate and delicate needlework with the help of kerosene lamps. They had received Rs.10,000.- rolling fund which they had distributed amongst themselves. The had also received Rs. 15,000.- which they had not used till then. In fact many of them were quite confused about how the money should be spent. Actually this work is a traditional trade of this village. Many families do the work at home. Young girls too have to leave school to help. The rate of payment is Rs. 5.- per hour. Some of the older and more experienced women can work up to 8 hours a day with a daily earning Rs. 40.- The younger girls cannot do more 2 to 3 hours. The condition of work was very bad. Not only was it bad for the eyes the suffocating atmosphere was bad for general health of the women.

Village Jaykrishnapur (Jaykrishnapur Nibedita SHG) This group consisted of eight

members. It was a family group. We interviewed them at their home. Their trade was to make bamboo baskets of various shapes and sizes. It is their family trade for generations. In fact, all the family members including young children participate in the work. From one large bamboo the family earned approximately Rs. 600.- Their living condition was very poor. Till date they had got the revolving fund of Rs. 10,000.-

53

On 20 January 2003 we visited Nischinda Gram Panchayat in Haorah District and met a few women members belonging to one group. We had long discussions with a Panchayet member who looked after twelve SGSY groups in that area. History of the twelve groups Ten of these groups are actually DWCRA groups. They were formed in 1996 under the DCWRA scheme. In August 1996, the then Sabhapati, who belonged to the CPM, had brought together about one hundred women belonging to the BPL families in her area to initiate them to form DWCRA groups. Another member of the Panchayet and a member from the DRDA were also present at the meeting. Sixty women responded and between August and December 1996 the first four groups were formed. Since then, over the years another six groups were formed under the DWCRA scheme. In 2001 two groups were formed directly under the SGSY scheme. All the twelve groups were now brought under the SGSY scheme.

Though the groups were run directly by the Panchayet Samity, they took the help of a NGO called Abhoy Nagar Pallysree Sangha in the administration work.

The first four groups, each having fifteen members ((Mirbai Mitali, Rakhi & Sathi), were initially trained in mushroom cultivation. They were given a stipend of Rs. 225. - per group. Because mushroom cultivation is seasonal, they were unable to earn anything during off-seasons. Hence they were later trained in making preserved food like jam, jelly, etc. This training was given to them by experts from Jadavpur University. Of these four groups three had got grade II status and had got of Rs. 1,25,000.- credit. Sathi group was waiting to get their Grade II status. After they came under the SGSY scheme they were given the initial Rs. 25,000. - and in the year 2000 a small work shed was built for from the SGSY infrastructure fund. All the twelve groups in Nischinda G P shared this work shed.

The other six converted DWCRA groups were formed between 1996 and 1999. Four of them (Gayatri, Maitree, Arati, Bharati) were involved in mushroom cultivation with the scheme funds. These sixty women were given training in mushroom cultivation by the DRDC. They were also given the basic equipments for such work. This cultivation was done by the women individually in their homes. Though mushroom cultivation is a profit making business and has good marketing potential, it is seasonal. Hence all of these sixty women were engaged in other family enterprises like papad making, small home-based poultry, etc. The two other groups formed with the DWCRA funds (Chandrani & Indrani) were engaged in tailoring. Both were given sewing machines by the DRDC. They, too, did the tailoring work individually at home. Like the others, each of them had other gainful occupations like cooking for village festivals, weddings, etc.

The last two groups ( Jayanti & Mausami) formed under SGSY scheme itself were engaged in animal husbandry. They had set up a piggary with the rolling fund and cash credit fund from the bank.

