SHG bank linkage under swarnajayanti gram swarozgar yojna (SGSY) in Odisha - A case study

In April 1999, the Integrated Rural Development Programme (IRDP) was restructured and combined with Training of Rural Youth for Self-Employment (TRYSEM), Supply of Improved Tools for Rural Artisans (SITRA), Ganga Kalyan Yojana, Million Wells Scheme (MWS) and Development of Women and Children in Rural Areas (DWCRA), and a single self-employment programme known as Swarnajayanti Gram Swarojgar Yojana (SGSY) was put in place. The basic objective of SGSY is to bring the assisted poor families above poverty line by providing them income-generating assets through bank credit and government subsidy. Formation of organizations of the poor at the grassroots level through a process of social mobilization for poverty reduction is central to the programme. The community involvement as emphasized in SGSY, in contrast to IRDP, is reflected in the mobilization for the formation of SHG groups. SGSY has been conceived as a holistic self-governing programme covering all aspects of selfemployment of the rural poor such as organization of the poor into SHGs, their capacity building, selection of key activities, planning of activity clusters, infrastructure build-up, technology and market support . The main tenets of the SGSY are: (a) key activities, (b) cluster approach, and (c) group method. The first reduces the number of 3 activities; the second shrinks the geographical spread to fewer contiguous or selected villages; and the third reduces the number of clients from a large number of individuals to a small number of groups and enables peer group monitoring associated with self-governing institutions. All these are expected to reduce the burden of follow-up and the extension inputs for providing backward and forward linkages. The programme aims at establishing a large number of micro enterprises by the poor in rural areas by augmenting the ability of the poor in a manner appropriate to the potential of each area. Financial assistance under SGSY is given in the form of subsidy by government and credit by the banks.