The delivery of benefits has improved, but resource efficiency is still a long way off
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Gram panchayats are the focal points for development activities. On this count, a concerted campaign—Sabki Yojana Sabka Vikas—has laid the foundation for robust community participation involving panchayats and Self Help Groups (SHGs). Poverty has reduced significantly because of the focus on delivering the benefits of government schemes such as the Ujjwala Yojana, the PM Awas Yojana and the Deendayal Antyodaya Yojana-National Rural Livelihood Mission (NRLM). Groups that were often left out of such programmes have been included and gram sabha validations have been conducted to ensure services reach disadvantaged groups.
COVER STORY | The challenges ahead
The Panchayati Raj Institution (PRI)-SHG partnership has increased the pace of poverty reduction and the use of Aadhaar to validate the delivery of benefits has significantly reduced corruption. Further, Finance Commission transfers made directly to gram panchayats have led to the creation of basic infrastructure at a much faster pace in rural areas.
In 2020, researchers from the International Initiative for Impact Evaluation examined the impact of the NRLM in nine of India’s poorest states. They found that an additional 2.5 years of membership in SHGs was linked to a 19 per cent increase in total household income. At the same time, only 19 per cent of SHG loans were used for productive purposes like supplementing livelihoods and only 65 SHGs had initiated some form of entrepreneurial activity. Most SHGs remain confined to being microfinance units rather than becoming business entities. This challenge persists with the NRLM. The report indicated that the success of the NRLM depends on improving the ability of members to diversify into highly productive activities. At the same time, there is no serious effort to converge resources under various programmes to reduce administrative overheads.