54

We met women members from only two groups Rakhi and Sathi. The others were unable to come due to a death in the locality. Rakhi: & Sathi Both these groups had 12 members. They were given machines, and other equipments for making jam, jelly, sauce, etc. Four members of this group were involved in this work. A few others are involved in home-based work like making Papads, Baris, poultry, goatery etc. But all of them were involved in mushroom cultivation during the season. Case Studies Saraswati Pal (Sathi) She has one son and one daughter. The daughter is married. Apart from her involvement in the group she also cooks for large parties and supplied labour for caterers and masons. They have a pacca house. Their family business is making papads. Initially, her husband was very much against her joining a group. He even beat her and tried to keep her away from it. He was afraid that if she goes out he would loose control over her. He was not convinced that there would be any financial gain for the family. Now that she is bringing in some money he has stopped objecting. Most of her earnings are spend on consumption expenditure like dowry for daughter’s marriage, etc. Arati Roy: She has been in this group from 1996. Her main income comes from cooking at households. She has been cooking for the Sabhadhipati for a long time. After the groups came under the SGSY scheme in 2000, she was trained for marketing the preserves they produced. She visits the households in her village to sell their products. They have been able to get some regular clients like the members of the DRDA, etc. She has two daughters none of them arer married yet. Her husband was a rickshaw puller. But she has bought him a van with her savings. Her husband was extremely angry when she first joined the group in 1996. He had used a knife (banthi) to cut her leg. She still bears the scar. Again, now that she is bringing in money he is very happy. He even helps her in their family business of making Papads. She has studied up to class VIII. She earns around Rs. 900.- per month excluding her pay as a cook. Maya Das: She is responsible for marketing the products of the Rakhi group. She also makes bindis in spare time to augment her income. She has one son and one daughter. The son is grown up and is working. The daughter is studying in Class XI. Bina Das. Apart from her work in the food preservation unit, she is engaged in several other works to earn money. At home she also makes bindis. This is a contract job where the

55

middlemen give them the raw materials and does the marketing. But this is an extremely labour intensive and low profit work. She, like the others, cooks for a few households, does work as an ayah. Her husband is unemployment. She lives her in-laws house. On 25 January, we visited Konnagar and Sreerampur Gram Panchayat in Hoogli district where we met 4 groups. One of these groups was a men’s group. These groups were run by a NGO called Sree Sanchari. We had met a member of this NGO when we had visited the Hoogli DRDC at Chunchura on 8 November, 2002.

Kanaipur Matri Nagar This group consisted of ten members. It was located under the Kanaipur Gram

Panchayat . The main occupation of the women in this village was stitching Zari threads on Sarees. But due to lack of money many families were unable to buy sewing machines. Having received the rolling fund and the cash credit, eight of them had bought sewing machines. They did this work individually at home. This work is also done through middlemen, who supply them with the materials. The women themselves did the design. Two members from this group had opted out of this traditional work. One had bought a cow and sold milk. The other gave the money to her husband for his carpentry business.

Siv Swanirbhar Sanchay Dal:

This group, too, consisted of ten members. They also did the traditional Zari work. But unlike the previous group, this one was not dependent on the middlemen to supply them with materials. The husband of one of the members went to the market in Kolkata and bought the materials in bulk. These were stored in her house. She supplied the materials to other members of her group.

One major problem that both these groups were facing was that due to several

more women entering the same work, the middlemen were taking advantage of the situation and were cutting down the rate of payment. Whereas previously the rate for one finished work on a Saree was five rupees they had brought it sown to Rs. 3 per Saree.

To circumvent this problem, these women were given training on tailoring. Some of them had learnt to stitch baby knickers.

Annapurna Swanirbhar Swarojgar Samity This group was located at the Rajyadharpur Government Colony at village Rajyadharpur and had ten members. This group had been formed in January 2002. They traded Sarees and other garments from door to door. Two of them were responsible for buying the Sarees and other materials from the market. Their husbands helped them. The other eight members did the actual selling. They made a profit of about Rs. 20.- per Saree. They earned about Rs. 300.- per head per month They had received the rolling fund and the cash credit form the bank. This group was also taking tailoring training.

RamkrishnaPally Byabsai Samity

This group consisting of ten members, was doing something totally different from the

56

others. As soon as they received the rolling fund and the cash credit they started a provision supply business. They bought the provisions in large quantities and stored them in the house of one of the members. They did door to door supply to the villagers. This group was the only one in this area who was doing their business as a group. Their collective earning was Rs. 2,000.- per month. Two of the members were on duty from 6 p.m. to 9 p.m. to take the orders from customers. This was done on rotational basis. What they needed most was a small space to set up a shop. The member of the NGO who had accompanied us was not very encouraging. He felt that this untraditional work should not be encouraged. He wanted to push them into the traditional tailoring or Zari work

Ramkrishna Pally Unnayan Samity:

This was the only men’s group we visited. They had ten members and had set up a grocery shop. They were doing precisely the same business as the previous women’s group. But they were not facing the same problems. They had rented a large room. They had also got Grade I status and had received Rs. 25,000.- under the scheme. They had utilized the entire fund on their business. They also did door to door selling. But because they were more mobile they could go to adjoining villages to do their marketing. All the ten members had other occupations but they devoted all their spare time towards this business. In fact, unlike the women’s group they were encouraged and were promised cash-credit linkage.

On 30 January, 2003, we visited Devanandapur Gram Panchayat and Chinsura Mogra Block. We met several groups in these two areas. The Project Director at Chunchura had made arrangements for these visits. A member of a NGO accompanied us. The groups we visited in these areas were all new groups. They had just started. None of them had received any funds from the scheme yet. At Devanadapur GP we first met members of two groups. (Radhagabinda & Lakshminarayan) The meeting had been arranged in a nearby field where the women had gathered. Some of the husbands and other men from the area had gathered around us and where passing snide remarks. One of them quite openly commented all these group works were a waste of time. Women should stay at home and look after the family. Both these groups had eleven members each. They had started saving and had borrowed small amounts of money from these savings for their personal use. They were involved in three types of work, Bidi making, making newspaper packets and Bari. All these occupations are labour intensive and low-income activities. They had some idea about the funds that were available under the scheme. All of them said that, when they get more funds, they would try to increase the work they are already doing. None of them had thought of doing something else which could be less labour intensive and more paying. At Chinchura Mogra Block we met two more groups. These women were predominantly Muslim. A few, who were Hindus, had come from Bihar and settled down in that area. These groups had been formed eight months ago. They too had not received any funds under the scheme yet. All the women were involved in making newspaper packets. There

57

are small-scale industry houses around the area so there is a ready market for these packets. The women did the work at home after doing their household chores. But they realised that more and more production and over supply could bring down the price of the paper bags. They lacked guidance.

Appendix II The questions for the senior officers at the Panchayet & Rural Development Department

at Stage I

(i) Financial allocations for the last two previous years i.e. the total release of

funds, whether the entire funds available have been utilised, if not what has happened to the unutilised funds. On what date did the granted amount become available to the Department? Does the grant reach the Department in one or several instalments?

(ii) Through what agency does the grant reach the Department?

(iii) How does the department disburse the grant? What is the agency that is

responsible for disbursing the funds to the recipients? (iv) What is the time interval between the dates of the receipt at the Department of

the instalments and the release to the agency down the line? (v) What is the basis of allocation of funds for the different states?

Appendix III

List of persons met at Stage I 1. Shri Prasad Roy, IAS,

Joint Secretary, Panchayat & Rural Development Department, 1, Kiron Sankar Roy Road, Kolkata 700 001 (Since transferred as Land Reforms Commissioner-cum-Secretary, Writers’ Building, Kolkata 700 001);

58

2. Shri Amalendu Ghosh IAS,

Joint Secretary, Panchayet & Rural Development Department, 1, Kiron Sankar Roy Road, Kolkata 700 001;

3. Shri Prithinath Bose IAS, Joint Secretary, Panchayet & Rural Development Department, 2nd floor, Jessop House, 63, N.S. Bose Road, Kolkata 700 001

4. Shri T.K. Majumdar IAS Joint Secretary, Panchayet & Rural Development Department, 2nd floor, Jessop House, 63, N.S. Bose Road, Kolkata 700 001

5. Shri Bimal Kumar Sarkar, WBCS Officer on Special Duty Ex-Officio Deputy Secretary, Panchayet & Rural Development Department, 2nd floor, Jessop House, 63, N.S. Bose Road, Kolkata 700 001

6. Smt. Swasati Bannerjee, Special Officer SGSY, Panchayet & Rural Development Department, 2nd floor, Jessop House, 63, N.S. Bose Road, Kolkata 700 001

7. Shri Dilip Ghosh, ADM Howrah (since transferred)

8. Ila Chakravarty, Senior Research Officer, Panchayet & Rural Development Department,

59

2nd floor, Jessop House, 63, N.S. Bose Road, Kolkata 700 001

Appendix IV The questions for the Project Directors of the three districts visited at Stage II (Translated from Bengali) In the past two years:

1. How much money did you receive from the Central Government? When did you get it?

2. How much money did you get from the State Government? 3. We believe that you have to send a report to the Central Government after

spending 60% of the funds. When did you send such report? Do you have to send the report both to the Central and the State Government separately?

4. When did you receive the second installment of the funds from the Central and The State Governments?

5. How have you spent the money? 6. Have you been able to spend the entire money received by you? If not did you

have to return the surplus fund? 7. Are you aware of the amount you will receive in a particular year? 8. Who decides the amount of money to be allocated at a particular district? 9. If it is the Central Government, then are aware of the basis of allocation? 10. Are you consulted before the amount is allocated? 11. Do the Central & the State Government send the scheme fund and

administrative funds separately? Appendix V

List of persons met at Stage II 1. Smt. Sheila Nag,

Project Director, SGSY Zilla Parishad Haorah District

2. Shri Pabitra Das, Senior Officer,

60

Zilla Parishad Haorah District

3. Smt. Abha Manna, Group Coordinator, Nischinda Gram Panchayet Haorah District

4. Bina Das, Member, Nischinda Gram Panchayet Haorah District

5. Shri Gopinath Mukherjee, Project Director, SGSY Zilla Parishad, Chunchura, Hoogly

6. Smt. Debjani Dutta Deputy Project Direcor, Women Development Department, Zilla Parishad Chunchura Hoogly

7. Shri K. Goswami, Deputy Project Director, SGSY Zilla Parishad Chunchura Hoogly

8. Smt. Seuli Bannerjee, BDO, Devanandapur Gram Panchayat District Hoogly

9. Shri Gorachand Maity (NGO) Santoshi Mata Samity Village: Krishnanagar, P.O. Jangi Para, Hoogly

10. Shri Asim Roy (NGO) Sree Sanchari Samity Dist. Hoogly

11. Shri Pinaki Ghosh, Project Director, Medinipur Zilla Parishad, Paschim Medinipur

12. Shri Sahadul Islam, CEO, Medinipur Zilla Parishad,

61

Paschim Medinipur 13. Madhu Chattarjee,

BDO, Keshpur Block 1 Paschim Medinipur

14. Tulsi Das, Panchayet Pradhan Nandanpur Gram Panchayet Paschim Medinipur

15. Som Sankar Mondal, Karmadhakshay, Nandanpur Gram Panchayet Paschim Medinipur

16. Shri A.M. Bhattacharya, (NGO) Dakshin Chhatra Unnayan Samity Dist. 24 Parganas

Appendix-VIA Population distribution,percentage decadal growth rate, sex ratio, literacy rate, , percentage to total workers and Area For The Three Concerned District and West Bengal STATE/ DISTRICT

AREA SQ.KM

POPULATION LITERACY RATE

PERCENTAGE TOWORKERS

Cultivators Aglab

Male Female

PER

CE

NT

AG

E

DE

CA

DA

L G

RO

WT

H

RA

TE

( 19

91-0

1)

Male Female

SEX

RA

TIO

Mal

e

Fem

ale

Mal

e

West Bengal

88,752 41487694 38733477 17.84 77.58 60.22 934 20.77 13.44 22

Hoogli 3,149 2588322 2451725 15.72 83.05 67.72 947 16.41 8.69 21 Haorah 1,467 2242395 2031615 14.60 83.68 70.93 906 5.36 2.33 10 Medinipur 14,081 4929000 4709473 15.68 85.25 64.63 955 31.26 20.40 28 Source : Census of India 2001, W.B. Series-20, Provitional Population totals, Distribution of Workers & Non Worker and Broad Classification of the

62

Working population. Table B-page 25-27 14A Table-I

CENTRAL ALLOCATION FOR EACH DISTRICT IN WEST BENGAL FOR SGSY DURING 2000 – 2001 UPTO THE MONTH OF MARCH, 2001

Release

Districts Opening balance as on 01.04.2000

Opening balance as on 01.04.2001

Allocation (Central + State) 2000

Allocation (Central + State) 2001 Central 2000 Central 2001

Bankura 555.64 623.61 389.25 336.49 0 0.00 Birbhum 649.94 722.97 336.19 290.61 0 0.00 Burdwan 1079 1171.33 548.47 474.12 0 0.00 Cooch Behar 251.14 103.47 177.56 183.53 0 0.00 Dakshin Dinajpur

284.03 214.35 103.58 107.05 0 0.00

Darjeeling Ghc 187.89 215.88 125.96 108.88 0 0.00 Hoogli 665.25 724.13 318.48 275.31 0 0.0 Haorah 405.39 294.92 247.69 214.11 0 78.26 Jalpaiguri 575.57 547.21 230.02 198.84 0.0 0.0 Malda 567.02 535.92 265.40 229.43 0.0 0.0 Medinipur 1282.56 1056.0 955.42 825.88 0 0.0 Murshidabad 596.82 564.62 384.77 397.69 0 0.0 Nadia 471.19 508.22 251.55 260.01 0 0.0 North 24pgs. 701.20 777.39 389.25 336.49 0 0.0 Purulia 504.72 590.71 353.80 305.83 0 0.0 Siliguri Mp 195.58 96.94 72.21 74.64 0 0.0 South 24pgs. 888.66 904.92 513.15 443.59 0 0 Uttar Dinajpur 266.27 210.99 133.17 137.64 0 0 Total 10128.22 9863.6 5795.92 5200.2 0.0 78.26

Source: Panchayat and Rural Development Department. Jessop House. Kolkata.- 700 001 Appendix VII-Table-A 60 PERFORMANCE OF SWARNJAYANTI GRAM SWAROZGAR YOJANA DURING 2000 – 2001 UPTO THE MONTH OF MARCH, 2001

District Financial ( Rs. In lakhs )

63

R

elease

Ope

ning

bal

ance

as

on

01.0

4.20

00

Opening

balance as on 01.04.2001

Allo

catio

n (C

entra

l + S

tate

) 20

00

Allocation

(Central +

State)2001C

entra

l 20

00

Central

2001

State 2000

State 2001

Total (C+ S) 2000

Total (C+ S) 2001

Tota

l A

vaila

ble

of

fund

200

0

Available of

fund2001

Bankura 555.64 623.61 389.25

336.49

0 0.00 85.26

0.00 85.26 0.00 679.02 652

Birbhum 649.94 722.97 336.19

290.61

0 0.00 73.64

0.00 73.64 0.00 752.43 748

Burdwan 1079 1171.33

548.47

474.12

0 0.00 120.1

0.00 120.13

0.00 1247.54

1222

Cooch Behar

251.14 103.47 177.56

183.53

0 0.00 0.00 0.00 0.00 0.00 262.53 147

Dakshin Dinajpur

284.03 214.35 103.58

107.05

0 0.00 0.00 0.00 0.00 0.00 284.03 252

Darjeeling Ghc

187.89 215.88 125.96

108.88

0 0.00 27.59

0.0 27.59 0.00 230.62 232

Hoogli 665.25 724.13 318.48

275.31

0 0.0 69.75

0.0 69.75 0.0 775.23 758

Haorah 405.39 294.92 247.69

214.11

0 78.26

54.25

0.0 54.25 78.26 476.70 390

Jalpaiguri 575.57 547.21 230.02

198.84

0.0 0.0 50.38

0.0 50.38 0.0 625.95 571

Malda 567.02 535.92 265.40

229.43

0.0 0.0 58.13

0.0 58.13 0.0 643.63 582

Medinipur

1282.56

1056.0 955.42

825.88

0 0.0 0.0 0.0 0.0 0.0 1320.84

113

Murshidabad

596.82 564.62 384.77

397.69

0 0.0 0.0 0.0 0.0 0.0 682.62 585

Nadia 471.19 508.22 251.55

260.01

0 0.0 0.0 0.0 0.0 0.0 524.96 528

North 24pgs.

701.20 777.39 389.25

336.49

0 0.0 85.26

0.0 85.26 0.0 807.30 808

Purulia 504.72 590.71 353.80

305.83

0 0.0 77.49

0.0 77.49 0.0 591.89 620

Siliguri Mp

195.58 96.94 72.21 74.64 0 0.0 0.0 0.0 0.0 0.0 207.69 101

South 24pgs.

888.66 904.92 513.15

443.59

0 0 112.4

0 112.4 0 1176.57

964

Uttar Dinajpur

266.27 210.99 133.17

137.64

0 0 0 0 0 0 276.21 217

Total 10128.22

9863.6 5795.9

5200.2

0.0 78.26

814.3

0 814.28

78.26 11565.76

1058

64

Source: Panchayat and Rural Development Department. Jessop House. Kolkata.700 001 61 Appendix VII-Table-B Performance of Swarnajayanti Gram Swarozgar Yojana During 2000 –2001 Upto the Month of March ,2001

District Financial ( Rs. In lakhs ) Credit Disbursed Subsidy Disbursed To SHGS

To individual Swarozgaris

Total To SHGS

To indivitual Swarozgaris

2000 2001 2000 2001 2000 2001 2000 2001 2000 2001

1 2 3 4 5 6 7 8 9 10 11 Bankura 0.0 2.12 8.73 47.33 8.73 49.45 0.0 2.12 4.89 23.94 Birbhum 0.0 1.81 10.48 125.44 10.48 127.25 0.0 1.80 3.44 64.58 Burdwan 0.23 21.53 111.48 80.55 111.71 102.08 0.23 21.53 47.66 36.56 Cooch Behar

0.0 4.34 20.74 43.17 20.74 47.51 0.0 4.19 13.86 25.45

Dakshin Dinajpur

6.03 7.89 15.92 376.69 21.95 384.58 5.33 7.89 7.9 175.61

Darjeeling Ghc

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Hoogli 4.19 2.55 74.95 65.89 79.14 68.44 1.64 2.55 27.41 30.19 Haorah 3.61 47.78 15.37 163.99 18.98 211.77 3.61 47.01 7.15 78.64 Jalpaiguri 0.0 0.65 0.0 12.75 0.0 13.40 0.0 0.65 0.0 6.75 Malda 41.25 0.0 25.58 94.68 66.83 94.68 15.00 0.0 7.99 28.3 Medinipur 0.0 0.0 0.0 31.82 0.0 31.82 0.0 0.0 0.0 15.44 Murshidabad

9.94 17.14 74.03 45.29 83.97 62.43 9.94 12.07 29.29 25.68

Nadia 0.88 1.07 4.48 78.24 5.36 79.31 1.74 0.62 2.15 39.15 North 24pgs.

0.0 0.99 12.44 319.95 12.44 320.94 0.0 0.99 6.67 150.39

Purulia 0.0 0.0 1.93 1.12 1.93 1.12 0.0 0.0 1.18 0.76 Siliguri Mp 21.87 9.53 58.09 56.67 79.96 68.20 20.50 9.52 30.64 38.18 South 24pgs.

2.0 0.0 237.82 40.64 239.82 40.64 1.25 0.0 129.83 15.56

Uttar Dinajpur

0.0 1.74 4.62 301.02 4.62 302.76 0.0 1.74 1.38 148.83

Total 90.0 119.14 676.66 1887.24

766.66 2006.38

59.24 112.68 321.44 904.0

Source: Panchayat and Rural Development Department. Jessop House. Kolkata.-700 001 z

65